Bogeumjari loan delinquency rate at an all-time low
- Date 2010-02-16
- Views 1,188
- Delinquency rates at the end
of 2009 stood at 0.43%, narrowing the gap with commercial banks -
The delinquency rate for Bogeumjari loans, a long-term, fixed interest rate
housing loan, has fallen to an all-time low. On February 16, 2010, the
Korea Housing Finance Corporation (KHFC, CEO Joo-jae Lim) announced that the
rate fell from 0.72% in December 2008 to 0.43% in December 2009, down about
40%. This is the lowest level since the corporation was established in
March 2004. As the rate fell by a large margin, the gap with the home
equity loan delinquency rate at commercial banks, which had widened to as much
as 1.20%p, narrowed to 0.10%p.
The downward trend in the delinquency rate is particularly noteworthy as Bogeumjari loans are extended even to people with an unfavorable credit history (ratings of 7 to 9) who are not eligible for a loan from commercial banks, and that 73.5% of the loans are taken out by those with an annual income of 40 million won or less.
<Bogeumjari loan delinquency rate by year>
To
cite another advantage, the delinquency rate of Bogeumjari loan borrowers with
a credit rating of 6 or higher (which would have allowed them to get a housing
loan from a commercial bank) was 0.25%, 0.08%p lower than the housing loan
delinquency rate of 0.33% at commercial banks. This supports the relatively
high soundness of amortization mortgage loans with long-term, fixed interest
rates.
"As the demand for long-term, fixed interest rate products continue to
grow amid concerns over market interest rates, the soundness of our Bogeumjari
loans is rising with improved loan appraisal services," said a KHFC official.
"Further, it appears that the nature of this loan, which is extended to
people with real demand for long-term financial planning, also has an impact
(on improved soundness)."