Malaysian Bank Loan Executives Share Why They Rejected More Than Half of Home Loan Applications

Home is where the heart is, so they say. Well, if we were to take that literally, almost half of Malaysians are bound to be heartless seeing how the home loan rejection rates in our country were almost 60% last year according to BNM!

Considering how bleak of an outlook this statistic portrays, we’ve decided to investigate and find the reasons as to why so many Malaysians’ home loan applications were rejected by banks. So, we got in touch with a few local bank loan executives and here’s what they have to say.

1. Issues from the applicant’s side

Source: apuy-puye

“The value the seller is asking may not be the same as what the bank is valuing it for…”

“The home loan process in Malaysia is actually quite weird compared to other countries as most just find a house in some random listing and directly go to the bank and apply for a loan.

This is really troublesome as the value the seller is asking may not be the same as what the bank is valuing it for. Furthermore, without knowledge of what you can and cannot afford, the listing could well be beyond your means based on your income criteria.

The most common reason, however, has got to be non-prompt loan repayment. We will always go through the Central Credit Reference Information System (CCRIS) to find out their Debt Service Ratio (DSR). DSR is a formula where banks evaluate and decide whether someone can feasibly repay the loan they intend to borrow. The general rule of thumb is that it shouldn’t be more than 70% or it’ll confirm be rejected.

So, knowing your DSR score is really important and I’ve heard PropertyGuru is providing an online tool that calculates your DSR accurately as it is linked to your latest credit information, which honestly really makes my work so much easier.”

Source: Freepik

“Besides that, I have also come across instances of clients falsifying their financial documents which not only means their application would be rejected but also lead to a police case!

Not having proof of your income is also a big reason; so I would take this opportunity to highlight that documents such as your savings account and income text declaration where your salary is credited as well as EPF contributions are really important if you want your loan to be approved.

Lastly, please make sure simple things in the application form are filled correctly such as your current address and contact number. This has got to be the silliest thing to get your home loan rejected for.”

• Surendran,38, Putrajaya.

2. Issues with the property or developer

Source: Malay Mail

“The developer may be on a bank’s blacklist…”

“The most common mistake I see most of my clients make is that they didn’t check the background of the developer or seller of the property first.

Firstly, the developer or seller could be bankrupt. As per Malaysian law, any transactions of properties are not permissible if the seller is declared bankrupt or under legal proceedings from Credit Tip-Off Service (CTOS).

Secondly, the developer may also be on a bank’s blacklist. Every bank has its own blacklist of developers with each having their own mechanism in blacklisting a developer such as if they had a past history of being sued in court and so on.

Besides a blacklist of developers, banks also have a blacklist of properties which usually relates to the property’s location and status. For example, if the property in question has not received its strata title after a set number of years, it may be flagged by the bank.

Thirdly, the leasehold of the property could be less than the 30 to 60 years tenure. You should know that according to specific banks, properties with a remaining lease period of between 30 and 60 years or less will never be financed. This is because banks view this type of properties as high-risk financing, meaning the property value will drop towards the end of the lease.

That’s why I always advise my clients to use a trustworthy and credible properties listing site when looking for a house, such as PropertyGuru.”

• Adrian, 34, Subang Jaya.

Source: Deenamik

3. Issues caused by human errors 

Source: The balance

“There are human errors in any profession…”

“Well, it is quite embarrassing to admit but I have personally seen instances where the application was actually screwed up by the executives themselves especially if they are newbies. If they lack experience and are not accustomed to the processing and recommendation of a loan for approval, there is a very high chance the application will have a flaw in it and be rejected.

Sometimes because they are new to that specific bank, the documents collected from may not be enough to support the approval. Regrettably, there is always human error in any profession and to minimise the chances of it happening to you, it’s best to have your home loan Pre-Approved before even going to the bank.

In fact, doing this would really help us out immensely.”

• Sue Ling, 35, Cheras.

Source: vibrantgrowcaps

Okay, so how do we rectify all these hurdles and make sure that you can finally own your home? Well, PropertyGuru has made it their mission to do just that and with the introduction of their revolutionary Home Loan Pre-Approval tool, which makes everything just so much easier!

The first of its kind, PropertyGuru’s Home Loan Pre-Approval helps Malaysians to avoid loan rejections and be 99.9% sure of home loan approval!

By using Home Loan Pre-Approval, you can:

Avoid loan rejection 

When you’re 100% sure that you’ve found the right home, be at least 99.9% certain that your home loan will be approved.

Enjoy preferential bank rates

Only with PropertyGuru, you can save more with better interest rates on your home loan.

Get Pre-Approved under 5 minutes 

It’s super easy and fast! Plus, it’s free and very secure.

This video shows actual homebuyers sharing how they managed to overcome loan rejection and got their home loans approved. Super easy right? Here’s how you can get Pre-Approved in just 3 easy steps:

1. First, fill in your basic details

2. Next, fill in your monthly income by entering your basic, fixed and monthly income deduction.

Not too sure about them? Just click the “i” after each category and PropertyGuru will clarify what you should be filling in that tab.

3. Finally, upload a photo of your MyKad for verification by following the mentioned do’s and don’ts.

Tadaa! You’ll get your eligibility result with the price range of the home loans that you’re eligible for as well your DSR score! What’s more, you can straight away find homes within your financial range through PropertyGuru’s trusted properties listing.

In fact, you can even see the breakdown of your DSR score including your current monthly commitment when you expand your result at the bottom.

As you can see, WORLD OF BUZZ only has an RM89 monthly commitment, hence our credit score is super awesome at just 2%.

Ground-breaking right? PropertyGuru’s Home Loan Pre-Approval is the only way to secure your home loan. Get Pre-Approved here.