Please note dthat car loan is based on simple interest. SO, a 4.1% in Car loan can be equal to 6% housing loan.

His gf is not buying her property. She want her name on his property without paying anything.

Dreamer

depends on car. some even 4.5%

Hi everyone,

Just want to set the record straight on a few things first

1. My gf is in her mid 20s, so it may be young or it may b old to some people. I only said she was still studying but not her age. FYI, she's 25 and I'm 26.
2. I didn't say she's not paying for anything. More than half the downpayment is coming from her, so it's still fair that her name is on the S&P even if it is not on the loan agreement
3. I'm sorry I have to disagree about getting the house another time because 10% of a 350k house is 35k, and I don't intend to burn that money now.

I'm drawing up a move in budget soon and will try my best to stick with it

Here's my current status with regards to the loan application:

RHB -> APPROVED!!!
Public Bank -> Processing
UOB -> Just applied

RHB is almost perfect for me except of the no withdrawal thingy. I'm almost certainly cancelling Public Bank because of the 2 name thingy now. Initially I applied for Public Bank as well because of fear that my RHB loan could not get approved for whatever reason.

However, a few hours after I applied for the UOB loan, the RHB mortgage girl call me and say my loan is approved! YAY!

RHB is giving me this offer:
1st year: 0%
2nd year: BLR -1.25%
Thereafter: BLR + 0.1%

Loan tenure 35 years @ RM 1921/month. Daily rest, no withdraw facility. RHB is the panel bank for my housing project

UOB is offering me this:
1st year: BLR - 4.25%
2nd-5th: BLR -1%
Thereafter: BLR + 0%

Loan tenure 30 years @ RM 1961 / month. Daily rest. Withdrawal facility available. Non-panel bank.

I guess I prefer the lowest 1st year rate (RHB). Anyways I think I have to forget bout withdraw facility and just save seperately for rainy days. If I don't have to pay anything for first year, I could have an extra 10k or so for furnishing and moving in costs. Actually I aim to complete my loan at around 24 years (if everything goes well).

Cheers!

i really hope to see both you make it through because the love you guys had was awesome. sharing the burden and trust each other will pull you guys thru.

What happen to your loan when the BLR went up?? Do you need to

A) Increased your monthly payment

B) Extend your loan

Is it (A) or (B)??

Dreamer

P.S.: I wish you best of lucks. It will be very tough for you over the next 5 years. I hope that everything went well for you.


This post has been edited by dreamer101: Apr 20 2006, 11:18 PM

If you are putting your girlfriend's name on the S&P, then do put her name on the loan. If your loan is Rm2k, then she gets half portion...Rm1k. Depending on how much she earns later, I think it'll still be easy to get a car loan. Or else, get the car loan under your name. Unless of course, she's thinking of getting a car about the same price of your house.......

Also, I think there is no better to buy a house than now. The earlier the better. Property prices generally go up . They might stagnant or go down temporarily, but ask yourself.....how much did your parents pay for their house initially, and what is the market value of the same house now.
It is gonna be a long road ahead, but no doubt an enjoyable one.....nothing beats not living on the street.

If you are a wage earner, you can only go so far. You have to invest wisely.

this is informative. just wanna share stuff that crossed my mind:

1. if this is your first property, u'll be guaranteed a ceiling BLR at around 9% (if i'm correct) just in case it shots up to 11% like last time.

2. panel bank is nth la. non panel bank will also works fine. just that u need to follow up closely. some people will reacts unprofessionally when u do no subscribe to panel thingy. but, nth major will happen. maybe just delays.

3. southern bank is offering BLR-0.8% for whole loan tenure. that means interest rate of 5.7% for da moment.

4. dun worry about increment of BLR in da future. surely ur salary has been higher then and u'll be able to afford prepayments to lower down the monthly payments (this will not be that hard compared to first few years when the loan amount is damn huge).

