Second credit check is done to check if a buyer's financial position has deteriorated since original credit assessment, says Minister of State for Ministry of National Development Desmond Lee.
SINGAPORE: A total of 51 flat buyers were unable to take possession of their new flats after the second credit assessment, said the Minister of State for Ministry of National Development Desmond Lee on Thursday (Feb 12).
Answering MP Zainal Sapari’s Parliamentary question on the number of potential Housing and Development Board (HDB) flat buyers between 2013 and 2014 who were unable to take possession of their new flat, Mr Lee said HDB conducts a second credit assessment before it disburses a housing loan to flat buyers when the keys are ready for collection.
“This usually occurs a few years after the first credit assessment and an HDB Loan Eligibility (HLE) letter is issued,” he said. “The second assessment is to check that flat buyers’ financial positions have not deteriorated in the intervening years, and that they are still able to service the monthly mortgage instalments.”
Mr Lee said it would not be prudent for flat buyers to complete the purchase if they are no longer able to service a housing loan. “It would merely be creating a potential loan defaulter with many other new problems for the family."
He added that if a flat buyer does not proceed with his flat purchase, 5 per cent of the purchase price will be forfeited to HDB. The housing agency may consider refunding the forfeited amount “in selected cases of genuine financial hardship”.
- CNA/ct
Source: Channel NewsAsia (12 Feb 2015)