Approval rate for housing loans at 73.8 pct last year — ABM

KUALA LUMPUR: The approval rate for housing loans by Malaysian banks stood at 73.8 per cent last year, the Association of Banks in Malaysia (ABM) said.

It said the rate took into account housing loans approved by banks and accepted by the borrowers, as well as those approved, but subsequently cancelled.

“Banks also generally do not include applications with incomplete documents when calculating the approval/rejection rate,” it said in a statement yesterday.

The statement was released to clarify recent comments regarding the different statistics on housing loan rejection rates as reported by banks and developers, which is expected, due to differing statistical approaches used by each industry.

The ABM said a borrower would have a higher chance of success with a loan application by knowing the eligibility based on existing income, expenses and other loan repayment commitments.

It said applicants are also advised to ensure that they are not over-leveraged and have the ability to prove financial capability to make monthly repayments.

“As a general rule, the monthly home loan instalments and other debt commitments such as hire purchase financing should not exceed 40 per cent of the gross income,” it added.

Other factors that contribute to a higher chance of success are having a good credit record, as well as fully and accurately disclosing all material information, with regard to an applicant’s financial position when applying for a home loan.

The ABM said while a wide range of home loan products are available in the market, it is crucial for customers, when choosing home loan products, to identify the loan features important to them. — Bernama