HF to offer new u-Bogeumjari mortgage loan with lower rates

- From 3.36%, u-Bogeumjari loan offers the lowest rate among Bogeumjari loan products -

On June 14, 2010, Housing & Finance (HF, CEO Joo-jae Lim) announced its plan to launch a new mortgage loan named u-Bogeumjari loan. The announcement was made at the Korea Federation of Banks in Myeongdong with HF CEO Joo-jae Lim, IBK President Yong-ro Yun, and Samsung Life Insurance President Sang-hang Kim in attendance (see photo). In order to launch a loan product with a competitive rate, HF signed a memorandum of understanding with IBK Industrial Bank of Korea and Samsung Life Insurance at the end of 2009. Since then, the three organizations have worked together to develop the u-Bogeumjari loan* and recently completed the necessary computer system.

* A customer-centered product offering a substantial reduction in interest rates for borrowers taking out a loan through the Internet, by telephone, or by mail (Ubiquitous)

From June 14, 2010, prospective borrowers can apply for the loan online at www.e-mortgage.co.kr. After consulting with an HF agent over the phone, they send the required documents to HF by mail or fax for an eligibility review (no visit to an HF office is required). Once approved, borrowers can take out the loan from IBK or Samsung Life from June 23, 2010.   

By directly collecting principal payments from borrowers, a function that had previously been handed to financial institutions, HF was able to bring down the cost of borrowing, thereby reducing the interest rate of the u-Bogeumjari loan by 0.4%p over other existing loans. Borrowers selecting the interest rate discount option and the mortgage registration fee payment option are entitled to an additional 0.2%p reduction. In this case, the annual rate of the COFIX-linked loan (with a variable rate that changes every six months) can be as low as 3.36% while the fixed-rate loan can be as low as 5.1%. Eligibility for the loan was also expanded, allowing a borrower to use the home of his/her spouse as collateral and extending the age limit from ages 20-65 to 20-70. Also, in addition to the fully amortizing payment option, the u-Bogeumjari loan offers a graduated payment option for those who are in the beginning stages of their career.

“The launching of the u-Bogeumjari mortgage loan with substantially lower rates will likely reduce the household burden or economic shock from a possible exit strategy. This loan will help increase the supply of long-term, fixed rate mortgage loans,” said  an HF official. “We began receiving applications on our website from June 1, 2010. Already, we have more than 5,000 applicants on our consultation list. This shows that public interest in the new fixed-rate loan is high.”

<Photo> HF CEO Lim (center) poses for a photo with IBK President Yun (left) and Samsung Life President Kim (right) to commemorate the launching of the u-Bogeumjari mortgage loan at the Korea Federation of Banks in Myeongdong.