QUOTE(Julie28 @ Sep 6 2011, 03:05 PM)
Anyone can give some advice here?
Me & hubby bought an intermediate house at Klang Valley area which costs RM600,000. Loan is around RM500,000. It's expensive because it's really near to Shah Alam industrial area.
Monthly payment around RM2500 (not started yet). I saja2 calculate the loan interest using a calculator & the total interest for 30 yrs loan is RM380,000++.
I plan to sell back the house & buy cheaper house (dunno if there are cheaper houses around Klang Valley area). Or anyone have better idea? The interest is huuuuuge. We can afford the monthly payment but I'm looking forward to other smarter way so that we can get away from paying huge interest.
From your comments, i assume that you are only concerned by the fact that you are paying HIGH INTEREST on mortgage.
- Not that you cannot afford to pay monthly installment
- Not that you want to make other investment
- Not to make savings
- BUT = To get away from paying huge interestHigh Interest on Mortgage
What you pointed out is TRUE! The interest of 500k loan for 30 years tenure is 380k.
- Given BLR = 6.6 and your mortgage is blr-2.4, which makes it 4.2% annually)
- Current bank lock-in period is 3 years for early settlement and 5 years for refinancing (3% penalty)
But do you realize how many people out there paying these kind of interest? Everyone!
Do you think that all these people haven't give it a thought? But why? Property Market
Property price will not go down. All my projects 20x70 all above 600k.
My team over the years are covering projects further and further away from klang valley.
Take area in in Kajang, Sri Petaling, Seri Kembangan, Nilai. Still 20x70 got 400k.
Whereas, most of my sub-sale loan above 1mil.
All client top-up due to the fact <MV.
We are transitioning from developing country to developed country.
Property price go up (Singapore).
Slowly even FD rates will be reduced (Singapore).
Banks will charge you for depositing $$ in (Japan).
My own pools of investor thinks that investing in UK is better. True.
Half of my real estate agents are selling foreign properties (loan under OCBC and Maybank).Proposed Solution
1. Do not sell off your house.
2. Want to buy house, buy under-construction (near proposed MRT station).
3. Saving interest on mortgage - use flexi home loan.
Let's ponder this deeply, you are looking forward to other smarter way so that you can get away from paying huge interest.
But is selling the house is the smart move? Yes less interest because less value. The amount of interest you pay is corresponding to the value and yes it worthwhile because the value will only increase. Unless the MV in the area is below par. Rawang, Sepang, etc.
Flexi home loan = 1 home loan account + 1 flexi account.
Interest Rate = Amount of Outstanding Loan - Total $$$ in flexi account.
Total deposit payment = 29k
From there = 20k is to interest and 9k to principal
Thus 2nd year Outstanding balance is 500k-9k.
First few years mostly go to interest. Harsh fact. All banks. Same thing.
However with flexi. Say you got 100k for 30 years in flexi.
Interest rate = (500-100) x 4.2% [You save 185k in 30 years]
How much have you save?
Don't have 100k? Just save more every month.
Your monthly deposit = 2.5, if you save 500/monthly for 1st year only already saved 14k.
Finally, bank charge you annually 4.2% on mortgage. If you got $$ will you deposit in flexi account @ into FD (with 3.5 interest)?
Flexi account = your current account (got ATM, cheque book, monthly statement) but if offset your loan interest.
Again is selling you house is a smart move?
People in working class only thinks about saving $$$.
Not making more $$$.
House = asset if it yields return through rental @ investment
House = liability if you live in itThis post has been edited by Gyokumen_Koushu: Oct 7 2011, 06:24 PM