"House Price Based on Application Date"... Passed Even If Price Exceeds 600 Million Won After Applying for Bogeumjari Loan (Summary)

"Even if the house price exceeds 600 million won, if it was below 600 million won on the application date, you can receive the Bogumjari Loan"

[Asia Economy Reporter Sunmi Park] Even if the house price suddenly exceeds the application criterion of 600 million KRW after applying for the Bogeumjari Loan, approval will be possible. Additionally, the scope of preferential interest rate application will be raised from a combined annual income of 60 million KRW or less for couples to 70 million KRW or less for newlywed households and multi-child households.

The Korea Housing Finance Corporation announced on the 23rd a preliminary notice of the revision of the Bogeumjari Loan operational guidelines containing these details.

How will the Bogeumjari Loan change?

They stated that even if the appraised value of the collateral house exceeds 600 million KRW on the loan approval date, the operational guidelines will be revised to allow loans if the market price information on the application date is 600 million KRW or less.

However, this applies only if there is market price information from KB Kookmin Bank or Korea Appraisal Board (Real Estate Tech). Also, if the house price exceeds 900 million KRW at the time of collateral appraisal (approval date), the loan cannot be processed. Until now, the Korea Housing Finance Corporation did not provide Bogeumjari Loans if any of the market price, appraisal value, or sale price exceeded 600 million KRW at the time of loan approval.

Furthermore, the corporation plans to raise the income threshold for preferential interest rates from the current combined annual income of 60 million KRW or less for couples (70 million KRW or less for newlyweds) to 70 million KRW or less for newlywed households and multi-child households.

This adjustment is made considering that the median income for a five-person household this year is approximately 67.533 million KRW annually, so that more people can benefit. Also, the limited liability type Bogeumjari Loan (where repayment responsibility is limited to the value of the collateral house even if the house price falls) has so far been allowed only for non-homeowners, but it will now be permitted for temporary two-homeowners who have agreed to dispose of their existing home.

The Korea Housing Finance Corporation explained the preparation of the revision by saying, "We intend to change the Bogeumjari Loan handling requirements to enhance predictability for policy mortgage applicants and strengthen inclusive financial policy support such as preferential support for multi-child households."

2% Annual Interest Rate... Long-term Fixed-rate Installment Repayment Method
Many Cases of Rejection Due to Sudden House Price Surge

The Bogeumjari Loan is a product that lends up to 300 million KRW for housing purchase funds, etc., through a long-term fixed-rate installment repayment method. Since it was introduced to help low-income people purchase their own homes, the interest rate is low.

From this month, the 'u-Bogeumjari Loan' applied for on the corporation's website and the 't-Bogeumjari Loan' applied for at bank counters apply interest rates ranging from 2.10% per annum (10-year term) to 2.35% (30-year term) depending on the loan maturity. The 'Akkim e-Bogeumjari Loan,' which can be applied for online to save costs, has interest rates from 2.00% (10 years) to 2.25% (30 years) per annum.

However, although the interest rate is low, the application conditions and screening are strict. It applies only to houses priced at 600 million KRW or less, but as housing prices have risen rapidly recently, there have been cases where the house price was below 600 million KRW at the time of application but exceeded 600 million KRW during the screening period, which can be up to 40 days, resulting in rejections. From 2019 until July of this year, there were 167 cases where applicants for the Akkim e-Bogeumjari Loan (electronic contract method) were rejected because the house price exceeded 600 million KRW.

This content was produced with the assistance of AI translation services.