For every 0.1%, for every 100,000 outstanding, for every year; you are paying RM100 to the bank.

So in this example, 0.05% difference is just RM50 a year. If your loan amount is RM400k, the first year you would already be paying RM200 a year to the bank. I dont know how much your loan amount is, and not sure how often you would be doing the withdrawal, but given the figures, I would go for option 1.

Option 3 is the worst, flexi facilities are just the banks' ways to milk money out of their customers. If you take the facility without the need or without using it, then sorry to say, you are wasting your money. Only businesses would have the needs to use a flexi account.

1. The best practice is to do the valuation before you pay for the booking fees, although that may not always be possible.

2. The next best thing is to proceed, but with the lowered valuation, and fail to get the 90% loan as per stated in the booking form. Agents do not like to include this clause into the booking form, but you HAVE to know your rights.

3. You can also include the clause "subject to valuation matching the selling price" and be done with it. Agents will hate you, and may not even proceed with the transaction.

It is all about negotiation

Regardless of your abilities to repay your loans in 15 or 10 year period, I would advice that you apply for the mortgage based on the longest tenure possible.

This is because it is possible for you to pay more and reduce interest and tenure if you do take a 35 year long tenure.. but it is almost impossible to lengthen the tenure if you have already chosen to apply for a shorter tenure. Flexibility may be important in the future. All the bank loans have flexi facility (not necessarily full flexi though), so use it.

The rate is usually dependent on the loan amount that you applied for.. typically anything above 500k can get about 4.45%... each bank has its own baord rate, and appeal rate, although the success of the appeals are dependent on the banks and how the agents draft your appeals.

Let me know if you need help with the application

And remember, avoid to use the agent's lawyer for the SPA. There are tons of lawyers out there that you can use, why expose yourself to a conflict of interest by accepting the agent's, which is the other party of the transaction, recommended lawyer.

Hello,

As for the hassle, it is highly dependent on the bank, some banks want more details and others want less. I wont name names, but a particular small bank that I know of requires letters from HR regarding the company (perhaps, the company profile) while other bigger banks would only require that the payslips have the letter head from the companies.

Essentially smaller banks would need to be more careful when lending money since their cost of funds are generally higher than bigger banks that have a lot of network throughout Malaysia, and with more people banking and depositing more money into their banks, they cost of funds gets cheaper and they can be a little more lenient. Such is my experience when processing loans from multiple banks on behalf of my clients.

Some banks require only an EPF statement for their housing loan application, while others want your degree lah, your wife's bank statement lah, your maid's passport and photo lah (just kidding). But such is the case in the industry.

And here's a calculation for you.

1. Banks have different ways of calculating the commitments of each applicant, and they differ from each other. What the banks would do is to look at your CCRIS, know the type of loan (hire purchase, mortgage, etc.), know the loan limit (original loan amount).... and from these information they would calculate you monthly commitment

Obviously they have to use a set formula, where for this particular Bank O, the hire purchase is calculated such as that the interest is 3.5% (simple interest) at 7 years repayment. But what if you are paying it back in 9 years with 3% interest? Obviously there would be some differences as you would be paying lower than what the bank calculated.

To solve this, all you need to do is to provide the letter offer of the hire purchase that you took to show exactly how much you are paying. Most banks will use the numbers stated in the letter offer instead then.

2. Financially speaking, I recommend that you do NOT refinance the hire purchase... it would be a loss for you, and wouldnt make sense just for the sake reducing the tenure... I do holistic financial planning, and there are tons of ways to help the clients manage their cash flow, and refinancing the hire purchase is not one of them

Oh it doesnt end here. You will have to keep up with the agent and lawyer to make sure that the loan proceeds smoothly, all the way until the loan execution. Don't let your guard down.

Oh a completed developer unit. No hassle buy, no need to think about the property not completed halfway, no need to think about paying the interests.. let me know if you need to discuss the MLTA insurance

OCBC isnt too keen on doing mortgage for a few years now. My RMs all changed their focus from mortgage to CC.

