if you don't plan to buy... bear with the risk that if something happens to you, your family would be left with your huge property debts, and forced sale. it is easy for someone to share with you - don't buy... but if something unfortunate happens, your friends who gave you that advice, wont be around to help you weather the storm...

my justification of why need to buy MLTA (even more so in investments), is that because you plan to buy and sell and buy again several properties... that is why you choose to buy one MLTA, which can be transferred from 1 property to another property... as well as locking in the rates at a younger age, which means cheaper premium...

one man's food, another man's poison though... depends on your preference!


cheers!

MRTA / MLTA can be waived by most banks. Ive got 2 properties under Maybank and CIMB without it and i got good rates at that time. CIMB gave me BLR-2.4% with no lock in last year. Im in the process of buying 2 properies now and most of the banks im dealing with dont have any requirement for compulsory MRTA/MLTA.

If ure buying for own stay and dont intend to sell within 5 years, then get MLTA. If ure buying for investments (as many of us are), then dont bother with either. If you do want to get, then go for MLTA not MRTA since its charged to your name and not the property thus can be used to cover many properties.

Thanks for your advice.

I am a newbie and dunno the MLTA can be transferred~ Does MLTA only applicable to one property? Let's say i buy 2nd property, do i need to buy another MLTA for it?

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Added on November 24, 2012, 10:53 amOkOk!! understood already~ Thank you

This post has been edited by orangesaw: Nov 24 2012, 10:53 AM

Hi,

Assuming you bought MLTA of RM800k for a RM800k property 1. Over 20 years, you didnt buy or sell any other property... so now loan outstanding may just be RM300k... Now you want to buy a second property of RM500k...

So it means that you can actually choose not to buy a second property, because u have adequate coverage (ie RM800k) to cover your total property debts (ie current RM300k debts + new RM500k debts).

Hope the above helps clarify!



Cheers!

Even my banker didn't explain well...

Thanks for the sharing

Yea, thanks for clarified all of us

Sorry to barge in an old thread, but I would like to get some clarification. Please bear with my queries.

I am taking a loan for 35 years. Considering the fact that the budget is already tight, I am opting for MRTA as it is cheaper than MLTA.


(1) How many years should I opt for? How to justify the number of years I should take.

(2) Seems by default the banker tell me the price/mth for MRTA, meaning they finance it under loan also resulting in more expensive. Is it commonly paid in full or serviced monthly under the loan?

For eg. they informed me the MRTA is RM16888 for 35yrs, but RM75.91/mth for 35yrs. This means RM75.91*12*35=RM31882 which is twice the amount.

(3) What is the interest rate for in buying MRTA / MLTA?

(4) Is it necessary to get either one. Can I purchase a life insurance instead of MRTA/MLTA that covers the exact loan amount instead?

(5) My understanding is, buying insurance either MRTA/MLTA is to cover me in case of death or TPD. Can I not buy any insurance and in the following scenario:

What if 1, 5 or 10 years later, Im involved and either case death / tpd and property appreciated. Can my next-of-kin sell the property and cover the remaining loan while also profit from the appreciation? The consequences is losing the house, that should be all right?

The only reason buying MRTA / MLTA is to ensure that I still own the house in case of death / tpd.


Information I referred to
http://www.imoney.my/articles/mrta-vs-mlta-need/

This post has been edited by Malformed: May 16 2014, 10:36 AM

I just want to ask can I cancel my MRTA? It's had been in force for more than 5 years. Since I have another life insurance was thinking of stopping it. My MRTA insures both my wife and me. I bought my house in 2007 and that time the bank need me to have MRTA. Thanks for the info

Yes, you may surrender MRTA anytime and get back the remaining value that still have. The surrender value should be written in your MRTA's policy.

What you need to do it just bring the MRTA's policy back to the insurance company and surrender it. To save your time, try to call up the insurance company's customer service and check with your MRTA's policy number first. Then ask where you should bring it to surrender it.

Sorry I think I mistaken my MLTA as MRTA.

Sir, thank you very much for your explanation I just check back my house HP contract from OCBC it states

The bank may finance or part finance the premium payable for the MRTA policy subject to the following condition:
a. The MRTA must be taken from an insurance company acceptable to the bank.
b. only the basic premium will be financed or part financed by the bank. If the insurance company requires a loading or en excess, you shall bear the cost of such loading or excess.
c. you must assign absolutely all rights, title and interest and benefits to the MRTA policy to the Bank with the Bank named as sole beneficiary: and
d. You must comply with the conditions required by the insurance company and the premium for the MRTA must be paid within the time stipulated in the Letter of Offer.

My MLTA is from HLA and I'm paying the premium monthly, mature date is Dec 2027 (I started since 2007) Insured amount is 104,000. But my MLTA premium is fully paid by me and the bank did not partly finance it since it was not in my loan. So if I terminate the MLTA with HLA will I breach the contract of the bank as stated above?

Or I need to call my bank 1st to ask them if my MLTA insurance is tied with the Bank?

Thank you for your time and respond really appreciated it.

This post has been edited by TitanRev: Jun 12 2014, 12:07 PM

The condition is only apply to MRTA policy, but even so, mrta can be cancel anytime. It's only let you know the condition for the finance if you finance the mrta premium.

For MLTA, the beneficiary is not the bank and given so, you are the policy owner and you are free to cancel or surrender the policy anytime too. But please check the policy have any surrender value or not before you do it.

Maybe you can pm me the product name of your MLTA that intend to cancel for more detail condition?

Thanks again sir for your expertise in this. I have gone through a discussion with my wife again and after googling on the web I found that we will can get back our paid premium after we complete the tenure of the policy. Which is still 13 years to go. But 1 thing I do not understand is I don't see any dividend being credited to my policy as that time the HL agent said if got dividend will be shared to policy holder?

For Your MLTA, there is no dividend as the policy is non participate term policy. The surrender value is guaranteed and following the value chart in the policy.

I think your agent mistake about it ady.

without MLTA/MRTA, i get BLR-2.4
with MLTA, I get BLR-2.5 (but monthly installment additional rm110)

should I purchase MLTA?

You need to check how much you need to pay for the MLTA to get a good comparison.

If the MLTA you get is over priced or you may get better coverage with same amount, then the extra 0.1% might not worth to get.

For example if you saved Rm50 from the extra 0.1% lower interest, but you pay extra Rm100 higher for the MLTA that you can get with same benefit, then in this case the 0.1% is not worth for it.

If you don't mind you may pm me the MLTA quotation you get and i can do some comparison and analysis for you to decide which is better option.

if we purchase MLTA/MRTA with bank, will it get forfeited if we refinance our property (ie to get better rate or to get lower installment) in 5-10 years?

Yes it would. That is why most of my Housing Loan clients opt for MLTA, the insurance is owned by the payer.

In MRTA, the policy is absolute assigned to the bank. You pay, but bank owns the policy, payable to your loan account. You can't do anything about it since it isn't yours anymore.

With MLTA, you can bring the policy to which ever house you want to buy using a mortgage.

This post has been edited by wild_card_my: Dec 17 2014, 05:56 PM

But my banker said even mlta also would be forfeited if we do financing within the coverage tenure. ...

oh ok. i thought if take joint mrta, if husband or wife died, i initially assumed need to pay half of the condo cost ?