Trapped in Debt: How a 70-Year-Old Man Fell Victim to a 40-Year Mortgage Nightmare
Korea Housing Finance Corporation Offers 40-Year Mortgage Loans to Seniors
The Korea Housing Finance Corporation (HF) has been revealed to offer a 40-year maturity home mortgage loan product to seniors in their 70s or older.
This loan product is part of the Green Bogeumjari Loan, which is a financial product of the main metal company’s policy. However, the regulations of the financial authorities are not reflected in this loan product.
According to data presented by Kang Hoon-sik of the Democratic Party of Korea, a 40-year maturity green home loan product for borrowers in their 70s or older was implemented in December last year.
This loan product was launched despite the financial authorities regulating ultra-long-term mortgage products for 40 to 50 years in September last year, citing them as a cause of the increase in household debt.
Eligibility for the Loan Product
The Jugeumgong Green Nest Loan product was launched in September last year. To be eligible for this loan product, borrowers must receive green building certification level 2 or higher. A favorable interest rate of 0.1% point (p) is provided with a maturity of up to 40 years, regardless of age.
However, in accordance with the Bogeumjari loan processing standards, a mortgage loan with a maturity of 40 years can be obtained if the debtor is 39 years old (new spouse under 49 years old) or if the mortgaged house is a building green grade 2 or higher.
Even people in their 70s or older can still get a green home loan with a maturity of 40 years as long as the mortgaged house is grade 2 or higher.
Loan Status
As of this month, there are 19 cases (KRW 4.8 billion) of loans with a maturity of 40 years for people in their 60s or older, and 1 case (KRW 100 million) for people in their 70s or older. With a maturity of 30 years, there are 16 cases (KRW 3.6 billion) for people in their 60s or older and 5 cases (KRW 1.1 billion) for people in their 70s or older.
Review of Loan Processing Standards
The Korea Housing Finance Corporation has announced that it is reviewing its Bogeumjari loan processing standards.
Representative Kang Hoon-sik has pointed out that the regulations of the financial authorities are not reflected in the Jugeumgong Green Nest Loan. He emphasized the need for the Korea Housing Finance Corporation and the Financial Services Commission to design products in detail to suit the original purpose of policy funding.
(Photo = Yonhap News)