Newlyweds will be able to take out a Bogeumjari loan, a government-backed mortgage, even if their combined income exceeds the program's cap, as long as one spouse earns 70 million won ($50,000) or less a year. The change is intended to remove the so-called marriage penalty, under which couples lose access to policy loans once their incomes are added together after they wed.
The Korea Housing Finance Corporation said on the 28th that it would revise the income requirements for newlywed households in this way. The new standard applies to applications filed from Oct. 19.
Currently, Bogeumjari loans are available to households with combined annual income of 70 million won or less. The threshold is higher for newlyweds: 85 million won for couples without children, 90 million won for those with one child and 100 million won for those with two or more. Newlyweds are defined as couples who registered their marriage within seven years of the loan application date or who plan to marry within three months. Children are counted as those under 19.
Under the revision, couples exceeding the combined income cap will still qualify if one spouse earns 70 million won or less a year. A childless couple earning 40 million won and 50 million won respectively, for example, cannot apply now because their combined income tops 85 million won. Once the new rules take effect, the spouse earning 40 million won can apply as the borrower.
Repayment capacity will be assessed based on the income and debt of the borrower earning 70 million won or less, rather than the couple's combined income. The corporation will still check the other spouse's income to verify preferential rates and requirements for people buying a home to live in, and will review whether the household carries other loans to repay, such as interim payment loans or jeonse (lump-sum deposit lease) loans. The number of homes owned will also be counted on a combined basis.
Bogeumjari loans apply to homes priced at 600 million won or less, with a borrowing limit of 360 million won. Households with multiple children can borrow up to 400 million won, and first-time buyers up to 420 million won.
