Bank Negara Malaysia said slightly less than half of the applicants for My First Home Scheme were unsuccessful in obtaining loans under the scheme as they failed to meet the eligibility criteria.
These applicants amounted to 505, or 47.5 per cent, of the total applications of 1,062 as at the end of January, said the central bank in a statement yesterday.
The participating banks received a total of 1,624 applications as of January, but 562 were subsequently withdrawn due to multiple applications to various banking institutions.
Bank Negara said from a total of 1,062 actual applications, 389 (36.6 per cent) have been approved by banking institutions, of which 280 have obtained guarantee from Cagamas Bhd, the national mortgage corporation, while 168 (15.8 per cent) are currently being processed by banking institutions, said Bank Negara.
My Frist Home Scheme, launched in March 2011, aims to allow young working adults to obtain 100 per cent financing from banking institutions to purchase their first home valued at a maximum of RM220,000 (for single applicants) or a maximum of RM400,000 (for joint applicants of husband and wife with household income below RM6,000 per month cumulatively).
Applications are made to participating banking institutions and upon approval Cagamas will provide a guarantee for the first 10 per cent of the loan.
The statement was issued following news reports yesterday claiming that the success of the scheme had been hampered by the unwillingness of banks to risk giving loans with monthly repayments that come up to more than half of the applicants' salary.
In fact, a Chinese daily even reported on March 5 that not a single loan under the scheme has been approved.
Bank Negara said that to qualify, applicants should have the capacity to meet their debt obligations, provide the evidence of a sustainable income stream, good credit history and able to meet the basic eligibility criteria of the scheme.
"The intention is to ensure that young borrowers are not over burdened by debt obligations that may lead to bankruptcies or foreclosures," said the central bank. - By Business Times
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