“HF expands the loan to value for home purchase guarantee”

HF expands the loan to value for home purchase guarantee by reflecting the market value of a home in calculating the maximum guarantee limit. In addition, it becomes much easier to switch from a high-rate existing mortgage to a new loan with low rates.

The Korea Housing Finance Corporation (HF, CEO Joo-jae Lim) announced on June 20 that it improved the way of assessing housing prices in order to ease inconvenience in using home purchase guarantee and raise the appraised value of a home to the level of market value. HF lifted a restriction in which home values are assessed within the transaction values and allowed financial institutions to assess them according to their rules reflecting market values.

Customers so far could repay only within the scope of the secured loan when they pay back their existing loans by using the guarantee for home preservation*. Yet HF’s recent action allows home purchase guarantee users to borrow money not only using the secured loan but also the guaranteed loan.

* Home Preservation: The loan taken out by putting up a house as collateral within 3 months to 15 years from home purchase.

A HF official said, "Many people pointed out that assessing home values within the transaction values is unreasonable since home preservation loans are offered up to 15 years from home purchase and that customers suffer inconvenience in proving the transaction values." The official predicted, "This measure will enhance home-buying opportunities for low-income people without home ownership and revitalize the housing market because the initial costs of home purchase come down."