KUALA LUMPUR — March 3, 2016: Bank Negara Malaysia (BNM), state governments and the banking industry are working together to align the criteria used in approving house financing and to improve affordability of applicants.
In a statement today, BNM said the assessment by banks on borrowers is partly to assist them in ensuring they had the capacity to service the loans throughout the tenureship.
This is to ensure that borrowers could continue to service their obligations and have sufficient financial buffers for living expenses.
It is also to ensure that the borrowers are able to protect themselves against rising costs and unexpected adverse events, including foreclosure of homes.
“The maximum housing loan tenure of 35 years is more than sufficient for borrowers to settle their housing loans by their retirement age,” it said.
According to the central bank, the financing assessment takes into account an applicant’s income after statutory deductions, expenditure on necessities and all debt obligations from banks and non-bank lenders.
“Those who do not have the capacity to own a house may also consider the option to rent,” it said.
BNM further stated that the Credit Counselling and Debt Management Agency has been providing advice to applicants to rationalise their debt levels and educate them on prudent financial management.
The statement reminded that it is important for borrowers to disclose accurate material information with regard to their financial position when applying for house financing to ensure objective assessment by the financial institutions. — Bernama