IN THE letter, "Do factfinding for property buyers" (my paper, Dec 17), Mr Ee Teck Siew suggested that the Government and industry associations consider implementing a "fact-finding process" to ensure that potential homebuyers buy properties they can afford, based on their ability to service mortgage loans.

Most homebuyers would need to obtain a bank loan upfront.

They would therefore be subject to credit screening by banks, which will ensure that buyers can afford the properties they intend to purchase.

During such credit checks, banks would typically take into consideration a homebuyer's income, age and other debt commitments.

HDB flat buyers taking concessionary loans from the HDB are required to obtain an HDB Loan Eligibility (HLE) letter before committing to the flat purchase.

The HLE letter similarly takes into account the flat buyer?s age, income and other financial commitments to calculate the maximum loan quantum and expected monthly instalments, to ensure that the flat buyer is not financially overstretched.

Mr Lim Yuin Chien

Deputy Director
(Corporate Communications)
for Permanent Secretary
Ministry of National Development

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