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The possible problems of getting a mortgage and how to tackle them

Posted on Sep 16, 2017

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By Siti Nurhidayah Sarudin hidayah@mystar.com.my

It's a dream for every individual to have their own home or land. However, this dream is often undermined by the increase in house prices and the uncertain economic situation, which is further exacerbated by the problem of high loan rejection rate.   

Here are some factors that could hinder your loan approval:

  1. You are a self-employed worker

Self-employed borrowers often face problems on this matter as they do not have a payroll statement that proves the ability to repay the loan at the designated time.

To solve this issue, a self-employed worker should always keep a consistent financial record that adheres to the accounting standards, as well as make a regular contribution to the EPF to convince the bank of your loan repayment ability.

  1. An inexperienced officer

The bank officer who manages the application is also the key that determines your loan approval.  

It is essential for the loan applicants to selecting bankers that understand the process and requirement to handle their affairs. It is hard for someone to get a loan if they deal with loan officers who are not well versed with the loan application process.

  1. The borrower's credit history

The credit reports have a variety of relevant information, including the borrower’s credit history and the debts under the borrower's name. The bank will carefully examine the borrower's credit history to ensure that borrowers have the discipline to repay the loan regularly.

It is, therefore, necessary for a loan applicant to make sure that they have a good credit score and a consistent payment history. A bad credit record will cause the failure of a borrower to get a loan approval.

  1. The restrictions on eligible income

The bank will set a minimum amount of revenue for a qualified borrower to get a loan, as the lender does not want to take the risk of the borrower not being able to repay the loan.

One would need at least three to six months of working experience to make his or her first loan application. One way to overcome this problem is to get a surety. However, you should let the guarantor know your ability to repay the loan as the guarantor will be liable if you fail to pay the loan. The guarantor must have a strong employment background and a sound financial record. The qualification of the guarantor will be assessed like a loan applicant.

In conclusion, it is critical to have a sound financial management to get your loan approved.


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