National Credit Bureau blamed for rejection of 30% of home loan applications

This was disclosed by deputy minister of Finance Mr Wisut Srisuphan yesterday at the opening address of the Home and Condo Expo at Bitec Bangna.

Mr Wisut disclosed that more than 100,000 applicants of home loans or about 30% have failed to receive approval.

His disclosure does not bode well for real estate developers at the expo which were giving out special promotions such as low interest rates and discounts on home purchases as high as one million baht.

Some even had special deals forgoing transfer fees and other discounts lasting up to 1 – 10 years. One company even gave away 1 years free expressway charges for potential buyers.

Commenting on this development, the president of the Housing Business Association Mr Athib Fisanont said this mainly attributed to financial institutions basing a major portion of their qualification process on information from the National Credit Bureau.

To stimulate the industry, the association is asking that a reduction in National Credit Bureau default terms from 3 years to only 1 year to help drive the housing sector, he said

But the National Credit Bureau stated that the main reasons that applicants fail to get approval are because of inadequate earnings, application for loans exceeding income, default on other loan payments and finally applying for loans for the purpose of speculation.

It advised developers to reduce their prices and applicants to take out joint loans instead to increase their scope for home loans.