A chance to buy a home

A chance to buy a home

The Government is guaranteeing up to 120% loan from the total amount borrowed by buyers without fixed income for the MTEN public housing projects (PPR) and low-cost flats.

Federal Territories and Urban Wellbeing Minister Datuk Raja Nong Chik Raja Zainal Abidin announced that an agency called the Housing Credit Guarantee Corporation had been formed under the Finance Ministry for that purpose.

“This agency will provide guarantee to banks on loans borrowed by buyers without fixed income,” he said.

“House buyers can borrow up to 120% loan on the unit cost. If the unit costs RM35,000, a loan of RM42,000 will be extended.

“The agency will also give guarantee to loans taken by fixed income earners of up to the 120%.”

Asked why the need for the extra 20% of the loan amount, Raja Nong Chik said this was because there were additional costs such as legal fees and mortgage insurance on the house.

“The mortgage insurance is a bank requirement, which takes up a big chunk, of about RM2,500.

“So the total cost of the unit could be RM4,000 more than RM35,000. If it’s just a 100% loan, buyers still have to come out with the extra cash which they may not be able to,” he said.

“Buyers should be able to obtain loans as long as they have a combined household monthly income of RM1,000.”

Raja Nong Chik said nine banks had agreed to the scheme and Bank Negara had organised a meeting with the finantial institutions three weeks ago.

A new three-month period has been set for buyers to sort out their loan matters with the banks, starting from Aug 1.

“If buyers encounter problems, they can refer to the DBKL Housing Management Department and even with my ministry through a unit that monitors bank loan matters.”

He said that after the three-month deadline, his ministry would try to help those who still could not obtain the loans.

Of the 18,201 eligible buyers so far, 11,499 have agreed to buy.

From the 11,499 buyers, 1,928 buyers have signed the sales and purchase agreement of which 1,080 are buying with cash while the rest are getting bank loans.

A joint carnival for sale of the said units will be held before Ramadan in cooperation with the banks, at a date to be announced later.

Source: The Star

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