Key Takeaways
- 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.
Read More: A Step-by-Step Guide to Home Refinancing in Malaysia
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.
Read more: High Credit Card Debt Consolidation in Malaysia: What to Do
Bluebricks’ Loan and Consultancy Services
By following these steps and being proactive in your approach, you can navigate the mortgage loan application process with confidence.
Using a qualified loan consultancy like Bluebricks can increase your chances of making your homeownership dreams a reality.
As a leading bank loan and debt consolidation agency in Malaysia, Bluebricks offers a diverse suite of tailored financial solutions, such as:
- Personal loan services
- SME loan services
- Mortgage loan services (to purchase a new home, refinancing and cashback purposes)
- Collateral loan services
Our experts also provide tailored advice to find the best loan product for your circumstances, considering factors like:
- Required loan amount.
- Urgency of the need.
- Property ownership duration.
- Income level.
- CTOS score, including credit score and history.
Why Bluebricks
1. One of the Top 10 Leading Loan Agencies in Malaysia
Our loan agents represent both individuals and businesses, offering technical financial advice to help secure loan approvals. Even if banks have previously rejected you, we provide access to a broad spectrum of loan options. Our aim is to enhance the success rate of your loan applications and minimise rejections.
2. Over 10 Years of Experience
With over a decade of experience and current banking knowledge, we excel in securing personal, business, mortgage, and collateral loans, navigating challenges like CTOS/CCRIS, and guiding clients confidently towards successful loan approvals.
3. One-Stop Solution
We provide a one-stop loan service, compiling various options from banks and credit institutions for you. Simply submit your income statement, assets, liabilities, employment record, and credit history, and we’ll handle the collateral and documentation to streamline your loan approval process.
4. Full Financing with 100% Bank Loans
We ensure 100% bank loan availability to provide full financial support, making it easier to achieve your goals and build a positive credit history.
5. No Upfront Payment Required
Our no upfront payment policy is designed to ease your financial journey, allowing you to start your investment without initial costs, reducing immediate burden and demonstrating our commitment to your satisfaction and trust.