5. i hate hong leong because that's the only bank i cant get approval. they wanted joint applicants but my gf cant be accepted plainly coz we are not married! dun i have the choice of who to nominate as joint borrower?

go get ur house. u'll live to love it. ohh, btw, the renovation and furniture will definitely more than 10K that u mentioned. 30K may the minimum.

good luck!

Hi Dreamer,

The answer to your question is A.

Cheers

AGREED! Here are some considerations on renovations...
Kitchen cabinet (is it included) if not, expect to fork out the max maybe RM20K for nyatoh and solid surface (assuming you have a dry and wet kitchen) of maybe just RM10K for melamine ABS with solid surface.

Other renovations like porch tiling, air con, kitchen floor tiling, etc about RM15k depends on materials.

Thus I wish you young couples all the best.

My parents paid around 167k for a house around 15 years ago. The market value of the same house is currently around 330k. Anyway, I heard some rumours that price of house is increasing by 10% after middle of this year due to higher raw material costs. Not too sure how true is this information. Also heard BLR is going up soon but it should not affect me until the second year.

167K -> 15 years ago , 330K now. Lets assume it is a double and the price is 167 * 2 = 334k

Using rule of 72, the annual rate is 72/15 ~ 4.8% per year

Using Excel spreadsheet, the return is 4.75%

So, this is a return of 4.75% per year. Is this good??

Please noted that I have not factored in the interest that you parent lost to the bank for the housing loan. If you take this into account, the return is not even FD rate. How about the money that your parent sunk in for renovation?

In general and over the long run, the housing price is only going up as much as the GDP rate. This is common sense. The price of the house can only goes up if people can afford to buy it.

Buy a house to live is not an INVESTMENT. 90% of the time, you will lose money when you sell your primary residence. It may serves as a good inflation hedge. You do it because you want to live in that area. And, there is nothing wrong with that. But, do not kid yourself that it is an investment.

Dreamer

This post has been edited by dreamer101: Apr 22 2006, 10:30 AM

Normaldude,

You know that you are not normal. There are not that many people that make 6K per month at the young age of 26. And, if you do a few right things and get the right job, it will not be hard for you to get 10K or more per month. You will be among the few people in Malaysia that can get rich (Millionaire) just by working, saving money and invest wisely. You do not even have to start a business. There are not many people in Malaysia that have that kind of opportunity. So, manage your money wisely.

Dreamer

Hi Dreamer,

I was not thinking of the house as my investment, but more like just a home and a place to live and settle down. A house is probably not a very good "investment" compared to investing in stocks, etc. but it is probably better than upgrading a car.

I'm technically still 25+ until very late of the year and have not quite reach 6k, but still in the mid 5k+. I guess I am in the correct job as I like my job and do understand that I am getting paid reasonable well for my age & experience (which is around 3-4 years).

I do think I have a bit of luck in getting where I am now, but I definitely do not think that I am rich in any way. Mid 5k+ probably used to be big money, but I do think it is not as big as it used to be due to higher cost of living. I hear fresh grads now can get 3.5k? My first job paid 1.5k only . I'm still driving my trusty old Proton which is about to finish paying soon (my first car).

You probably could say that I am not overly ambitous. I'm not keen on starting a business as that would require a lot of money and I won't risk leaving my current job. If I was earning 2-3k the risk is not so great but if I don't succeed in business, it will be difficult for me to find a job that pays 5-6k.

I think I can breach the 10k mark eventually, but now I am still young so I'll wait for my turn. According to the salary evaluation, I have not even reach mid point salary for my job grading yet. And my job grading is only in the middle bracket.

It's very difficult to get rich when working for other people. Unless for some luck/reason the employee stock options that I am currently holding can suddenly cash in for a lot of money. It's not that easy to become a millionaire, whether own business or working for other people.

Since I'm not overly ambitous, what I plan to do is actually finish paying off all my debts first. Housing loan, car loan, PTPTN, etc. Once I've done all of that, I can probably look ahead at midlife and start thinking more about investing.

