From the 30th, Residential Office and Villa Loans Can Also Be 'Switched Online'

"Youth and Low-Income Housing Finance Burden Reduction"

The Financial Services Commission announced on the 29th that starting from the 30th, the online refinancing loan service will expand its target users from existing apartments to include residential officetel and villa mortgage loans.

The government announced plans to expand housing supply to stabilize national housing. On November, new sites for 50,000 households will be announced. The photo shows a dense villa area in Yongsan-gu, viewed from Namsan, Jung-gu, Seoul on the 9th. Photo by Jinhyung Kang aymsdream@

The collateral housing eligible for the refinancing service includes residential officetels or villas (row houses and multi-family houses) for which real-time market price inquiries are available. A residential officetel refers to an officetel that was confirmed as residential at the time of the original loan through the financial institution’s verification of move-in registration, and is currently being used for residential purposes.

Similar to the general housing mortgage refinancing service, refinancing is possible only after six months have passed since the original loan was taken out. Loans that are in delinquent status, involved in legal disputes, or are low-interest policy financial products are not eligible for refinancing.

To this end, financial institutions participating in this project plan to actively utilize not only the traditionally used market prices such as KB market prices (general average price) based on actual transaction prices, but also services from providers offering prices through various Automated Valuation Models (AVM). This is to provide smoother online loan refinancing services for officetels and villas, which have relatively less actual transaction data compared to apartments.

The refinancing service for residential officetel and villa mortgage loans proceeds through the same stages as for apartments: loan comparison and selection → loan application → loan screening → contract and execution (repayment). Users can first check the interest rate, balance, and other details of their existing loans through loan comparison platforms or the financial institution’s own application (app), and compare these with the preliminary interest rates and limits of new loan products from financial institutions.

If users select a new loan product they wish to refinance to through the inquiry, they can apply for the loan via the financial institution’s own app or branch office. Most of the basic documents required for the loan application can be verified by the financial institution with the user’s consent. However, documents that the financial institution cannot verify on behalf of the user, such as the registration certificate and move-in household inquiry report (applicable only for officetel mortgage refinancing), must be submitted by the user through non-face-to-face document capture methods, so it is advisable to prepare these in advance.

Once the user applies for the loan, the new loan financial institution will conduct loan screening for about 1 to 2 weeks (business days). During this period, for officetels, the financial institution will conduct an on-site inspection to confirm whether the officetel is being used for residential purposes.

After the loan screening is completed, the financial institution will notify the user of the screening results via text message or other means. Then, when the user finalizes the loan conditions such as repayment method and interest rate structure through the financial institution’s app or branch office and signs the loan agreement, the refinancing procedure is completed from the user’s perspective.

A total of 29 financial institutions are participating in the service. This excludes three institutions among the 32 participants in the housing mortgage refinancing service that do not handle officetel and villa mortgage loans. Among these, 13 institutions (12 banks and 1 insurance company) provide new loans. Users can check their existing loans and compare the conditions of loans to refinance through a total of six loan comparison platforms and 13 financial institutions’ own apps.

The Financial Services Commission stated, "Residential officetel and villa (row house and multi-family house) mortgage loans, for which real-time market price inquiries are available, can now be refinanced more easily through the online loan refinancing service." They added, "As a result, housing finance costs for key residents of officetels and villas, such as young people and low-income households, are expected to be reduced."