Applying for a home loan from a bank is a process that almost everyone who buys real estate goes through. But it is precise because I am not familiar with this process that I did not make sufficient preparations in advance, which eventually led to my dream of buying a house shattered. If you are planning to apply for a loan, or the loan application has been rejected by the bank, you can refer to the information provided by 3 senior bank loan officers in this article to improve your future home loan application success rate.
It can be seen that in recent years, it has become increasingly difficult to apply for a housing loan to buy a house. This may be due to the unsatisfactory domestic economic conditions, the high cost of living for the Chinese people, and the lack of available funds. Coupled with the raging COVID-19 epidemic, banks have become more cautious in lending.
But for those who want to apply for a loan, what can they do to get a loan under such circumstances?
We especially consulted senior loan officers of several domestic banks to discuss some common reasons and solutions for rejected housing loan applications, so that you who want to take out a loan to buy a house can avoid making the same mistakes as before.
Home loan applicants do not understand the application process for bank loans – Surendran, 40, Putrajaya, Putrajaya”Malaysia is very different from other countries when it comes to the home loan application process.
In Malaysia, many people go to the bank to apply for a home loan without thinking about it after seeing a suitable house they want to buy among a large number of real estate projects.
A problem with this process is that the selling price of the house may be too far from the bank’s valuation.
In addition, if real estate buyers do not fully understand their financial situation, such as their ability to buy a house, they are likely to choose a house that is beyond their budget.
The most common reason for this is that homebuyers do not have a clear idea of their ability to repay.
The first thing we (bank loan officers) will do when reviewing a mortgage application is to check the credit information of the Central Credit Information System Record (CCRIS) to understand the Debt Service Ratio (DSR ) of the mortgage applicant. ).
PropertyGuru Tip
The Debt Service Ratio DSR is a measure of income and debt burden levels that banks use to assess and decide whether a borrower is in good shape to repay their loan. Generally speaking, the debt service ratio of the borrower cannot exceed 70%, otherwise, the bank loan he applies for will usually be rejected!
If you want to improve your home loan approval success rate, I want to stress that it is very important that you know and understand your DSR in advance.
PropertyGuru provides a free online tool that can accurately calculate your DSR, and the system is linked to your latest credit information (such as CCRIS, CTOS, etc.), and to be honest, it made my loan review Work is much more convenient and easier.
In addition to this, I have also encountered cases where some home loan applicants have falsified financial documents. I advise everyone not to do this, because not only will your mortgage application be rejected, but you may also be arrested and prosecuted by the police! This kind of falsification of fake documents is highly undesirable.
Another reason a borrower’s home loan application is rejected is the inability to show proof of income. Therefore, I would like to take this opportunity to stress that some income proof documents need to be prepared before applying for a loan.
These documents include your savings account statement and income tax return, your salary entry, and EPF payment records that the bank can check. If you want to successfully get a mortgage to buy a house, you need to show these documents to prove your income.
Also, remember to make sure that the basic information fields in the mortgage application form are filled in correctly, such as your current home address and contact information. It’s pretty stupid if your home loan application gets rejected for this reason! ”
2 ) Bank loan applicants not doing enough homework – Adrian, 36, Subang Jaya, Subang Jaya
“In my opinion, the most common mistake most of my clients make when applying for a loan is not doing their homework before deciding to buy a property.
Some home developers or sellers may have already been declared bankrupt when they sell their homes. Under Malaysian law, if the seller has declared bankruptcy or is facing legal action from CTOS Credit Information Services, any property in their name is not allowed to be transferred.
In addition, some housing developers may have been blacklisted by banks and even the Ministry of Housing and Local Government!
At the same time, the bank also has its real estate blacklist. These houses are blacklisted by banks, usually because of their location and title status.
For example, if a property has not received a strata title after several years, it may be listed by the bank.
In addition, if a leasehold property has a remaining lease term of only 30 to 60 years, then this property will also be particularly noticed by the bank.
Some banks have a lending policy that will not provide a loan for the sale or purchase of a leasehold house if the remaining lease term of the house is only 30 to 60 years or less.
This type of real estate is a high-risk financing object for banks, as the bank believes that the value of the property is likely to decline at the end of the lease term of these properties.
That’s why I always advise my clients to use a trusted real estate website like PropertyGuru when looking for their dream home. ”
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3 ) Loan application may fail due to mistakes by bank staff – Sue Ling, 37, Cheras
“Well, that’s a shameful thing…but I do see some bank clerks get their home loan applications rejected because of their own mistakes. This is especially common for new entrants. bank clerk.
If bank staff are inexperienced in this area and are not familiar enough with the rigorous process of processing home loan applications and their home loan products, it may lead to the borrower’s application being rejected by the bank with flaws.
This is most likely because the banker in question is a novice and is not yet fully familiar with the specific regulations and operations of the bank. As a result, they may not have collected enough documentation from customers to meet the bank’s requirements for reviewing mortgage applications.
Unfortunately, human error happens in any industry. To prevent this from happening to you, it is best to evaluate your home loan application success rate before going to the bank to apply for a home loan.
I promise you, doing this will not only make our banker a lot easier, but it will also make your home buying process a lot smoother! ”