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Thursday, November 5, 2009

Group calls for standard housing loan documents

The banking industry should consider having standard documents for housing loans after some banks have started to raise effective lending rates for new home buyers.

Currently, the forms differ from bank to bank and a uniform application would benefit consumers, said National Housing Buyer Association (NHBA) honorary secretary-general Chang Kim Loong.

A standard loan documentation would mean that house buyers will know the contents of the documents before even thinking of buying a house.

"With a standard loan document, consumers don't have to go through the bane of reading and understanding the forms before signing the document as everything is standard... they just need to print it out.
"I urge Bank Negara to look into this to protect the house buyers," he told Business Times yesterday.

Checks with the country's nine commercial banks revealed that all of them will raise their mortgage rates for new borrowers.

This will be around Base Lending Rate (5.55 per cent) minus 1.8 per cent from BLR minus 2-2.3 per cent.

"The only thing that would differentiate one bank from another now is the service that the bank renders," said one banker who did not want to be identified.

By Business Times (by June Ramlee)

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