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Loan applicants fail to meet eligibility criteria

June 16th, 2012 · No Comments


BANK Negara Malaysia said a little less than half of the applicants for My First Home Scheme were not successful in acquiring loans under the scheme as they were unable to comply with the eligibility criteria.

These applicants amounted to 505, or 47.5 per cent, of the total applications of 1,062 as at the end of January, said the central bank in a statement yesterday.

The participating banks garnered a total of 1,624 applications as of January, but 562 were afterward withdrawn owing to multiple applications to different banking institutions.

Bank Negara said from a total of 1,062 actual applications, 389 (36.6 per cent) of which have been given the thumb-up sign  by banking institutions, and of which 280 have obtained guarantee from Cagamas Bhd, the  national mortgage corporation, while 168 (15.8 per cent) are presently being processed by banking institutions, said Bank Negara.

My Frist Home Scheme, started in March 2011, aspire to permit young working adults to get hold of 100 per cent financing from banking institutions to buy their first Malaysia property home valued at a maximum of RM220, 000 (for single applicants) or a maximum of RM400,000 (for joint applicants of husband and wife with household income below RM6,000 per month cumulatively).

Applications are made to participating banking institutions and upon approval Cagamas will give a guarantee for the first 10 per cent of the loan.

The statement was released subsequent to news reports yesterday asserting that the success of the scheme had been hindered by the reluctance of banks to danger giving loans with monthly repayments that come up to more than half of the applicants’ salary.

In fact, a Chinese daily even reported on March 5 that not a single loan under the scheme has been approved.

Bank Negara said that to be eligible, applicants should have the capacity to meet their debt obligations, give the proof of a sustainable income stream, good credit history and able to meet the basic eligibility criteria of the scheme.

“The intention is to ensure that young borrowers are not over burdened by debt obligations that may lead to bankruptcies or foreclosures,” said the central bank.


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