Hi All Handsome boy....

05 jul'13 we Dear Bank Negara have come out new Rule.


1) Maximum tenure of 10 years for financing extended for personal use;

2) Maximum tenure of 35 years for financing granted for the purchase of residential and non-residential properties;

3) Prohibition on the offering of pre-approved personal financing products.

May i know from start now the Top up loan and Refinance still can go for 35 years? because my friend told me the cash out portion only for 10 year.

for example: Now loan 200k, then Refinance with market value 300k, so the cash out 100k is tenure 10 years, then the remaining loan 200k will be 35 years.

May i know is it my friend saying is true?

sounds legit, they treat the top up loan as personal financing. No big deal. Refinance = Restart

This post has been edited by nilambanting: Jul 18 2013, 10:23 AM

The above example is not sure yet, becuase is hearing from my friend only... so need Taiko here give advice for my above question.

If you understand the concept of refinancing, its lock your finance freedom from restart and giving no room for you props to appreciate. If u still failed to recover from refinancing (short term assisting), says bye bye to ur unit in Auction. But when bank deal with auction, means they failed to screen refinance package with risk assessment on the applicant accordingly. 10 years for top up is just perfect and good move

I dont think the Top up is 10 years... i think my friend is wrong...

The Top up and refinance can totally get 35 Years...

Yes.

There is no such thing as top up loan >.<

As now you are getting housing loan amounting RM200,000.

Lets just say 5 years later, you would like to refinance ur house and loan amount is RM300,000. This RM300,000 will settle your outstanding loan from your earlier loan. (200k) the remaining balance will go to you.

The max loan tenure period you can get for this RM300,000 is 35 years provided you are young enough to enjoy this 35years.

Please enlighten me =)

Top up loan only need to pay valuation fee, no need legal fee...

But the question is loan tenure for extra 200k cash out will be limited to 10 years only or it can follow total loan tenure of 30 or 35 years....

its still 35etc ore lesser depending on banks but this ruling might change anytime now onwards to max cap of 10 years

good luck

Most banks hv implemented the max 10 years repayment for the portion of amt that is not under any financing currently. Stanchart, Citibank & Alliance Bank not yet implement but will implement anytime or latest by October.

I have post a question to bankers here. https://forum.lowyat.net/topic/2759418/+440

Let's wait the answer from the professional.



This post has been edited by propusers: Sep 13 2013, 02:28 PM

Hello everyone, I am Faiz, and let me clear some things up

1. Recently BNM has set up a guideline to reduce the maximum tenure for personal loans to 10 years. This is done to curb increasing household debt and irresponsible or needless spending (wedding receptions, vacations, home appliances) by the Malaysian public..

2. Unfortunately, the cash-out portion from a refinancing is now considered as personal loans, because borrowers are mortgaging their property that has already been partially paid to get cash that can contribute to needless spending as per above.

3. So now, when refinancing:

a) The outstanding amount from your current loan as well as the redemption fees can be refinanced to the maximum tenure that is available to you (i.e 35 years or until age of 70 for most banks)

b) Anything extra, that is the cash out portion is limited to 10 years.

c) For most banks, the cash-out portion gets the same interest rate as the refinanced amount

4. So essentially, the best reason to refinance is to lower the interest rate from the old rate that you signed up with to the new rate.

5. However, it is not a bad idea to refinance to get some cash along the way because the rate is still significantly lower than the typical personal loans.

6. All BANKS as well as FINANCIAL INSTITUTIONS like MBSB has to follow this new rule. It is only a matter of time between now and the implementation.

7. As of now, the list of banks that has already implemented this rule are:

OCBC, MAYBANK

The banks that have yet to do it but confirmed to are:

MBSB, AMBANK, HSBC, STANDARD CHARTED

Everyone, I am a mortgage consultant. Self-professed, sure, but I am not an agent nor broker. I talk to my clients, discuss with them on the best methods to get a loan, indulge them with industry-related news and tangos, and my motto is share share share. Share with everyone on how involved I am with mortgages and I know you will come calling. So do call if you need to buy a property and need some help securing loans.

Check out my other threads down below to understand more about mortgages, don't forget to ask questions:

1) https://forum.lowyat.net/topic/2671761/+40

2) https://forum.lowyat.net/topic/2759418/+440

Thank you

This post has been edited by wild_card_my: Sep 13 2013, 10:21 PM

Example of Previous Refinancing Practice
eg : Existing Loan : RM 300k
Mrket Value : RM 500k
Loan Amount : RM 450k(90%)
Based on new installment of 35 years (rate - 2.35%): RM 2060

After this rules : RM 300k is based on 35 years
Balance RM 150k is based on 10 years
New installment 300k(35 years same rate) : RM 1,374
*cashout*New installment 150k(10 years same rate) : RM 1,538
TOTAL NEW INSTALLMENT = RM 2912.00

Impact is RM 900.00 on our commitment

I hope u can undrstand what i what i wnt to say..hehe

Hey people, I have made a small illustration on the impact on your refinancing of the outstanding amount and the cash-out portion between the old policy and the new policy





This post has been edited by wild_card_my: Sep 14 2013, 10:39 AM

I believe this is a logical explanation.

based on experience, the bank would not consider initial financing amount, say 300k as redemption amount for the existing loan and then allow the amount based on 90% of market value (minus 300k) as top up; e.g.: Market value 400k, outstanding 200k -->> 300k to redeem the loan @ 35 years financing and 60k as top up loan @ 10 years tenure

Like what Faiz has mentioned, the bank normally practices 2 drawdowns to redeem your current loan. The first drawdown is to settle the OUTSTANDING amount which is 200k and 160k as top up.

200k is 35 years and 160k for 10 years

I know that this thread has aged for longer than a year, but I was redirected to this thread by another forummer.

Let it be known that you can still refinance for 35 years repayment. The difference is that the cash-out portion is not being calculated as if you are making your repayments in 10 years and not 35 years. So for most people, the loan applications would be rather difficult. However, if approved, you would be repaying both the refinancing and the cash-out in 35 years.

Faiz Azmi

alamak, just simple English,

is it 35 years or 10 years?

Yea 35 or 10????

Top up portion 10 years lah, your loan still 35 years