Cambodia’s growing Home Loan problem

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CEOCambodiaNews
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Cambodia’s growing Home Loan problem

Post by CEOCambodiaNews »

January 18, 2020
Cambodia’s growing Home Loan problem
Calls for more controls on developers also acting as loan arrangers

Real estate industry insiders want the central bank and the Ministry of Economy and Finance to set up policies and strengthen the law on residential project developers who act as financial institutions to provide housing loans to the customers without assessing their ability to repay them.

They say that because competition is tough in the real estate market in the Kingdom and the market is limited, some developers allow potential buyers to make installment payments on properties, especially houses, directly with the developers without asking for a down payment.

They are also offering discounts to attract customers to purchase their projects.

The fear is these strategies could hurt customers who lack financial literacy and don’t understand the obligations of repayment or the consequences of failing to meet them.

In some cases homes are repossessed and buyers lose a lot of money.

Po Eav Kong, chief executive officer (CEO) of Advance Real Estate, says that when people buy a house in a borey residential project by paying in installment to the developers, the interest rate can be higher compared with what banks and microfinance institutions offer.

He adds that the interest rate with Borey developers is from 10 percent to 20 percent per annum. However, if the customers get a home loan from a bank, the interest rate can be between 6 to 8 percent or, in some circumstances, 10 percent at most.
Full article: https://www.khmertimeskh.com/50680977/p ... home-front
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fazur
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Re: Cambodia’s growing Home Loan problem

Post by fazur »

CEOCambodiaNews wrote: Sun Jan 19, 2020 11:27 amThe fear is these strategies could hurt customers who lack financial literacy and don’t understand the obligations of repayment or the consequences of failing to meet them.
Yet, it goes on. Why? Greed.
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AronGlover
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Re: Cambodia’s growing Home Loan problem

Post by AronGlover »

This is certainly correct, but people themselves need to understand what they are doing, and how they will then pay off the mortgage debt
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Re: Cambodia’s growing Home Loan problem

Post by AronGlover »

CEOCambodiaNews wrote: Sun Jan 19, 2020 11:27 am January 18, 2020
Cambodia’s growing Home Loan problem
Calls for more controls on developers also acting as loan arrangers

Real estate industry insiders want the central bank and the Ministry of Economy and Finance to set up policies and strengthen the law on residential project developers who act as financial institutions to provide housing loans to the customers without assessing their ability to repay them.

They say that because competition is tough in the real estate market in the Kingdom and the market is limited, some developers allow potential buyers to make installment payments on properties, especially houses, directly with the developers without asking for a down payment.

They are also offering discounts to attract customers to purchase their projects.

The fear is these strategies could hurt customers who lack financial literacy and don’t understand the obligations of repayment or the consequences of failing to meet them.

In some cases homes are repossessed and buyers lose a lot of money.

Po Eav Kong, chief executive officer (CEO) of Advance Real Estate, says that when people buy a house in a borey residential project by paying in installment to the developers, the interest rate can be higher compared with what banks and microfinance institutions offer.

He adds that the interest rate with Borey developers is from 10 percent to 20 percent per annum. However, if the customers get a home loan from a bank, the interest rate can be between 6 to 8 percent or, in some circumstances, 10 percent at most.
Full article: https://www.khmertimeskh.com/50680977/p ... home-front
I was such an inexperienced person myself. I didn't understand financial literacy either, but these guys helped me with the loan. Because of the pandemic, my business has ceased to bring me a stable profit. I was thinking of saving up and buying a house because my wife was pregnant and we wanted to move to a bigger house with a private playground. I was afraid to take out a loan because I knew about the existence of fake trust companies that deceive people. And I started googling all sorts of mortgage companies and came across a Mortgage Broker that I trusted. Now I live in a big house, and my business is back on its feet, I'm happy.
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newkidontheblock
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Re: Cambodia’s growing Home Loan problem

Post by newkidontheblock »

AronGlover wrote:I was such an inexperienced person myself. I didn't understand financial literacy either, but these guys helped me with the loan. Because of the pandemic, my business has ceased to bring me a stable profit. I was thinking of saving up and buying a house because my wife was pregnant and we wanted to move to a bigger house with a private playground. I was afraid to take out a loan because I knew about the existence of fake trust companies that deceive people. And I started googling all sorts of mortgage companies and came across a Mortgage Broker that I trusted. Now I live in a big house, and my business is back on its feet, I'm happy.
So your mortgage broker taught you financial literacy, gave you a loan to buy a big house, and put your business back on its feet and made it profitable again?

Who is mortgage broker? Sounds like God or Buddha?

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Re: Cambodia’s growing Home Loan problem

Post by truffledog »

AronGlover wrote: Thu Feb 04, 2021 5:37 am
CEOCambodiaNews wrote: Sun Jan 19, 2020 11:27 am January 18, 2020
Cambodia’s growing Home Loan problem
Calls for more controls on developers also acting as loan arrangers

Real estate industry insiders want the central bank and the Ministry of Economy and Finance to set up policies and strengthen the law on residential project developers who act as financial institutions to provide housing loans to the customers without assessing their ability to repay them.

They say that because competition is tough in the real estate market in the Kingdom and the market is limited, some developers allow potential buyers to make installment payments on properties, especially houses, directly with the developers without asking for a down payment.

They are also offering discounts to attract customers to purchase their projects.

The fear is these strategies could hurt customers who lack financial literacy and don’t understand the obligations of repayment or the consequences of failing to meet them.

In some cases homes are repossessed and buyers lose a lot of money.

Po Eav Kong, chief executive officer (CEO) of Advance Real Estate, says that when people buy a house in a borey residential project by paying in installment to the developers, the interest rate can be higher compared with what banks and microfinance institutions offer.

He adds that the interest rate with Borey developers is from 10 percent to 20 percent per annum. However, if the customers get a home loan from a bank, the interest rate can be between 6 to 8 percent or, in some circumstances, 10 percent at most.
Full article: https://www.khmertimeskh.com/50680977/p ... home-front
I was such an inexperienced person myself. I didn't understand financial literacy either, but these guys helped me with the loan. Because of the pandemic, my business has ceased to bring me a stable profit. I was thinking of saving up and buying a house because my wife was pregnant and we wanted to move to a bigger house with a private playground. I was afraid to take out a loan because I knew about the existence of fake trust companies that deceive people. And I started googling all sorts of mortgage companies and came across a Mortgage Broker that I trusted. Now I live in a big house, and my business is back on its feet, I'm happy.
A MIRACLE HAPPENED ?

there is definitely a part of your story missing. Please share the things that made you so happy. Borrowing by itself doesnt produce any miracles.
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