It may be harder for home buyers to secure bank loans now.

'Banks are a bit more cautious these days,' says Mr Chris Koh, director at Dennis Wee Properties. Two other property experts that Life! spoke to agree.

ERA Asia Pacific's director Eugene Lim says banks now take longer to process home loan applications. 'During good times, loans would be approved within 24 hours. Currently, it can take as long as two weeks,' he says, adding that it is a sign that banks are running more detailed checks.

They are also less willing to offer a loan quantum of 90 per cent, which was the norm during good times, says Mr Vincent Koh, vice-president of HSR International Realtor.

Loan quantum refers to the size of a loan in relation to a property's market valuation. Industry players say there have been cases where the bank's valuation of an apartment is lower than what a seller is asking for.

'Most usually offer 80 per cent now,' says Mr Koh of HSR.

Industry insiders say loans are generally smaller or harder to secure for the following people:

1) Those on commission-based income or are self-employed, compared to employees on fixed salary.

2) Applicants who are single, compared to married couples with dual income.

3) Those who have just started work.

To make up the shortfall, these home buyers will have to dig deeper into their savings or their CPF accounts.

Mr Gregory Chan, OCBC Bank's head of consumer secured lending, says the bank assesses and approves each loan application on the basis of the customer's credit worthiness.

'Ultimately, the loan quantum is determined by property valuation and credit worthiness of the applicant,' he says.

Among the factors considered are the individual's financial commitments, income and credit history.

United Overseas Bank's head of loans division, Mr Kevin Lam, says customers with a good credit record and stable income can be assured that UOB will consider their loan applications favourably despite the current economic environment.

Regardless of the size of the home loan, Mr Dennis Khoo, general manager of retail banking products at Standard Chartered Bank, says that in times of economic stress, it is prudent for customers to consider a smaller loan to ensure that they do not over-extend themselves.

'We recommend that customers work with their relationship managers to identify their individual situation and preferences, before selecting a home loan package,' he adds.

This article was first published in The Straits Times on January 17, 2009.