We have been receiving a lot of feedback from the public saying that it’s getting tougher and tougher to secure a mortgage loan due to the stricter rules imposed by Bank Negara Malaysia (BNM) and financial institutions. Indeed, it is. However, there are various ways and efforts one could make in order to increase the approval chance.
Debt Service Ratio (DSR)
One has to understand that different banks have different guidelines, rules and regulations to follow. Applicant is advised not to exceed the Debt Service Ratio (DSR) of 60-75%; which is not having a total commitment of 60-75% over his net income. However, there are some banks which could offer a higher DSR, or perhaps a lower one depending on one’s salary range and profession. However, 60-75% should serve well as a general guideline. If you are slightly above the DSR percentage and approved for a lower loan margin, you can try to appeal with the particular bank by providing more supporting documents such as fixed deposit savings, investment fund, assets etc. to strengthen your profile so that the bank could approve you for a higher loan margin.
Debt Service Ratio (DSR) = Total Commitment / Net Income
The next thing you must do is to make sure that you have a “clean” CCRIS record. What is CCRIS? CCRIS stands for Central Credit Reference Information System which provides credit information about a potential borrower. It reflects your past financial behavior and record as well as your credibility in repaying and servicing your instalment. We would advise that all PTPTN borrowers to pay your PTPTN loan installment on time to avoid being blacklisted and then get you disapproved for whatever loan that you are going to apply in the future. For those who are eligible for the PTPTN loan waiver (conversion to scholarship), we would suggest you to have a proper written notice or document stating that you have successfully converted your loan into scholarship and make sure that you are not listed in the attention list for whatever reasons. For those who are already in the bad record already, you can approach PTPTN to settle the amount that you had not done in the past. We have purchaser who was able to get his “bad record” lifted immediately once he had successfully cleared off his outstanding payment.
Career or Profession Profile
Do you know that every bank has its "preferred customer" when it comes to mortgage loan? What does this mean? For example, when Johnson submits to Bank A and Bank B, Bank A has approved his application but not Bank B. This is because Johnson is the so called "preferred customer" to Bank A. We do not recommend you to submit to all banks because this not only brings you more work and headache but may also make things worse. When you submit to too many banks, and you do not meet their guidelines and requirements, you are getting yourself in trouble. For instance, once Bank A, Bank B and Bank C rejected your application, when you submit to Bank D, Bank D will have access to the application status of other banks which you had submitted. By right, you might have a chance of approval if you have firstly submitted straight to Bank D (if you know the game plan and guidelines), but due to the rejection of three other banks, Bank D might think twice and unlikely to provide you the loan facility because Bank D might not be confident in you now as the other three banks also rejected you somehow.
Thus, for each and every profession, different banks would have different guidelines to follow. For example, Bank A would prefer fixed salary employee over a businessman applicant than Bank B, and vice versa. Thus, it makes a significant outcome between salary based and self-employed applicants. It is quite hard to explain in words and list down one by one. Applicant should understand his profile well and work closely with a professional mortgage banker in order to get things done effortlessly. If you need this personalised service, please don’t hesitate to contact us. We will do our best to give you some advice.
Applying for a mortgage could be a very tedious process or as easy as ABC if you know how to do it right in the beginning. It is indeed a very personalised process which involves a lot of P&C documents and well-planning. However, if you know what the bank requires with a good track record of yours, we can confidently say that you are almost there already.
If you are facing any difficulties in getting your loan approved, perhaps you would like to hit the button below and we will get you connected with our preferred experienced bankers. No obligations, take it easy.