'Disclose Accurate Information'
KUALA LUMPUR: Bank Negara said it has been engaging with various state authorities on the issue of financing for affordable homes.
In a statement yesterday, Bank Negara said together with the state governments and banking industry they are working to align the criteria used in approving house financing and improve the affordability of the applicants.
“It is important for borrowers to disclose accurate material information with regard to their financial position (including their credit history) when applying for house financing to ensure objective assessment by the financial institutions,” the central bank said.
It added the Credit Counselling and Debt Management Agency had also been providing advice to the applicants to rationalise their debt levels and educating them on prudent financial management.
Bank Negara explained that the assessment by banks on borrowers is to ensure that borrowers have the capacity to service the loan throughout tenure.
The assessment takes into account the applicant’s income after statutory deductions, expenditure on necessities and all debt obligations from banks and non-bank lenders.
“This is to ensure that these borrowers can continue to service their obligations and have sufficient financial buffers for living expenses and are able to protect themselves against rising costs and unexpected adverse events, including foreclosure of homes,” it said.
“The public who do not have the capacity to own a house might also consider the option to rent,” Bank Negara said.
It emphasised the maximum housing loan tenure of 35 years was more than sufficient for borrowers to settle their housing loan by their retirement age.
“Furthermore, additional increase in the tenure will further add to the cost of financing without significant improvements in the affordability of one’s monthly instalments,” it added.
Bank Negara pointed out borrowers can also compare housing loans packages offered by various financial institutions for the best price.
Some banks have also introduced housing loan products such as first home scheme for specific target markets including young married couples, youth and the low income.