First-time home buyers should ensure they meet the affordability criteria before buying a home to avoid taking on a debt burden they cannot handle.
Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said banks had provided individuals “many flexible ways” for them to meet the affordability requirements.
“They must, and if they can, demonstrate even if they are sole proprietors and they are not employed in any organisation or corporation that they can prove that they have met the affordability criteria in many different ways. Banks have given that flexibility.
“It’s worse when somebody buys a house and in the end, he or she is not able to have the basic needs because of the debt burden they have taken on,” she said on the sidelines of the Malaysia-OECD High-Level Global Symposium.
She added that it was worse if the first-time home buyer was not able to service the loan in the end. “The house will be repossessed and they can end up in bankruptcy. We certainly don’t want that to happen,” she said.