Banks will continue to provide home loans to eligible borrowers - ABM

From January to May 2017, commercial banks approved over RM25.7 billion and disbursed in excess of RM24.6 billion in loans for the purchase of residential property, ABM said in a statement in response to recent media reports on calls to relax the loan criteria for potential buyers of affordable houses.

"Our member banks have not deviated from their usual approach to the screening of loan applications. The main reason for applications being rejected would include high debt service (DSR) ratio," it said.

Other reasons cited were applicants' adverse credit history, insufficient income, repayment capability, weak documentation or banking records, ABM said.

"It is observed that the rejection of housing loan applications cuts across all income ranges but trends higher among the lower to middle income group due to smaller disposable income relative to the new and existing monthly commitments," it said.

Generally, ABM said the types of properties which this category of applicants looked for were terrace houses and apartments of which apartments were especially popular in key urban areas in view of the relatively lower pricing.

"It is therefore crucial for all borrowers to review their own affordability in line with their financial circumstances," it added.