Hi all, my current mortgage loan interest is @ 4.5% for 520k Lon amount and tenure is 33 years, is that consider a fair deal? Thanks

can get 4.22%

Not really a good deal

How much is the monthly different if compare to my 4.5%? How can I change the loan ?

You request to appeal for better rate, with terms and condition. Alternatively, you can try other bank which may offer you better rate.

Since information is limited, I'll just illustrate a simple example

based on 35 years, 500k loan amount

4.22% - RM2,280 monthly

4.50% - RM2,366 monthly

any kuching house loan advisor here? would like to buy a first house. prefer if can do islamic loan.

Kuching ?

Best you walk into your nearby Bank Branches around you.

Hmm, did once Kuching loan before. Not a pleasant experience. They will need to follow state law and valuation must follow initial SNP price. For instance, RM 150k low cost flat, the valuation must not exceeds RM 150k. I suppose this law only applicable to low cost building only.

Hi, sifus. May I know what is the difference between MM (Musyarakah Mutanaqisah) and CM (Commodity Murabahah) islamic loan? Which one is more preferred?

In Malaysia, there are 2 types of Islamic home loans. (Note: Some consider the use of the term “Islamic Home Loan” inaccurate. Firstly, Islamic Loans are benevolent loans that are interest / profit free. Secondly, contracts are technically not loans, but “Buy and Sell” or “Joint Partnership” agreements). The most common form is based on Bai Bithamin Ajil (BBA), which is itself a subset of the Murabahah concept. Less popular are facilities based on Musyarakah Mutanaqisah (MM).

The difference is as follows:

Murabahah
Cost plus profit mark up. Usually used to describe facilities with financing tenures less than 12 months and paid in a lump sum (E.g. Trade Financing). Sometimes used to describe BBA Islamic home financing products as well.

BBA
Cost plus profit mark up, paid over a deferred period of time. For housing loans, it means the bank buys the property and sells it to you at an agreed price (which includes the principal amount + profit) to be paid over X number of years.

MM
Also known as Diminishing Musyarakah (DM). A partnership between bank and customer to buy the property. The bank leases the property back to you at an agreed rental amount (which includes principal repayment + profit component) and progressively decreases its shareholding over time. (E.g. Start with 90-10 ownership, after 10 years it become 60-40 ownership.

Determining the Profit
Regardless of the type of Islamic financing, it is necessary to determine the Profit Margin that banks stand to gain. There is no standard “Islamic” method for this. In most cases, bank’s calculate based on Conventional banking interest rate and amortization methods (except without compounding interest in overdue situation) and extrapolate back into terms acceptable to Islamic teachings.

For BBA/Murabahah, the profit margin is determined by a Fixed Profit Rate e.g. 10% p.a. which determines the Sale Price. The Sale Price divided by the number of months gives the Monthly Instalment. In its early days, Islamic Financing in Malaysia automatically meant Fixed Rate financing. However, they were not competitive against conventional Floating Rate loans.

Over time, Floating Rate BBA facilities were introduced. Since BBA facilities are Buy & Sell contracts based on an absolute Sale Price, a Rebate mechanism was introduced to emulate conventional Floating Rates. (Note: There are no standard “Islamic” formulas for calculating rebates. But operationally, most banks calculate rebates based on the difference between the Fixed Profit Rate and an Effective Profit Rate (EPR) to make it comparable to Conventional Floating Rate facilities e.g.:

BFR 6%-Spread 2% = EPR 4%.

Fixed Profit Rate 10% - EPR 4% = Rebate 6%

Additionally, the Fixed Profit Rate essentially became a Profit Rate Cap for which BBA facilities are now known for.

For MM, the profit is determined by the Rental Price. Again, operationally, banks base the pricing on comparable conventional banking calculations.

Choosing Between BBA and MM
Theoretically, between MM and BBA, due to the joint ownership concept, MM provides a better level of protection to the customer as any losses (E.g. Damage caused by natural disasters) are jointly owned. However, it may not be so in practice. As at this time of writing, there have not yet been any legal precedents.
-LoanStreet

Hi all,

Appreciate if you guys could share my loan eligibility. Looking to buy a house with the price of RM479,900 with 90% loan. Details as below:

Age: 28
Gross pay: rm4305
Nett pay: rm3894.25
Rental Income: 0
Bonus: 0.7month only in 2017 (sad)

Commitment
House: 0
Car: rm730
Credit Card outstanding: rm0 (but got 2 installments worth almost rm5k - if needed, i will make settlement on one of the items worth almost rm3k)
Personal Loan: rm0
PTPTN: rm0

And one more question, actually currently i have another job offer and i would probably tender my resignation soon. Would it affect my loan approval if I were in resignation notice period?

Thanks in advance guys for your help!

it will affect your application if you've resigned mid-way before the loan is approved.

It will be quite tough for you to secure a 90% loan based on your current commitments and income, will suggest you to look at something more affordable.

Thanks for your answer. Would it help if I were to make the settelement on one of my credit cards installment?

On the resignation, do i require any guarantor to make it easier to be approved? Or do I need to do joint loan with my wife? She is also working and earning about rm5.5k gross income. No credit card and only car loan of Rm470 per month.

Thanks.

Hi Hidz7,

Please find DSR range as below.

60% : RM 307,771.64
70% : RM 390,057.84
75% : RM 431,200.94

Different bank will have different DSR calculation. Best practice is to see your income document, CCRIS and CTOS before finalize everything.

If you intend to tend your resignation, I suggest you to get loan approved first. Your scoring definitely will be affected if you are in midst of changing job.

Your credit card installment amount will be calculated at 5% of total outstanding, instead of installment amount attach with bank/merchant.

I recommend you to fully settle your credit card outstanding including any installment plan as your eligibility is merely bottom line of bank's calculation.

Alternatively, you may request your join in as co-applicant to increase total loan eligibility.

It will help but the max loan you can apply after settling the credit card is about 400k

Banks don't accept guarantor nowadays

Need to be joint borrower

Looks like you need to joint loan with your wife or get your wife to make the purchase with her own name since her pay is higher with lesser commitments

Thanks a lot guys. Your explanations really help in understanding the house loan eligibility in general. Pray for me that my loan application will go well. Thanks again!

Sure thing. Keep us posted on your loan application

Feel free to ask me again if you got doubts

Which bank offers semi flexi housing loan?

Most banks offer semi flexi loan by default unless you request got full flexi facility