Property Hunter Magazine October Issue 2014 | Page 68

/// Contributor Different banks have different approval criteria and risk tolerance. You might not fit in that bank but it does not mean other banks will not lend to you. Don’t panic when your loan is rejected. Find out the reason behind the rejection and learn about other banks approval criteria and submit to the bank that you have the higher chance of approval. Michael Yeoh The Mortgage Expert With over 15 years of experience in the mortgage and investment industry and working with prominent companies such as Standard Chartered Bank, Hong Leong Bank, HSBC and Hwang DBS Unit Trust, Michael has helped thousands of loan borrowers by providing comprehensive mortgage advisory and solutions. Income Criteria Not Met Well, this is the most classic where most loans are rejected because of this reason. Look at this fact. If a loan borrower makes a net income of RM3,000 and the monthly loan repayment is RM2,500 . Let’s say you are the lender ask yourself will you lend to this borrower. This does not even include the daily expenses. I guess you will say a big “No”. How is this guy going to afford to pay back the monthly installment? This is how a bank determines credit approval based on the borrowers repayment capability. Michael regularly conducts mortgage courses and has produced many graduates. He is also a regular columnist and also has being featured in New Straits Times Press, The Star, Property Guru and also Property Hunter magazine. He speaks regularly in Property Exhibitions, Seminars and also for developers. You can get in touch with him at Website: www.michaelyeoh.com.my Top 10 Reasons Why Banks Can Reject Your Loan B anks can have thousands of reason to reject a home loan application. In some situation it can be unique to the loan applicant only. In some cases, the loan applicant is not even at fault. For those of you who have not submitted your loan application, if you learn why a bank can reject a loan you will be able to avoid these mistakes when you submit your loan application. This is why I have picked the top 10 reasons why a bank can reject your loan from my 18 over years of experience in the mortgage industry. Developer Or Seller Is Declared Bankrupt Banks will check whether your seller is a bankrupt or under legal proceeding using a system called Credit Tip Off System (CTOS). If a seller is bankrupt, it can be either an individual or even a company under the Malaysian Law a property sale cannot be transacted. While the author makes reasonable efforts to present information which he believes to be reliable, the author makes no representation that the information or opinions contained in this article is accurate and complete. Readers are advised to seek specific professional advice before acting on the views. 68 www.PropertyHunter.com.my Developer Is In The Bank’s Negative List Every bank will have their own negative list of developers. It will vary from bank to bank. Banks will have their own specific reason why they blacklist a developer. Some reasons includes the developer is bankrupt, being sued in court or have previous bad experience when the bank finance the developer’s last project. Existing Loan Repayment Is Not Prompt Whenever a bank process a loan, it will check a system called Central Credit Reference Information System (CCRIS). CCRIS, which is managed by Bank Negara will reflect the borrower’s loan repayment record for the last 12 months. The report will include any home or commercial loan, car loan, credit card and personal loan. If the loan repayment record shows irregular repayments then there will a very high chance the loan will be rejected. I always encourage a loan borrower to go to Bank Negara to print the CCRIS report before submitting the f