Many newspapers and magazines have reported that getting a loan is getting more difficult today.Well, it is very true. Every 10 cases submitted to the banks, more that 5 got rejected. Many first home buyers especially in affordable category are facing rejections after rejections. There are many reasons why their loan can be rejected. Some the rejections in not due to the borrowers fault . I have gathered the information below through my years of processing mortgage cases. It’s time to share with everyone.

Let’s blame the banks…..

1. Some banks have their own policy where there is a minimum loan amount. Some is RM100k, some 150k.If the borrower’s loan fall below the amount, the bank will not process the loan.
2. Borrowers did not meet the minimum salary criteria although they are good credit customers.
3. No CCRIS record at all. Many banks will request a co-borrower to join in. I recommend the borrower to have at least a credit card. To the banks, if you do not have any record I don not know who you are,
4. Some bankers or bank branch do not want to process small loan especially less than RM50k. Why…The amount of work for a small loan and a big loan is the same. Most bankers have a target of RM1 million to RM 2 million every month. Just for your information when I started in Standard Chartered in 1997 my target is RM4.5 million. We are not paid commission.
5. Banks officer experience in processing the loan.

In addition, the interest rate might also be different. The higher the loan amount, the lower the interest rate.

Do not forget, the borrowers also to be blame for the rejections…

1. Do you expect the banks to approve if the debts are high. Credit Cards are one of the main culprits.
2. Salary did not met the banks’ minimum criteria. In other words, their Debt Service Ratio is high.
3. Submitted to many or to few documents.
4. Doing risky jobs or the business is not in the choice of financing.

In order to make sure your loan is approve, start doing your mortgage planning now.

From the Desk of

Miichael Yeoh

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