It is sad thing since I started with OCBC and was very happy with them. It is a race to the bottom by all the banks now, and OCBC doesnt want to join in. THe result is customer service is taking a hit by all the banks

This is not off topic at all

1. When signing the S&P/SPA you will need to pay the 10% or balance of the 10% of the house price as deposit.
2. Payment for the SPA services can be deferred even after signing the SPA, most lawyers allow this deferment, but the stamp duty has to be paid on the spot since the lawfirms will have to make this payment to LHDN
3. Loan documents (Loan Agreement, LA), if financed into the loan you dont have to worry about them.
4. But if there are balances (since the LA financing is not enough to cover the total cost) or you are paying by cash, they would ask you to settle the balance before they send the documents back to the bank for execution. This is done to protect their interest as a service provider

1. The 10% is upon signing the SPA... SPA stamp duty better pay on the spot to avoid delays... SPA legal fees itself can be deferred, but depends on the law year.

2. LA and LA stamp duty, if financed into the loan, then not really a big concern unless there is a shortfall

3. As for the solicitor's performance, my advice would be to avoid using the one recommended by the property agent. I have a short write up about this

Choosing your SPA/S&P and LA Lawyers: http://bit.ly/2oSQZMM

This post has been edited by wild_card_my: Apr 22 2017, 12:03 PM

1. The house you are buying next with a loan would be your first housing loan, thus you would still have 2 houses that you can buy with 90% margin-of-finance (MOF)

2. See calculation below

3. Understood

4. This is a good offer although some companies are getting flat 4%. The problem with these offers is that usually when you leave the company, they would require that you refinance the loan to a different bank, and that may cost (in terms of time, money, anxiety) you later. You need to check on the T&C, but as it is, it is a good offer

5a) It depends, if it is underconstruction you may get "rebates" that can be used against the 10%. If you are buying subsale you need to prepare more than just 10%, prepare another 5% for the SPA and stamp duty.

5b) Yes, the interest charged will be based on outstanding loan amount, which is released by the bank to the developer. These amount is released progressively, thus the term "progressive interest". As more is released to the developer, your interest payments increases, all the way until VP, of which point you would need to start paying the full installment (interest + capital)

1. If the discount given is as per what you mentioned, then you are still responsible for the RM26671. This is because the bank is giving the discount and it is being reflected in the S&P/SPA

2. Rebate is usually applicable to the downpayment, and since you are getting 5% rebate, you are only responsible to pay RM26671 since you have already paid RM5k as the booking fees

3. In the event you find a cool developer that gives you more than 10% rebate, whatever is applicable can be cashed out as cash, as long as the bank is giving 90% margin-on-finance based on the SPA price.

Calculation: based on 4.5% rate, and 80% debt-service-ratio which is not too high nor low. Different banks have different DSR limits

thanks... what is the DSR situation in OCBC now? What about the financing of the LVS? It changed drastically a few years ago and a lot of people lost interests..

Nothing is compulsory, BNM directive. But the banks can refuse to give you a good rate if you refuse their MRTA.

I agree with the above. Financing it into the loan, as you would still have the cash in hand to invest (parking) in the FD or other liquid investment schemes, and when the opportunity presents itself you could start investing them at higher yields.

RHB is much better at face value

1. The interest is lower by 0.1% that would save you a lot in the long run
2. MRTT is good, but have you checked the tenure and coverage? Please ask about this from the banker.
3. Legal fees actually cover only the Loan Agreement (LA) and not the S&P. Some developers will pay for your LA, others will not. If it turns out that the LA is paid for by the developer, then no issues there, the RM6k legal fees will NOT be drawn from your loan account. You only need to payback for the amount is drawn out of your loan account

Okay, having joint loan isn't that bad, as long as you dont plan to own as many as 4 properties (2 properties each person) in the future, which would entitle you to get 90% financing each person. On the other hand, is the project a commercial-title project? If it is the loan is for a commercial property, this loan will NOT be counted as one of your residential loans which means you can still get 2 residential loans at 90% margin

In addition, since the loan is joint-loan, when you apply for a house in the future individuall, this particular loan commitments will be split into 2 (or more, depending on the number of applicant), so it will reduce your overall commitment, per person.

