I just got my Offer Letter for refinancing my aprt and the one about a RM1k fee got me sitting up. Are the conditions normal for other banks too ? I am w0ndering if I should take up the offer.

1. The new rate given is BLR - 1.85%

2. If i default on my instalment for 3 mths, bank can charge me BLR + 2.25%. 'Additional interest at the rate of 1% pa or such other rates as may be prescribed by the bank from time to time at its absolute descretion, to be calculated on daily rests..'

I underlined 'or such other rates'. This sounds scary. What if the bank says 10% ? Can they do that ?

3. 'The new instalment amount shall be RMxxx per month commencing 2 months from acceptance date or earlier'

4. Bonding period 6yrs. The current loan bond is 5yrs.

5. If i prepay more than 50% of loan, there will be a fee of 3%. In addition, there is 'an administration fee of RM1,500 or such other amount as the bank may at its sole and absolute discretion prescribe.. in the event that the facility is to be prepaid by refinancing..'

Meaning there is charge of $1.5k if i refinance within 6 yrs ? I underlined 'or such other amount' - this means bank can change the amount & charge higher and i cant protest ?

6. 'All amounts redrawn shall form part of the principal......... and shall be subject to the interest rate applicable for the housing loan'

Is this ok ?

7. 'A fee of RM1,000 is to be debited to your housing loan accunt upon acceptance..'

This clause really sounds unfair to me. They still charge higher % than if i refinance with other bank, yet still charge me $1k. Do other banks do same thing ?

8. 'The bank reserves the right to increase the prevailing interest rate to at least the bank's blr, in the event the difference between the banks blr and overnight policy rate declines to below 2%'

Really don't understand this.. sounds fishy.

I want to save some $ in these times cos my job allowance cut but dun wan to rush into it if other banks don't do the things they impose. Did i get a good deal ?

I really appreciate if anyone already done refinancing can give me some tips. Thanks ..

[quote=mrPOTATO,Apr 27 2009, 06:02 PM]
I just got my Offer Letter for refinancing my aprt and the one about a RM1k fee got me sitting up. Are the conditions normal for other banks too ? I am w0ndering if I should take up the offer.

RM1k fee is for what? valuation fee? you take ZEC or NZEC ?

1. The new rate given is BLR - 1.85%

Depend on your loan amount. BLR-1.85 is ok ok only. Should get BLR-2% in current market.

2. If i default on my instalment for 3 mths, bank can charge me BLR + 2.25%. 'Additional interest at the rate of 1% pa or such other rates as may be prescribed by the bank from time to time at its absolute descretion, to be calculated on daily rests..'

This is normal, some bank even charge BLR+4%
As long you pay in time and dun give trouble to bank, bank wouldn't give trouble to you too.

I underlined 'or such other rates'. This sounds scary. What if the bank says 10% ? Can they do that ?

Yes, they can do that if the LO written so.


3. 'The new instalment amount shall be RMxxx per month commencing 2 months from acceptance date or earlier'

What's the problem here?

4. Bonding period 6yrs. The current loan bond is 5yrs.

Is this from EON bank? if yes then i think i know the 1k fee is what already. It's the addittion legal fee you have to pay, because EON bank only pay 1.5% of the loan amount as the legal fee, the rest you need to pay yourself.

5. If i prepay more than 50% of loan, there will be a fee of 3%. In addition, there is 'an administration fee of RM1,500 or such other amount as the bank may at its sole and absolute discretion prescribe.. in the event that the facility is to be prepaid by refinancing..'

50% prepay then charge 3% alreadym totally not fair at all.
The admin fee some bank will add in when counting the total penalty fee. still acceptable

Meaning there is charge of $1.5k if i refinance within 6 yrs ? I underlined 'or such other amount' - this means bank can change the amount & charge higher and i cant protest ?

i believe it's mean 3% penalty + RM1.5k = your total penalty amount

6. 'All amounts redrawn shall form part of the principal......... and shall be subject to the interest rate applicable for the housing loan'

Is this ok ? Yup, it's normal

7. 'A fee of RM1,000 is to be debited to your housing loan accunt upon acceptance..'

What fee is this? ask the bank state clearly

This clause really sounds unfair to me. They still charge higher % than if i refinance with other bank, yet still charge me $1k. Do other banks do same thing ?

Never heard so, no idea what fee is this

8. 'The bank reserves the right to increase the prevailing interest rate to at least the bank's blr, in the event the difference between the banks blr and overnight policy rate declines to below 2%'
Really don't understand this.. sounds fishy.

AGREE

I want to save some $ in these times cos my job allowance cut but dun wan to rush into it if other banks don't do the things they impose. Did i get a good deal ?

Personally, i dont think it's a good deal. Too many unknow fee.

Maybe i can give you a help for better offer if you need.

Thx onnying & ed0gawa for your advice, really appreciate that. I guess the feedback from you all not that encouraging ya. Some more service not as good as i expected, they took 2 weeks to come back to me. Even if i apply new loan 1 week also can get feedback already.

Ya, i m refinancing wit same bank. Got feeling they purposely drag their feet so i con't to pay the old interest as long as possible. Thx a lot for your explanation on the opr thing. Your the expert

About 3. 'The new instalment amount shall be RMxxx per month commencing 2 months from acceptance date or earlier', shouldn't the new instalment commence immediately ? Sounds like they want to charge me another 2 mths old interest even if i take new offer. Celaka.

The bank is uob. Very foxy & give me bad feeling cos so many conditions they say 'or such other bla bla..'. Lose confidence with them already. Saw them yesterday and ask them call back for explanation also no call.

Onnying, yes please let me know if you have a better offer ya. I rEally appreciate that.

basically u'r d borrower dey r lender. tey reserve all d right to change curent interest rate to b least equivalent to blr means ur LO stated offer is vulnerable. but as to b seem within 2-5year offers wil continue n not rebounce.
as for u'r in crisis anytin can b execute by lender.
default possibilitty : BLR increase prepayment insufficient / late 1 day / lack 1 cent / lender n borrewer did not recognize execution date..etc...
remember any new offer or promo they r earning interest it's their biz nature. money creation
u need to understand more bout mortgage loan structure.
1st concern which year n which partial are u in. *as u know u pay high sum of interest ,final year high sum of principal*
refinance = new loan = new structure = back to square 1
2nd offers only get better n better when u can stop?
*certain / most early tenure LO / none performing r encourage to do so.*

client main concern is :
settle d loan asap
less interst payable not *verbal or shown only to future analyze*
correct ammount to pay every month *fact is ur monthly payment is inproper but convinient*
etc... so on..

u'r welcome to ask me more FOC.

we audit selected possible schedule for clients.
legally issued wit agreement.

u can msn me cansas_99@hotmail.com

If I refinance using the same bank. Is there any legal fees involved?
I'm currently having UOB loan, now want to refinance the same bank but better rate. So I want to know what is the expenses involved?