Prior to diving into the mortgage application process, it’s essential to heed this advice, which could potentially spare you valuable time and considerable financial resources. Delve into these 10 commandments before embarking on your property journey to equip yourself with the knowledge necessary for a successful and cost-effective experience.

1. Thou Shall not cheat the bank

If you are thinking of buying many properties with just 1 income and well above your eligible limits, please think again. Now the banks do check the CCRIS again before releasing the loan. The have the right to reduce the loan limit as stated in the letter of offer you signed.

2. Thou Shall not fake documents

Some people have difficulties getting their loan approval. Thus, they resorted to doing fake documents. There are even companies specialized in this area to do it on behalf of the borrower. Let me tell you, banks are not stupid. They always double check before approving any loans. Currently, the check are getting tighter. Once caught,  it will be a police case.

3. Thou Shall not be greedy

The word GREED seems very familiar to everyone. Now instead of buying 1 property within your capacity, you instead buy 5. You have been thought how to achieve a lifetime goal of financial freedom at a very short time. If you are lucky you can be an instant millionaire but if you are not, you end to be an instant millionhair.

4. Thou Shall not be guarantor

Do you know that been a guarantor for someone else loan can be lead to loan rejection. Many years back, I have this case where a couple were planning to buy a house because they are getting married 6 months later.  They told me that all installments are promptly paid and they do not have any problem with the banks. Their loan was actually rejected by the bank because the lady stand as a guarantor for the brother’s loan. The brother’s car was repossessed by the bank. Her property loan is affected also.

5. Thou Shall not incur debts

The more debt you have the more difficult to get loan approval. Debts such as personal loans, car loans and etc are calculated in Debt Service Ratio (DSR) and will be part of approval. High personal DSR can either cost you your loan rejection or a very low margin of finance approval. The smart way is to minimize your debts or to repay all debts.

6. Thou Shall not use credit card

Do you know that credit card is the main culprit for loan rejection? Out of 10 loan rejected 65% are from credit card usage. Credit card function like a free money. Use now pay later. As in the term and conditions,

 your only required to pay 5% of the usage every month. Many people also resort to buying things in credit via credit card. All these will be calculated as your debts. The banks will take 5% of the outstanding amount as calculation. If the credit card usage is more than 70% of the approve limit, you are deemed as a high risk person even though you paid the minimum 5% monthly. Your loan approval will be affected.

7. Thou Shall pay all your loan promptly

As a bank, they will reject a loan if they were to find out that you have not paid your existing loan promptly. They can see from your CCRIS record. The bank will be worried as they are going to lend you some more but you have already showed to them you are not a good paymaster. They will assume that in future they will have the same problem. They rather not lend to you.

8. Thou Shall only buy what you can afford

Many people especially youngsters because of peer pressure buy property that they cannot afford to pay. The person can only afford RM300,000 property but end up buying RM600,000. The installment will be double. As the bank have their strict calculations on approval, the loans might be rejected or the margin slash. We cannot blame the bank for this as they are not charity organization.

9. Thou Shall not change job

You might think that what changing job have to do with loan approval. Please do not take this lightly. To the bank you are new to the company although you’re already working for years in your previous company. As you are new, your job is not secured and you might be terminated in 3 or 6 months period. So, the right way to do it is to apply the loan while you are at the existing company. After approval you move on to another company will not affect your loan.

10. Thou Shall do at least one facility

Why you may asked? Isn’t no debts at all easier to get approval? You are wrong. To the banks, if you do not have any facility at all you are too cleaned. They do not know who you are. Your CCRIS is too clean. Yeah, I agree getting a loan nowadays are very troublesome.  Well very simple to overcome this. Apply for a credit card, make sure you use it (every month fully paid is ok) then the banks will grant you the loan.