hi,

I am in the early 40, reccently face some dilema on which loan need to setter first on my home loan?

Loan A-
Balance around 190k, mthly instalment RM1600, left 12 years +, currently tenant out for kindergarden purpose, so every month generate rental income of RM1200 to cover the instalment, balance need to top up around RM400.

Loan B-

Existing house stay by me, balance around 30k, monthly instalment RM768, left 3 years+

My question is, in coming Feb/March, i will have some cash to come in result from sold off an old house, but i doesn 't quite clear which one need to setter off first.

Let say i have 70k to clear off the instalment. In my plan 1, i willl pay-off the Loan B(30k), and pay off 40 k for loan A because after all i need not to pay the instalment any more, but the cons is that the bal interest charge was not that much , is around 2-3k, On alternatively, i come out with plan 2, pay back 70k for loan A, and it will reduce the interest drastically, and reduce the tenure as well, but the cons is that i need continue to serve the instalment for loan B.

Plan 1- clear-off loan B, have more COH
Plan 2 -reduce the amount of loan A, less COH, but reduce interest charge in long term.

Need some advise on Personal finance on above matter, which plan i need to use in order to get better return on personal management /investment, especially under current uncertainty economy?

This post has been edited by youngman28: Jan 12 2012, 12:51 PM

1-2, Loan A, Pb Home Loan, Int= BLR-2.2, just re-finance last year
Loan B. AIA Fixed Term Home Loan, Int=6.15%

3 , Had been actively in equity market before, had quit couple of year, currently hold nothing on hand. Interest in REIT, had some investment in unit trust ( thro EPF), currently used FD, Unit Trust and GIA as investment tools.

Just some personal opinion sharing here, no "right or wrong", merely individual choices.

If yrs mom or wife can do 1 or 2 home cook/day, the cost for a good home cook meal is arround RM15/day, further more the drink use to be FOC, not like eating in a restaurant, all drink will be chargeble eg, RM3.50 for a orange juice, 4 person will be RM14.00 +ST, A typical person will look at the pricelist for the food, while not realise the small item like drinks. Let assume not all call orange juice, a typical bill for drink for a night out will be around RM10.00. One month can easily save you RM300.00.

A good pratice will be doing own cook on weekday, and have a family gathering like once a week at restaurent, thus the cost will be RM40X4, around RM200/month.

On travel to somewhere else cost/expenses., nowayday with AA, you can get pretty cheap airfare provide you plan ahead 6-9 months, and try not doing on ad-hoc basic, the expenses will make yours wallet light alot especially travel with family member.

This post has been edited by youngman28: Mar 15 2012, 03:34 PM

WMK,

Reccently , just go through yrs notes on Asset Allocation, but i have some problem to identify the Investment in Properties, eg, i have 2 house, one for own stay, one for investment. Thus, for own stay not consider a asset.

The one for investment, i pay 10% down patment, , house price 260k, down payment 10%, have own the house for about 8-9 years, currently stil on instalment monthly, but have rent out for kinder garden purpose. (rental Rm1,200/mth) while instalment Rm1,600/mth , balance about 180k, Current market price around 600k.

For the case about, what value shall i use to estimate the value of this properties?. Afterthat i can do my Asset Allocation more precisely.

Btw, may i known what the differrent between Bonds and bond fund?

This post has been edited by youngman28: Apr 10 2012, 03:21 PM

Well, is a DST FH landed properties endlot with extra land , c/w individual title. It located on boader of KV, thatwise still very cheap 8-9 year ago. RM600k shall be median price.

Btw, you said that "house not generate cash flow" is not consider a Investment Asset, so we shouldn't take it into Asset Allocation?

But, my thought is althrough in short to medium term, i need to fork out some money to top up the different. In long term, once i finish the instalment, the Investment Asset will give me subtantial amount of ROI ( saving and profit due to appreciation)

This post has been edited by youngman28: Apr 10 2012, 06:08 PM

MK,

Maybe i mis-lead you. I have 2 properties, one is for own stay ( which is fully paid), anothers one is that i mention here. The one for own stay, i not consider it as investment. What i refer is another house which i currently held.

This post has been edited by youngman28: Apr 10 2012, 06:55 PM

Absolutely right decision, by puttting in flexi-morgate, the interest for yrs hse might cut to haft

Btw, which field you are in, working on second year can get 4.4k pay, it oustanding?

Brother,

Buying a first house for fresh graduate is consider a wise choice, since house is consider an asset , and you need some roof for yrs living. Try to get a house that you can affort comfortably to pay the instalment every month. The property market was at the peak at the moment, dun be too rush to get a property, try to walk in to more house launching and familiar with what type of property offer in the market, see the real shown house and etc. When they is an opportunity arise, just grab it.

For fresh graduate, buying a new car cost almost double yrs annual income is not a wise choice, you end up burden with the car instalment and please remember never to take loan > 5 year. For my experinces owning a few local car at the initial age, the experiences told me Proton car althrough buy in cheap, but the resale value also drop like hell after 5 year, the more important aspect like safety features was missing in lower end local car. Another aspect you need to consider is proton car tend to give you bad NVH after 2-3 year ownnership. If you want new and shining car at initial 1-2 years, Proton is yrs choice.

Since you are working on Island, and yrs family in Ipoh, and the distance i can say is not that far away. The better option is to buy a Japanese used car like T , H or N, car age allow 5-6 year, the car price have dropped almost haft the value, the cost between 45-55k, more important is the car depreciation will be lower, low spare part cost, easy to maintenance, less insurance cost, less worry on theive issue and much better car insulation and NVH, even after 10 year of ownership. This range of car used to be equiped with safety feasture like ABS, airbag, VSC, BA etc. For personal matter, owning a Japanese used car , not look poor for me.

Hope this help.

I am assume that he is buying a house in Penang Island and the house in good location, and advise him to take time to search and experiences what the strategic house he is looking for. The abundance house most like will be in out skirt of the town like Rawang, or far away from Bukit Matajam. etc.

good advise