KUALA LUMPUR (Sept 20): The Association of Banks in Malaysia (ABM) and The Association of Islamic Banking Institutions Malaysia (AIBIM) want to assure homebuyers that their member banks in Malaysia will continue to provide home financing facilities to eligible customers.

Based on a recent survey by ABM and AIBIM, the top reasons banking institutions decline home financing applications are due to the applicant having a high debt service ratio, an adverse credit history, insufficient income, or weak documentation/banking records to support the application.

Generally, an evaluation of any application for financing would be based on how an applicant matches up to a set of criteria encompassing these five broad areas (or the 5Cs of credit as they are often referred to) namely, character, capacity, collateral, conditions and capital.

“Buying a home is a major financial purchase and a home financing facility usually forms the highest value item of a customer’s debt portfolio. Thus, it is crucial that banking institutions establish that a customer has the financial capability to make repayments/payments during the financing tenure,” said ABM and AIBIM in a joint statement today.

The associations also urged homebuyers to work with their financiers when making suitability and affordability assessments for any facility applied for as this could pave the way for more robust financial management on the part of the customer.

“There are various types of home financing offered by commercial banks and Islamic banking institutions targeted at specific segments of buyers. For example, first-time homebuyers may want to consider applying for Government schemes such as “Skim Rumah Pertamaku” for assistance in their property purchase. Some other financing options that homebuyers should consider are “MyDeposit” or also known as the First Home Deposit Funding Scheme, PR1MA HOPE Home Assistance Programme and Rent to Own Programme under PR1MA, to name a few,” it said.

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