I can help as a mortgage broker too. There are 4 banks under our panel for the convenience of the buyer. Namely MBB, HongLeong, Ambank, and OCBC

Hello, I can't speak for about the loan account without reading the letter offer, but I can comment on the google search that you found: http://www.investordictionary.com/definiti...der-of-maturity

"When payments are received from borrowers that are larger than the authorized repayment schedules, the overpayment is credited to the final installments of the principal, which reduces the maturity of the loan and does not affect the original repayment schedule"

1. This simply means that any advance payments (or overpayment in this context) made will not be used to reduce your capital/loans-outstanding. The "overpayment" will be used instead to reduce the final installment of your loan, which is made upon the maturity of your loan.

2. So let's say your loan installment is RM700 a month, and the final installment is RM340, the "overpayment" would be used to reduce the RM340 to something lower.

3. As such, the "overpayment" does NOT affect affect the original repayment schedule; i.e Following the example above, if you are scheduled to pay off your loan in 360 months, by putting RM70,000 into the account, you are simply deducting 100 months from the total date of maturity (which is 360 months). This is the OPPPOSITE of a FLEXI loan facility, whereby if you were to put RM70,000 into the loan account, your loans-outstanding is reduced, thus you pay less total interest (because interest is calculated based on the loans-outstanding), and your repayment schedule is shortened (you pay less number of installments)

tl;dr: Based on the definition, the loan account has no FLEXI facility at all, even if you pay extra each month, you are just pissing your money away. Better put the money in unit trust or other investment accounts and pay your loan according to the schedule.

This post has been edited by wild_card_my: Jul 1 2015, 11:42 PM

Thank you for your updates, we now know more about the bank's back-end operations.

When there is a lock-in in your loan agreement, it's not that there isn't any chance to refinance to a different bank within that period, only that you need to pay the penalty for doing that, usually 2 to 3% of the outstanding loan amount OR the original loan amount.

But to answer your question, yes, you can talk to your bank to refinance or top-up, either to original loan amount, or to an amount equals to 90% of the new and increased price of the property. If you negotiate right, and depending on the bank, you can avoid paying the penalty, however, usually the lock-in period would reset itself back to 3 or 5 years, depending on the bank.

Hope that helps!

Younger age,

When customers apply through me for Maybank, I always recommend Homeequity-i instead. It is the one most closely resemble a conventional loan, but with Islamic principles of course. It is in essence a buy-and-lease contract, as you stay in the property you pay rent to the bank that owns a larger share of the property. At the same time, you buy back the banks' share. Rate is between 4.4 to 4.6% depending on credit profile, loan amount, project/subsale.

With Home equity-i you can still dump the money into the account and it will still reduce the capital thus reducing your daily chargable interest. Eligibility is the same, DSR the same too.

Actually, it is best NOT to use the lawyer recommended by the agent BECAUSE of the conflict of interests between you, the buyer, and the agent, who is the representative of the seller.

Your SPA lawyer represents you VS the seller.

Your LA lawyer represent the bank against you (although you are the one paying for it)

Here is my piece on it: FM's Mortgage Series Ep.2, SPA & LA

Now, here's the problem. When the owner uses the same lawyer as yourself, and there is a problem between you and the owner (e,g, dispute between you and the owner/agent about misselling, or dispute on the late disbursement of fees, the penalty levied and the parties involved in paying and receiving the penalty), how would the SPA lawyer (Who is your lawyer) able to resolve the conflict while prioritizing your interest at 100%? He's already representing both the seller and the buyer (you), which side will he take?

Most of the time, the seller can choose not to be represented by any lawyer, and when they do, they would already have their own lawyer to go through the documents.

Bottom line is, choose your own lawyer, try not to be swayed by the agent's sweet talk because you want a lawyer who fight for YOUR INTEREST and not the agent's interest.

LA lawyer will do their best to be fair, but they are representing the bank in the way that the Loan Agreements are drafted based on the Letter of Advice sent by the bank. If they refuse they will simply be pulled away from the list of panel lawyers. You have not much choice in the LA lawyers since for most banks, you need to use their Panel lawyer or Ad-hoc approved lawyers.

But take it this way, there is a reason why some of the lawyers are paneled and others are not. Remember when I said not all lawyers are the same? The ones who are paneled are more likely to have already been vetted by the banks. Some of the bigger law firms are panels to more than 10 banks, as claimed by their lawyers (I can't verify this since I only submit my cases to about 5 banks or so)

This post has been edited by wild_card_my: Oct 8 2015, 09:35 AM

You can always change but depending on the stage of the process, you may need to pay fees to the lawyer. Once Ive had a client who had to back out from the auction purchase due to a POA issue by the vendor. He had to pay some documentation fees to the lawyer.

At what stage is your purchase and loan process now?

Hahaha then you are good to go. You can tell the agent that you want your own lawyer to represent you for the SPA. I recommend you some as an non-interested party (not involved with the transaction) or you can find your friends and them for good lawyers that have represented you.

The SPA lawyers only need half-a-day to draft an SPA, as long as they can get the old SPA and title (if any) from the current owner

Don't worry about those, any competent lawyer will have their representative to contact the owner for the documents.

This is right, I can vouch for this opinion.