I'm just a normal dude. I'm not a doctor/pilot/expatriate. I don't have rich parents and am from a middle income family. I don't want/need a bugalow house or fancy car. This 350k house is just a double story link and is in a neighborhood that I like. You can say it is something of my dream house that I had always wanted to get and willing to fork out the money to get it. Of course I do not want to get shortchanged by any banks, so I'm being cautious before signing the loan agreements with the banks.

Regarding the main topic..

UOB did give me a call and said that they can give me 0% for the first year too. RHB bank has already approved my loan and is pressing me to sign the loan papers already and I'm giving them excuses to delay the signing until I hear about my loan application from UOB. Public Bank is probably too slow and by the time they get back to me, I would have already signed for another bank.

The difference between RHB bank and UOB bank is actually RHB bank is offering me a 35 year loan and UOB is offering me a 30 year loan for an additional monthly installment of RM 40. Both rates are according to BLR (except the first year), and UOB is giving me a BLR + 0 instead of BLR + 0.1 as offered by RHB for the subsequent years.

So now my decision is currently favouring UOB until another bank calls me up and give me a different package.

p/s: Anyone knows how much time I have to sign the loan offer letter after the loan has been approved? Is it a standard thing or varies between banks? I'm considering now what should I do if I have to give an answer to RHB before I know the result of my loan application from UOB.

Usually standard 3weeks. But it varies between banks and also lawyers, whether they want to keep the LOF of not. Just be truthful to RHB saying that you are waiting for another bank. In meantime urge the UOB la. Say you want to sign with other bank, etc. Coz some loan officers will just hold back your document as they have reach their target for this month So they might submit your next month.

If you are lucky, u threathen RHB that you are waiting for another bank, then maybe they can give some more reductions (local bank mer... )

Don't sign after 3 months, to the bank it will consider as rejected already. Do read the LOF to see how much time is given by RHB for you to sign the LOF.

No. 3....the SBB rate is actually for refinancing only. So new borrowers are not given the BLR-0.8%.

No. 5....can't you just put your name as as prmary borrower and your girlfriend as guarantor? Some banks have this problem with joint borrowers that are not related....but I think this is usually not a general policy. More like the loan officer's whim and fancy. I say this because I had no problem when I apply for joint borrowing from HL. Didn't take it up in the end ecause the rates are not the best.


minolta

Good point. But what you have not factored in is the hidden profits. If his parents did not buy a house, where would they be living then....somewhere rented I suppose. Then they would have to pay rent. If you take into account the rental saved, what would be the returns then? There is nothing more comfortable than living in your own home. Renovation or not, that is besides the point. You can never renovate if you live in a rented place!




minolta

Another point...I notice that in the tax return form, there is a portion for deductable on the interest paid for financing of your 1st house! Now.....you're earning RM5.5k/month...assuming you get 1 month bonus at least, that would mean you are getting Rm70k/year at least. Depending on your deductions, your chargeable income would probably be still >Rm50k, meaning on the 19% tax bracket! If your interest portion is added to your deductions, maybe your chargeable is <RM50k and pay "only" 13% with RM350 rebate!

Another hidden profit!

minolta

They would have rented. And, being never have to renovate means you save a lot of $$$ on renovation. Plus, you do not have to maintain the house. Quit rent and property tax are not part of your equation either.

And, the rental saved would be paid to bank with the interest of housing loan. Plus, the money you could have invested elsewhere from your down payment and money from renovation. From monetary standpoint, it is probably a case by case basis whether it costs more to rent or buy.

Let's take a very simple analysis.

Interest per year 6% @ 315K (Bank Loan) = $18,900
Interets lost dued to down payment of 35K @ 3.7% FD = 1,295
Total = $20,195
= $1,683 per month!!!

Interest lost dued to renovation?? Property tax, quit rent, maintenance...

Can you rent a very decent hose at $1,000 per month?? Can you rent a bangalow at $2,000 per month??

In general, I think it is NOT worthwhile to buy any house more than 300K to live. And, if you want to buy a house, but it when you can afford a large down payment.

In my neighborhood, a double storey link house was sold recently for 180K. It was rented out at RM600 per month. 6 years ago, the same house was sold for 250K.

Dreamer