First-Time Home Mortgage Loans Guaranteed for Up to 80% of Housing Price
Support Provided for Amount Exceeding Bank Mortgage Loan Limit Within 80% LTV
[Asia Economy Yeongnam Reporting Headquarters Reporter Kim Yong-woo] #. Mr. A, in his 30s, recently plans to purchase an apartment worth about 400 million KRW for the first time in his life ahead of his marriage, but he only has 80 million KRW in savings.
He tried to use a loan and knocked on the bank’s door, but was told that loans are only available up to 70% of the housing price, and up to 260 million KRW excluding a small lease deposit of 20 million KRW, making it difficult for him to secure his own home.
What should Mr. A do? Going forward, Mr. A will be able to use the ‘First-Time Special Purchase Fund Guarantee’ to get a loan up to 80% of the housing price, or 320 million KRW, making it easier to secure his own home by adding his 80 million KRW in personal funds.
Korea Housing Finance Corporation (HF) will launch the ‘First-Time Special Purchase Fund Guarantee’ on the 31st, which supports citizens purchasing their first home to receive mortgage loans up to 80% of the housing price.
The First-Time Special Purchase Fund Guarantee is a product that supports first-time homebuyers to receive mortgage loans up to an LTV of 80%, with a maximum guarantee limit of 300 million KRW.
Eligible applicants are those who are first-time homebuyers under the ‘Banking Supervision Regulations’ and apply for mortgage loans for the purpose of purchasing a home. The target housing must be priced at 900 million KRW or less and must not be leased. All household members must have no history of home ownership.
The guarantee amount is the difference between 80% of the housing price and the mortgage loan amount calculated according to the bank’s internal standards. Customers can receive additional mortgage loans from the bank for this difference using the corporation’s guarantee.
However, in this case, the additional loan amount through the corporation’s guarantee cannot exceed 35% of the housing price, and the maximum guarantee limit is 300 million KRW.
The guarantee fee borne by the customer is calculated based on the guarantee amount, guarantee period, and guarantee fee rate, which ranges from 0.05% to 0.20%, determined by housing type and credit rating.
The First-Time Special Purchase Fund Guarantee can be applied for together when applying for a mortgage loan at the bank.
The participating banks are 13 in total: Gyeongnam, Gwangju, Kookmin, IBK, Nonghyup, Daegu, Busan, Suhyup, Shinhan, Woori, Jeonbuk, Jeju, and Hana Bank.
A representative of Korea Housing Finance Corporation said, “We expect that the launch of the First-Time Special Purchase Fund Guarantee will help real demanders prepare funds for home purchases, and we will continue to actively strive to support housing finance for real demanders.”
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