Financial Authorities Show Caution... May Include Household Debt Modernization Measures
[Asia Economy Reporter Kwangho Lee] The Korea Housing Finance Corporation is considering improving the eligibility criteria for the Bogeumjari Loan to reflect changes in the real estate market situation.
According to financial authorities on the 21st, the recent business report submitted by the Korea Housing Finance Corporation to the National Assembly is known to include this content.
The Bogeumjari Loan is a product that allows loans up to 300 million KRW if conditions such as an annual income of 70 million KRW or less (only the individual if unmarried, combined for couples if married) and a housing price of 600 million KRW or less are met.
The ultra-long-term policy mortgage (housing mortgage loan) product with a 40-year maturity, which the financial authorities decided to introduce first for youth and newlyweds, also applies the Bogeumjari Loan criteria.
The problem is that the number of houses eligible for the Bogeumjari Loan is gradually decreasing due to rising house prices. It has long been the case that the median price of houses (apartments, detached houses, row houses) in Seoul exceeds 600 million KRW.
According to the time series statistics on housing price trends by KB Kookmin Bank, the median price of houses in Seoul last month was 807.59 million KRW.
This is also why voices calling for lowering the threshold for the Bogeumjari Loan are emerging inside and outside the political sphere.
However, the financial authorities recognize the gap between the house price level and the Bogeumjari Loan criteria but remain cautious about easing the criteria.
In the case of Seoul, it is becoming increasingly difficult to find houses priced below 600 million KRW, but from a nationwide perspective, the threshold of 600 million KRW is not considered high by the Financial Services Commission.
Above all, there are many factors to consider, such as the household debt advancement plan and trends in loans and house prices, so the easing of the Bogeumjari Loan criteria is not currently on the agenda for review.
However, there is also a consensus on the need to raise the housing price criteria for the Bogeumjari Loan, so it is possible that the issue of Bogeumjari Loan criteria will be included in the household debt advancement plan to be announced next month.
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