HOME LOAN 101.2

Required Documents for Home Loans

The loan purchaser is divided into 2 categories: Employer (Er) and Employee (Ee). Then the Ee is further sub-divided into salaried employee and commission earner.

  • Cash purchaser
  • Loan purchaser or Mortgagor
    • Employer
    • Employee
      • Salaried employee
      • Commission earner

For loan purchasers, the standard documents that banks generally require are:

  • Copy of purchaser’s NRIC / Passport
  • Sales & Purchase Agreement / Title of property / Booking form
  • Pay slips and bank statements
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For salaried employees, banks will need at least 3 months latest pay slips. For employers and commission earners, banks will need at least 6 months latest pay slips. This is due to the difference in the nature and the risk profile of the types of occupations.

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After collecting the required documents from the borrower, the bank officer will then submit the documents and a report to the bank’s higher management for approval. Usually the bank loan approval will take 2 – 3 working days upon successful collection of all the required documents from the borrower.

Once approved, the borrower will receive a Letter of Offer (LO) from the bank. The bank is offering the borrower a loan plan at an interest rate on a loan margin for a tenure period.

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After accepting the bank’s offer, the borrower then have to read and sign the Loan Agreement (LA). Its a binding legal document whereby the bank is going into an agreement with the borrower to finance the borrower for a property purchase.

After signing the Loan Agreement (and Sales & Purchase Agreement), it’ll take another 3 months for the loan from the bank to be disbursed or released to the vendor. After the loan has been fully disbursed, the borrower has to start servicing the instalment.

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The above process applies to sub-sale or secondary market properties. For under-construction or primary market properties, the home loan procedure is slightly different, which will be explored in further detail in another article.

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IQI Realty Sdn Bhd
9-3, 3rd Floor, Medan Klang Lama 28,
Jalan Klang Lama, 58000 Kuala Lumpur

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