Loan Evaluation by End-Financiers

Listed below is a set of criteria that governs the end-financiers’ evaluation of housing loan applications.

(a) Income

The applicant must have sufficient income to qualify for the loan. The normal requirement is that the monthly loan repayment should not exceed 1/3 of the applicant’s monthly income or in the case of the join purchasers, their joint monthly income.

Example: For a RM 200,000.00 loan over a period of 20 years, the monthly loan payment (at 10% per annum x monthly interest) is RM 1,958.00. Thus, the applicant must have a minimum monthly income of RM 5,874.00 (RM1 958.00 x 3).

You are required to supply evidence of your income, such as pay slip or income-tax return form to enable the end-financiers to ascertain your ability to repay the loan. However, if you are self-employed, you should produce sales invoices, receipts or other documentary evidence to verify  your income claim.

(b) Age

The usual age limit for the loan repayment is 55, which coincides with the normal retirement age. Some end-financiers might extend the age limit to 60.

i) Guarantor You may be required to provide a guarantor or guarantors whose joint income should meet the above mentioned minimum requirement.

ii) Evidence of additional income You may have a substantial amount in you savings or fixed deposit account which can be used as evidence of additional income which the end-financiers may take into account during evaluation.