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Jeonse-Deposit Loan Banned for High-Priced Homeowners Starting Jan. 20

Write: 2020-01-16 17:07:53Update: 2020-01-16 17:21:13

Jeonse-Deposit Loan Banned for High-Priced Homeowners Starting Jan. 20

Photo : YONHAP News

Starting on January 20th, owners of homes worth more than 900 million won will be banned from taking out loans with their jeonse deposit as collateral.

The Financial Services Commission and the Land Ministry on Thursday laid out a detailed plan for the government's jeonse-deposit loan regulations announced last month as part of efforts to stabilize the real estate market.

Jeonse is a type of lease in South Korea where a tenant puts down a lump-sum deposit and the landlord returns it when the tenant moves out.

Owners of the high-priced homes who have taken out a loan from Seoul Guarantee Insurance with their jeonse deposit prior to January 20th will be able to extend their loans.

However, they will eventually be subject to the ban when moving out of their jeonse home or seeking to increase loans.

The move aims to put the brakes on the so-called "gap investors" who take out loans on their jeonse deposits to purchase high-priced homes occupied by tenants under jeonse contracts.

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