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A comprehensive guide for Malaysians navigating the process of mortgage loan application.
Applicants are advised to gather all required documentation and understand the approval and evaluation process.
Choose the best mortgage loan that best suits your needs.
The journey to homeownership often begins with navigating the complexities of obtaining a successful mortgage loan application.
It can be daunting, but with the right know-how, you can increase your chances of an approved mortgage loans application.
This guide will expound on the key steps to secure the mortgage you need to turn your dream home into a reality.
Applying for A Mortgage
1. Determine Your Financial Readiness
Before embarking on the mortgage loan application process, it’s crucial to assess your financial readiness.
Banks will scrutinize your income, credit history, and existing debts to determine your ability to make timely payments for your mortgage loan application.
Thus, it is important to calculate your debt-to-income ratio and ensure it falls within acceptable limits.
Additionally, review your credit report for any errors or discrepancies that could impact your creditworthiness.
2. Gather Required Documentation
Banks require a range of documents to evaluate your mortgage loan application.
Therefore, prepare copies of your identity card, income tax returns, pay slips, bank statements, and any other relevant financial records.
If you’re purchasing a property from a developer, obtain a copy of the booking fee receipt. For subsale properties, secure a deposit receipt from the seller’s lawyer.
3. Choose the Right Mortgage Product
Malaysia’s lending landscape offers a diverse array of mortgage products, each with its own features and suitability.
Familiarise yourself with options such as
Term loans
Fixed-rate loans
Islamic financing
Flexi loans
Furthermore, consider factors like interest rate stability, repayment flexibility, and early settlement conditions to determine the best mortage type that best suits you.
4. Understand the Approval Process
Once you’ve submitted your mortgage loan application, be prepared for the evaluation process. This may include a property valuation to assess its worth and determine the appropriate loan amount for you.
Banks may also request additional documentation or clarification regarding your financial situation. A swift response to any queries can significantly hasten the approval timeline for your mortgage loan application.
5. Review and Understand the Loan Agreement
Upon approval, carefully review the loan agreement provided by your bank.
In addition, pay close attention to the terms and conditions and any fees or penalties associated with early settlement or refinancing for your mortgage loan application.
Also, seek professional advice if you require clarification on specific clauses.
Why Was Your Bank Loan Application Rejected in Malaysia?
Applying for a bank loan in Malaysia can be challenging, and several factors might lead to rejection:
1. Credit Issues
CTOS score below 550: Banks consider this a high-risk indicator.
Late payments: More than two months overdue within the last six months.
Special Attention Account (SAA): Flagged accounts.
Trade references: Exceeding RM1,000.
Legal issues: Including bankruptcy.
2. Income Factors
Recent employment: Less than six months at your current job.
Income in cash: Unverifiable income.
No EPF contributions: Employment without EPF contributions.
Contract or freelance work: Considered unstable income.
3. High Debt-to-Service Ratio (DSR)
DSR over 70%: Monthly instalments exceeding 70% of net income make approval unlikely.
In situations like these, bankers cannot assist clients in securing a loan. Applying to these circumstances would not only waste time but could also worsen your financial record.
If rejected, you must wait six months before reapplying to the same bank, and each application can lower your CTOS score by 30 to 50 points.
Moreover, a CTOS score below 550 leads to immediate rejection by some banks.
Citywide Advisory’ Loan and Consultancy Services
Citywide Advisory is a trusted bank loan and debt consolidation agency in Malaysia, offering an array of financial solutions, including:
Personal loan services
SME loan services
Mortgage loan services (to purchase a new home, refinancing and cashback purposes)
Collateral loan services
We also provide tailored loan advice customised to your individual circumstances, considering a variety of factors like:
Required loan amount.
Urgency of the need.
Property ownership duration.
Income level.
CTOS score, including credit score and history.
Personalised Loan Consultancy Services in Malaysia
Citywide Advisory is the BEST loan advisory service in Malaysia.
Citywide Advisory also offers personalized loan consultancy services, helping clients understand and improve their rejected loan applications for refinancing housing loans and more.
We customise our loan recommendations based on an individual’s needs, considering factors like:
The specific loan amount you require.
The urgency with which the loan amount is needed.
Whether you or your parents own a property that has been held for over ten years.
Your income level.
Your CTOS score (such as your credit score and credit history).
Our goal is simple: to help you find the right loan solution, paving the way to financial stability and debt freedom.
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