Let me know if you need any more help.

Faiz Azmi, Mortgage Consultant

This post has been edited by wild_card_my: May 19 2017, 11:50 AM

1. 300k isn't that much of a shortfall, you can cover the rest with MLTA if you want, only 50k. Remember, MRTA coverage reduces overtime and it does not necessarily follow that of the loan outstanding.

2. Usually yes, a good banker would know to quote the costs first, but sometimes they just put a round figure based on experience. RM6 is plenty for this loan size

3. Even better, then it being a joint-loan should not affect her negatively too much.

4. Yes, you are correct in the future, when she is applying another loan (individully or join-twith you), the commitment for this particular house (what is the installment? RM1500?) would be divided into 2 when the new bank is calculating her commitment.

5. It depends on the MRTA setup. Is it half-half, of which one half is assigned to each one of you? Will the mother be paying at all or just her (or just you, since you mentioned that she is a house wife) If you are the one paying for EVERYTHING of the installment, then you NEED to get an insurance for youself tocover the loan amount, because you are the breadwinner.

As per point 5. above, if you think you want to get MLTA for yourself, then you should ask RHB to minimize the MRTA to minimal (just to get the good interest rates). The logic is simple, this is because if something happened to either of them, the installment can still be repaid. But if something happened to the breadwinner then they will be without a house.

Okay, since she is the one who will be paying 100% of the installment, then 100% MRTA is the perfect combination. Top up a bit with life insurance to cover the shortfall if you want, then you should be set. Even the tenure is 35 years, matching the loan tenure.

Yeah, RHB is definite choice now, due to the above, and also that it is joint loan with her mother - that way her commitment for this house is calculated as half (RM600 only) for her mortgage application on the next house

Yes, it will affect if her mother's name is part of the S&P.

1. If the mother is part of the S&P, you will only get half the exemption. Meaning for property RM300k, the stampduty should be RM5,000 right? But since she is getting only half the entitlement, her exemption would be RM2,500 only and she would still need to pay the other RM2,500
2. As for the loan stamp duty, the same thing applies. Stamp duty for the loan would be 0.5% of the loan amount, and she would get the exemption on half of it since this is a joint loan between the two.
3. You can always request RHB to do 3rd party financing, with only your girlfriend having her name on the S&P but the loan applicants remain to be your girlfriend and her mother. This way they will get the full exemption on the S&P stamp duty, but only half exemption on the legal agreement (0.5% of the agreement size



This is completely wrong. Please read what I wrote above. And what do you mean "it's fine?", as a specialist, you should elaborate.

Should not be an issue, but need to find out the other End Financiers as well, and need to check if their quotas are still available

1. No need. Do not meddle the waters, that is from my experience. It is normal for settled loans to disappear from your CCRIS, that is good.

2. EA forms are usually not required unless you want to prove your bonus income of which you obviously do not have. Ifyou are new to the company, you should submit your employment LO (including the renumeration details), 3 months salary and bank statement. No problems with telling the bank that you are new at the company.

If they ask for your Borang BE and tax payment receipt you can give to them, no problems; but as it is, your 3 months salary and bank statement should be good enough. Tax documents are most important for business owners (enterprise and sdn bhd directors)

Let me know if you need any help

1. It helps with some banks, it doesn't affect at all with the others. In general MBB and PBB would consider your FD, othersdon't even care about your liquid asset. Maybank may require that you transfer the FD to their account instead.

2. If you open an FD account with them (especially MBB) they may give a better interest rates, usually the FD is already negotiated togive you the lower rate

3. You need to show them proof, in the form of the statement

4. You can download the softcopy and print it out. If the banker wants to, he can ask you to verify the document at the branch. But from my experience, never do I need to do that.

Yeap, as mentioned privately and for the benefit of everyone, it is possible to cancel by just letting them know that you have signed with a different bank. Affin banker probably wants the case to go through thus the scare tactics.

By calling Affin, they will now that you have signed with a different bank and would automatically cancel their own offer to avoid you from doing a loan compression - using 1 borrower profile (that can qualify to purchase one 1 property) to purchase multiple properties by applying for mortgages at the same time.