i am going to buy house soon, now pending to approach bank and apply for loan. so thinking to withdraw $$ from EPF 2nd account to put into the loan account to reduce the interest. but i notice the epf statement got mentoined 5.65% which is higher that the loan. should i withdraw the $$ put into loan?

and to withdraw money from EPF, can apply online need go to kwsp centre?

There is pros and cons to withdraw the money from EPF to your loan.

Pros
-reduce loan interest
-shorten the loan tenure
-reduce your monthly installment amount
-can cash out more when you need it in future by refinance or sell off
-it's one of the way to use your money in EPF before retire age

Cons
-lose more if you compare both at the end as you will earn more interest (compound interest for EPF) then you dump into the loan.
-less money in EPF when you retire

So what is your priority? Flexibility? Cash? or save interest?

Also, to withdraw money from EPF, you will need to go KWSP with your Letter Offer and S&P.

This post has been edited by onnying88: Mar 14 2010, 05:47 PM

thank you for your inputs. look like consider that the only way to withdraw money out from EPF is at this time.

i think this is better since future EPF rate is not sure will what happen. worst case it might equal or less that 4%. and also the BLR might up more than current 5.8% i think i will go approach kswp too. thanks

Good luck and all the best to you and your dream house.

Hi Jimlim007,

I've withdrawn from my EPF before when purchasing my 2nd house. Process is quite straight forward. You'll need the following documents:

1. Application form - download from EPF website
2. CTC Stamped S&P
3. Loan offer letter

I've also PM'ed you regarding home loan as well.

Hope to hear from you soon =)

Regards,
Roy

thx roy for sharing the EPF procedure . but i would like to try approach the banks loan here to see what are their best offer.

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Added on March 14, 2010, 8:32 pmthank you onnying88

This post has been edited by jimlim007: Mar 14 2010, 08:32 PM

Hi Jimlim007,

I'm actually with Mortgage Broker. Because I represent many banks/insurance companies, I provide independent advice on the pros and cons of a wide range of different bank loan packages offered.

My service is absolutely free to the customer and will save you time and hassle by applying to all those banks for you at one go.

Are you buying for investment or for own stay? May I know where the house is located?

PM me your contact details or just email/SMS/call me, will help you get the best package.

Hope to hear from you as soon as possible as some of the packages may be revised upwards soon due to the recent BLR increase.

Regards,

good comments.

hi all sifus,
is it possible to ask epf to transfer directly into a personal account so i could use it instead of going through refinance to access the epf money?

thanks

This post has been edited by mouldybread: Mar 15 2010, 01:19 PM

Yes, it is possible to transfer to personal account.
As long as you have the 3 document they required.

There are a few panel bank... you could check in the website or give them a call.

can i withdraw epf if buying 2nd hand house...that means the existing hse or have to put 10% first then only can withdraw?

As long the in S&P have your name, you can apply to withdraw. New or 2nd hand house doesn't matter.

get advice from my colleague before on this matter... (she been buy & sell house few times)

she said is better to withdraw EPF to repay for house coz the interest rates and inflation too...

But Do bare in mind that EPF Account II is for our retirement funds and etc

So if we have the option to not to use those funds. I recommend don't touch it.

i've already withdrawn once time before from Account II for my housing loan five year ago, now i want to withdraw again for the same loan, what is the procedure and document required ? thank you

Use it only if you put the funds in something with much better returns than EPF and you have the discipline to reinvest those returns into your retirement.

You sure we can withdraw second time for same property?

I believe so. Can withdraw unlimited times for each property, but only for 2 properties. Withdrawal for 2nd property can only be done after you've disposed off the 1st property.

5.65% vs 4%, why you still need to think? Of cause let the EPF money stay there until the BLR raise till 8.05% then only take it out to settle loan la.

I said "Use it only if you put the funds in something with much better RETURNS than EPF". RETURNS = investment, not to offset cost of funds for the house you're living in that does not generate any RETURNS

Example:
Take out RM100k to buy a medium cost apartment costing RM85k, legal fee RM3k and spend RM12k for reno and bare furnishing.

Rent out for RM650 per month, assume RM50 as monthly cost, net rental = RM600 per month, RM7200 per year. ROI = 7.2%

100k apartment that can rent out at rm650 is very hard to find and bare in mind that EPF could only be withdraw for the 2nd property only if the 1st property is sold. If you rent out the 1st property than you can not withdraw it for the 2nd property when the BLR hikes above EPF return rate.

This post has been edited by jarjar6666: Mar 16 2010, 10:04 PM

Hard to find does not mean cannot find.

Up to each individual to decide how they want to manage their retirement. The apartment will continue to provide steady income to the retiree after retirement whereas according to EPF study, most people finish their entire EPF savings within 5-10 years.

my situation is i have rented out my 1st property and now staying in 2nd property. however i have not taken any epf out before, can i still proceed to take out using the 2nd property as i am staying in there and that this is my first time? or do i have to use the 1st property to take out?

thanks

You can take out for your 2nd property as long as you never take it out before. But why you wanna settle the loan giving the interest rate is 4% and you get more return from epf? Why not wait until the blr increase more since you can take it out anytime?

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Added on March 16, 2010, 11:31 pmMy rationalization is based on the comparision of taking out to settle loan and let it stay in epf which is 4% vs 5.65%, not comparing with taking it and invest in other areas. With refering to the EPF study, the generation participate in the study which is already >55 now is different then the generation of which most of us belongs to. Most of the people in that generation still does not have much knowledge about planning for the retirement, and whether those that used their epf to invest in stock market, property or business fall inside the category of 'finish their epf' has not been clarified. I don't think the conclusion of the study will valid in 20 years ahead which is the turn of my generation to withdraw the epf.

This post has been edited by jarjar6666: Mar 16 2010, 11:31 PM

oh, i am not settling the loan. i want to put it into a personal account then use it for another new property. i dont think i can take it out if it is more than 3 years from the spa for them to be able to bank in directly into a personal account.
correct me if wrong

Ya, you only can get the money into your personal account for the 1st time.

If i already settle my 1st property without using any withdrawal from EPF, can I withdraw from EPF for my second property from Account 2 without selling my 1st property ??

Yes, you could. As long as you never withdraw before will be fine.

Is it true that we are only allowed to withdraw fr Acount II (no matter how many times) within 3 years from the date of our S&P ?

i am no expert, however from my understanding if you want to withdraw it into a personal account to use directly, it has to be within 3 years from s&p and that it also has to be your first withdrawal. on the other hand, if you withdraw from account 2 and use it to reduce the principle only then there is no time limit. of course the advantages of having the money in the personal account outweigh having it to reduce the principle directly.

2cents