It would be easier to use the lawyers with branches in the same area of the property you are purchasing, as the law firms will have to deal with the localities of the area and will probably have to send in their runners to travel far away.

1 .Typically, if you are planning to clear off the loan in a short amount of time, it may be better to use ZMC even though the rates are higher. The calculations are more complicated than this, but here's an illustration:

RM11k is only 1.88% of RM585k.

Per annum, the interest charged on your ZMC moving cost is 0.3% higher than non-ZMC. 1.88% / 0.3% = 6.27 years. Based on a gross calculation, you would avoid a loss if you maintain your ZMC for only 6.27 years. If you stick with the loan any longer than that then you are already losing out due to the higher interest that you would have to pay.

2. Onto your second question, the banks will calculate the installment for the financing of your current outstanding based on 35 year tenure; and then they will calculate the installment for the cash-out portion based on 10 year tenure.

They would then, add these 2 up, along with all your current installments with other banks, and compare it to your nett income. If you pass the DSR test, and have your loan approved, (this applies for certain banks like OCBC, AlRajhi, Alliance, and HLBB only) your installment for the cash-out portion will be based on the 35 year tenure.

You can read more about some mortgage topics here:

FM's Mortgage Series Ep.1, Debt-service ratio (DSR)
FF's Mortgage Series Ep.2, SPA & LA

This post has been edited by wild_card_my: Oct 8 2015, 11:31 PM

Typically, the banks are offering up to 90% MOF of the property value for refinancing.

90% * RM480 = RM432k

With your outstanding of RM230k, you are poised to get about RM202k cash in hand.. For a few banks, you can even finance the entry cost on top of the loans, saving you from paying the legal fees out of pocket (it is financed though, so you would still need to pay it back)

For refinancing cases, it may take between 2 to 3 months from the signing of the loan Letter Offer (LO) to the full disbursement of the loan to the previous banks and yourself.

2 years was long, have you asked the lawyer what caused the delays. But there are many factors that may contribute to the delays:

1. State consent
2. Developer delayed in giving the release letter
3. Land office issues
4. Delays by vendors banks/FI to give the settlement amount

When you are signing your Legal Agreement (LA) you will have to meet their legal representative or go to their office anyway. Hence it would be a good idead to find a lawyer that is close to you, although my advice is to use the lawyer near the place of the property to reduce their traveling costs (Which will be passed to you) and they are more familiar with the local laws and by laws.


Ive written a few things about choosing your lawyers here: https://forum.lowyat.net/index.php?showtopic=3736435&hl=

They are not allowed to give discounts, as per BAR rules, but even if they do, Ive heard of figures ranging form 20 to 40%

Keep in mind that those figures are simply the professional fees, and not the total legal fees that you are expected to pay. For the most accurate figure, you can get a quotation from the lawyers. For example, a particular bank would finance up to RM10,402 as your legal fees, of which you may need to top up, depending on the types, title, and location of the property

Not at all!

Banks like HLBB, OCBC, Al Rajhi, CIMB, RHB, and more can all refinance based on this third party setup!

So the S&P has 2 names (A & B) and the person who will take the loan is A? No problem at all. Let me know if you need help with the process!

Bonus:



This post has been edited by wild_card_my: Oct 12 2015, 05:20 PM

Is it an Islamic loan? If it is and were taken in the past few years, then chances are there isnt any lock-in periods. And if there is a lock in period it will be stated in the first few pages of the LO, it will be obvious. All of my Islamic financing LO do not talk about lock in, and there isnt any.

There are a few lawyers on hand that I have worked with that have not received any complaints from any of my customers. PJ and KL based.

You may be able to negotiate with them but chances are they would prefer that the fees be paid before they can start their work.

The easiest method to counter this is to include the legal, valuation, and stamp duty (LVS) into the loan account. Which means if your margin of financing is 90%, the LVS will be about 2% on top of the 90%. Making your loan amount to be 92%.

I can't say for sure if it is Islamic unless I look at the letter offer (LO). If you don't mind you can send the LO to my email posted below.

There will be discounts on the stamp duty (of the loan agreement) when you refinance from conventional to Islamic loans. The stamp duty is calculated at 0.5% of the loan amount.

Hello Piggyzai,

1. As for the property that your father put your name onto, NO, it will not be considered as part of your commitment. Only the loan applicants (most probably your dad) will have this loan record updated into their CCRIS.

2. Not necessarily tight. People who do not understand how it works may claim that it is harder than it was before, which may be true. But the rules are CLEAR - DSR limits, commitment calculations, margin of finance (MOF), etc are all known to experienced mortgage advisors. So my recommendation is to find the right people to work with when applying for your mortgages - experience and dedication are key. I volunteer myself

3. Look at the calculation below, you are good to go even for single application. This is based on 85% maximum DSR by HLBB, inclusive of all your commitments and income. However, loan approval is subject to your credit records (CCRIS, CTOS) and credit controller's approval. Your GF by default cannot get 85% DSR, however, when combined with you as a joint applicant, she could.

4. Your PTPTN, I am not sure if it has been included in the CCRIS record, if it has, fine, my calculation is based on the PTPTN already being included in your CCRIS. However, if it has not, then your maximum loan amount should be higher.

Your maximum loan amount: RM474k

Your GF's maximum loan amount: 381k