Borrowers in jobs at risk face tighter processing for new home loans

Those with variable income in certain virus-hit industries affected; banks supportive of existing borrowers seeking refinance

Published Wed, Aug 5, 2020 · 09:50 PM

Singapore banks

Singapore

HOME buyers are reportedly facing tighter credit assessment when they apply for mortgages - especially if they work in sectors that have been severely affected by Covid-19.

On the other hand, for existing borrowers hoping to re-finance to cheaper home loans, banks are supportive and are easing the debt servicing criteria.

Those earning variable income in industries which have been badly hit by the pandemic such as in the food and beverage and hospitality businesses have seen a higher "haircut" applied to their incomes when applying for a home loan.

Banks say they are prudent in their credit assessment of home loan applicants while keeping within guidelines.

A DBS spokesperson said a home loan is a long-term commitment and in view of the impact of the global pandemic on the economy, "we'd advise new home loan borrowers to exercise furthe…