Promise on Interim House Payment in the Air

As local banks decided to reduce the amount of housing mortgage loans, housing construction companies are in a state of emergency. The construction companies have promised to provide loans for interim housing payments at the time of selling the apartments, however, the loan rate has remarkably tumbled from the current level and they will not be able to keep their words with the consumers.

Due to the government’s real-estate policy effective October 29, the loan rate of interim payments for apartment will be down from 50 percent to 40 percent of the housing distribution price, and 40 percent to 30 percent for officetel. As for commercial centers, which have been receiving loans up to 30 percent, they may reportedly be excluded from the subject of the mortgage loan plan.

An officer of local bank said, “Whether it is feasible to get a loan for interim payment or not depends on the banks’ decision. However, the rate is likely to be decreased further due to the new governmental plan.” He also mentioned that some banking firms may not offer any loans based on their own reasons.

The problem lies in here; housing companies sold houses to the consumers on the assumption that the interim payment loans will be offered. But it is now tougher to get the amount of loans that the housing firms previously promised to the contractors. On the consumers’ side, they are as puzzled as the housing companies because they are facing an increased financial burden due to the reduced loan rate of interim payment.

As a matter of fact, there are a series of anticipated cases which are currently taking place in Ilsan city and Bundang city. An officetel in Ilsan was distributed to the consumers under the condition that the housing company will support the loan for interim payment at up to 70 percent of selling price. But the involved banks recently took measures of lowering the loan rate to 40 percent, and therefore consumers have no choice but to make up a sum of 30 percent of lacking loans.

Those who bought several officetels for managing rental business received an additional burden of 30 percent per house, and some of them are often unable to pay the sales charge within the due date.

The housing construction companies have been searching for the measures against the complaining consumers, but they are still in the middle of labyrinth.

The interim payment refers to the money left from the deposit and the balance, and takes 60-70 percent of usual housing sales price. Originally, it was the consumer who should supply the payment, but after the financial crisis in 1998, housing construction companies provided services for assisting loans for the purpose of successful house sales.

Chang-Won Kim changkim@donga.com