Hi guys! It’s been so long since my last blog post, today we are going to talk about how to start from a clean slate, finance-wise. Hope you enjoy. 🙂
One of the most important factors in getting a mortgage is a clean and clear credit record. See, more than your current financial capacity, your credit history tells of your borrowing and purchasing attitudes. This will give your prospective mortgage lenders an inkling of an idea on how well you can handle as big a loan as mortgage. I’ve spoken to many lenders from Maybank, CIMB, Hong Leong Bank and Bank Simpanan Nasional – and this is what they tell me.
According to Lisa Tai Poh Lin from Maybank, if you have had a history of repossession of any kind, recurring overdue payments, or anything similar, your lenders might less than likely approve of your loan. It makes you seem like a bad and irresponsible borrower – someone who would risk a bad investment on their part. And after the great meltdown in the real estate market in recent history, you cannot exactly expect them to be lax about these things.
That is why Malaysian real estate purchasing and mortgage experts (like Ahyat “Abalone” Rose and Kenny Cheow) advise on clearing out your credit history prior to applying for a mortgage. This may take time, this may even cost you something, but it will be well worth all the trouble when you see your mortgage application approved.
Starting From A Clean Slate…
Let’s consider this hypothetical scenario. You wanted to buy IOI’s very exotic 16 Sierra down in Puchong South but the money you have is not enough. You need mortgage. But first you need to clear your credit record first. Here are some tips on how to clear your credit record to get a better mortgage:
- Go to your credit officer and obtain a copy of your credit history. Check to see the accuracy of your credit records and make a record of things that you’d like to dispute with the officer. This is where keeping a record of your payments and purchases are important. According to Raymond Tai Yee Long (from Big Ears Lenders, a credit company based out of Kajang, Selangor), “Not only could you use them for your tax claims in the future; they are also very useful for disputing these kinds of things.”
- Pay off your remaining debts. This is probably the costliest of all the steps in clearing your credit record. Prior to making an application, the best way to clear up your history is one that says you don’t have any other debt that could compete with your income (and likely your clear capacity to pay for a mortgage loan). This sends your mortgage officer the message that you are actually embracing the gravity of a mortgage loan and you are clearing up space as far as debt is concerned so you could accommodate your new mortgage.
- Pay for a better credit rating. Not much of bribery, part of the process of getting a clear record would be to pay for your new clear slate. This will make all your bad records out of sight of your mortgage officers – forever. Of course, this may cost you a lot but it may just be well worth it.
- Cut off other avenues for borrowing and credit. Who needs too many credit cards anyway? Just the same as paying off any remaining debts, cutting off some less than important credit cards (and other loans, of course), you are showing your mortgage officer that you are making yourself more capable of paying off for your mortgage by reducing your other costs as well as other avenues and tools that create more costs.
You may have a lot of paperwork to do to achieve this but it may just be well worth it. If you need more advice on clearing your credit, contact these good folks (whom we here at Wiiloaded know personally) –
Chia Choon Toi (CIMB Bank, Kelana Jaya) – 012-3984782
- Axl Hai (UOB Bank, Bandar Puteri) – 016-2099834
- Kenny Cheow Kien Yee (Kenny Cheow Credit Counselling Service), 010-204498
- Mah Chow Hoi (RHB Bank Damansara Buloh), 012-3922881
Remember to say that you have been referred to by Dickson Dai Loke Chart, Wiiloaded Consultants for a good deal. 🙂