Key Factors when Applying for a Housing Loan

July 20, 2016
Kuala Lumpur, Wednesday, 20 July 2016:- The Association of Banks in Malaysia wishes to clarify recent reports on the alleged stringent lending policy which is purportedly affecting first-time house buyers. Commercial banks have been offering housing loans to applicants who are eligible. In screening housing loan applications, banks consider many different factors. The business of commercial banks is in the main lending or extending credit while adhering to their respective risk appetites and/or the guidelines set by the regulators. Consumers who are eligible will continue to be able to obtain financing.

To improve one’s standing of obtaining a housing loan, potential home buyers should pay close attention to the following factors:

  • having a good credit record by keeping all payments up to date on existing credit facilities/ liabilities.
  • the ability to prove financial capability to make monthly payments.
  • fully and accurately disclosing all material information with regard to their financial position when applying for a home loan.
  • shopping around for a financial institution. Each financial institution may offer different financing packages, so it is important to get loan estimates from multiple lenders before making a decision to make a purchase. Apart from commercial banks, certain Islamic banking institutions also offer home loans.
  • knowing just how much one can borrow to purchase a property by checking with the bank. The borrower may also want to consider getting pre-approved for a housing loan before looking at purchasing a property. In assessing your eligibility for a housing loan, monthly home loan instalments, and other long term monetary commitments such as hire purchase loans should not exceed more than 40% of gross monthly income.
Housing loan applicants should work with their financiers when making the suitability and affordability assessments for any facility applied for to pave the way for more robust financial management on the part of consumers. Our member banks are committed to playing their role in this process.

First time home buyers may want to consider applying for Government schemes such as “Skim Rumah Pertamaku(SRP) ” for assistance in their property purchase. Eleven commercial banks and eleven Islamic financial institutions in Malaysia are participating in the SRP, the full list of which can be obtained on SRP’s website ->

Members of the public who may have enquiries or complaints related to housing loan matters are welcomed to contact us at our ABMConnect hotline by dialing 1-300-88-9980, or emailing us at eABMConnect by logging on to our website,
ABMConnect | Toll-free on 1300-88-9980

ABMConnect provides an avenue for consumers to clarify any doubts and verify information on conventional banking issues.