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Housing loan checklist: Non-standard documents you need to know


Applying for a housing loan is a lengthy process for a self-employed or freelancer in Malaysia. However, it doesn’t necessarily mean it’s difficult, especially when you have all the non-standard documents ready!

housing loan documents checklist malaysia
© seventyfour74/ 123RF

When it comes to personal finance, most freelancers in Malaysia might begrudge their civil servant friends and families. We all know how easy it is for them to get a loan. For those of us without regular employment, filing our taxes, getting insurance, and applying for a home loan is a lengthy process. However, being a lengthier process doesn’t necessarily mean it’s difficult. If you are well-prepared and have all the non-standard documents ready, you are well on your way to owning your first home.

Can I get a home loan without property documents?

It is impossible to get a housing loan without proof of income as your income stability and repayment capability aren’t guaranteed. If you are a civil servant, regular-employed, or salaried person, preparing the documents required for a home loan application is fairly easy. However, someone who is self-employed may not have the same basic documents.

Here are a few examples of jobs that fall under the self-employed category:

  • Hawkers, daily wage workers, online traders
  • Gig economy workers (Grab, Foodpanda, Lalamove)
  • Personal tutors
  • Event organisers
  • Freelancers (photographers, designers, writers, fitness trainers, etc.)
  • Authors
  • Musicians
  • Small entrepreneurs

When you fall under the category above, you can still get a home loan. However, the self-employed documents for a home loan are slightly different.

READ: Top 5 most populous states in Malaysia 2021

What documents are required for home loan approval

Below are the standard documents a person needs to submit to ensure a smooth housing loan application process:

  • Payslips

One of the most important documents in proving a person’s home loan.

  • Employees’ Provident Fund (EPF) statements

A great way to prove the level and stability of your income.

  • Bank statements

Proof that you are indeed being paid your salary.

  • Copy of MyKad

Required for almost any housing loan application as a Malaysian citizen.

As you might see, a self-employed person might have problems providing the first two documents on the list above. This is why a housing loan for the self-employed in Malaysia requires some non-standard documents for approval.

Housing loan documents checklist Malaysia: 7 non-standard documents required for home loan application

What documents are required for home loan approval
© kenishirotie/ 123RF

Unlike salaried people, self-employed do not have a regular payslip. Banks will review your financial stability before approving your housing loan application. As a self-employed person, banks may perceive your income as ‘unpredictable’ when it to comes to committing to the monthly repayments. However, here are 7 non-standard documents you can provide to prove your income and financial health:

1. Business registration

This is an important document to have, even if your business is small or you are a one-person freelancer. Having a registered business boosts your client’s confidence in dealing with you, and it appears more professional too. Furthermore, the date of registration will be considered very important to the bank. It will justify the sustainability of the business.

2. Business profile

This is important so that banks can identify the nature of your business. Even a simple website or official Facebook, Instagram, or LinkedIn page will be sufficient.

3. Financial records of past years’ income, tax return statement, balance sheet

You have a higher chance of getting your housing loan application approved if you can provide an organised financial record of previous years’ income, tax return, profit and loss statement, and balance sheet.

Here’s a simple checklist of what you can do:

  • Make sure that your business is registered with the Companies Commission Of Malaysia/ Suruhanjaya Syarikat Malaysia (SSM)
  • Keep all statements, documents, and licenses related to your business
  • Label all folders according to the latest dates or assessment year. This will make it easier for you to provide proof of income when asked by the bank.

4. Income tax statements

A lot of the self-employed or freelancers in Malaysia may not declare their earnings to the Inland Revenue Board of Malaysia (IRBM) or LHDN. However, having the last three years of your income tax statements on record goes a long way in helping you get your home loan approved.

If you are required to pay income tax, it normally means your annual earning exceeds RM34,000 (after EPF deduction) or you earn income from a business (through gains or business profits). This is the sort of income stability that banks prefer to see.

5. Bank statements

For regular-employed applicants, bank statements serve as proof that they are indeed being paid their salary. For those who are self-employed or are freelancers in Malaysia, bank statements show that actual business income and profit are generated.

6. Savings

From the banks’ perspective, savings are the best way to justify and show your steady stream of income, which leads to your accumulated savings. If you are unable to show your savings record, it’ll be hard to justify the stability of your business.

7. Credit score report

Banks or financial institutions in Malaysia have their own method of evaluating your credit score. As credit score indicates a consumer’s credit risk, banks will refer to two popular credit reports, CCRIS and CTOS to assist their evaluation. A good credit score will make you a more attractive candidate for a loan. With a good credit score, you can get better home loan interest rates and even quicker loan approval.

Other tricks that can help you get a home loan

self-employed documents for home loan
© Zuraisham/ gettyimages

The following can also help you get housing loan approval:

1. Get a guarantor

A credible guarantor must be someone who has a strong financial background. It can be anyone; your family members, relatives, and even close friends. This person will be evaluated based on his or her income stability, employment background, as well as a credit score to minimise risks and liabilities as a self-employed person.

2. Apply for a home loan with banks that lend to self-employed borrowers

Banks are very ‘picky’ when approving an application. Before applying for a housing loan, take your time to research banks that approve loans for self-employed individuals and find out the interest rate on house loans for each bank. Here are some of the banks that offer home financing for self-employed applicants:

  • CIMB Property Financing
  • Bank Rakyat Home Financing-I
  • HSBC Ideal Home Plan

3. Housing Credit Guarantee Scheme (HCGC)

During the tabling of Budget 2022, the Government has allocated RM2 billion under the Housing Credit Guarantee Scheme (HCGC). This was to help those without proof of fixed income. The Government is cognisant of the challenges facing gig workers, small business owners, and farmers in getting a housing loan.

In reality, many of these individuals have the capacity to repay their loans but without documents proving fixed income, the process of applying for a home loan is difficult. This initiative will not only benefit potential house buyers but also accelerate the growth of the local property market. So far, BSN MyHome (Program Perumahan Rakyat) 2021 is one of the housing schemes.

READ: List of legal documents required when buying a house in Malaysia

Edited by Rebecca Hani Romeli

Disclaimer: The information is provided for general information only. Malaysia Sdn Bhd makes no representations or warranties in relation to the information, including but not limited to any representation or warranty as to the fitness for any particular purpose of the information to the fullest extent permitted by law. While every effort has been made to ensure that the information provided in this article is accurate, reliable, and complete as of the time of writing, the information provided in this article should not be relied upon to make any financial, investment, real estate or legal decisions. Additionally, the information should not substitute advice from a trained professional who can take into account your personal facts and circumstances, and we accept no liability if you use the information to form decisions.

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