Thanks a lot for your answer. yeah.. I saw the rate is high compared to others. Just because they offered 105% loan that makes me considered their loan compared to others. here's the pdf,
http://mbsb.com.my/misc/promo_rumah_pertama.pdf

I saw your phone no back then in this thread, would you mind if later if I got enquiry or need your help in this trade, I call you for help? or might ask you to arrange for us?

Noted. Thanks for the info

This post has been edited by wuwah: Dec 31 2014, 12:16 AM

What if the 2nd property already finished pay off all the loan amount and buying 3rd property also subject to 70% MOF?

There are 2 types of insurances that you can get to cover your mortgage:

a) MRTA
b) Everything ELSE (usually referred to as MLTA, MRTT, whatever)

THE MRTA
-Sold by the banks
-Has to be paid in lump sum, thus
-Can be financed into the loan
-Doing so would increase your loan amount on to of your property loan, thus increasing your monthly repayment
-Coverage is based on reducing balance, usually it tries to track the loan outstanding for a given tenure
-Attached to that particular loan you are applying to, if you refinance, early settle, or sell the house, the MRTA would cease to exist
-Usually does not cover Critical Illness, and only sometimes cover Total Permanent Disability

THE MLTA (or whatever)
-Are simply term or life insurance
-can be paid monthly, or as per my recommendation, on a yearly basis
-cannot be finance into the loan in general (some banks do allow them to though, like OCBC)
-Of course, if you finance it into the loan it would increase your monthly repayment as well
-I do recommend that you do not include it into the loan to avoid paying interest on the borrowings, just pay as you go yearly
-Coverage is level throughout your life. It will not reduce, nor increase. But you can adjust it if you want to
-Attached to you. Hey, it is a life insurance! It follows you everywhere regardless of your commitments/liabilities (like your mortgages and other loans)
-As such it will continue to exist even if you refinance/settle/sell your house
-Flexible. Covers TPD as default and CI if you choose so

Here are some illustration:





Yes they may, because LHDN has all the records of all previously transacted prices of the properties in any given area - since they are ones charging the stamp duties on the SPA agreements.

But from my experience, differences of just 10-20% of the selling price to the open market value has never triggered any inquiries from the LHDN. Also do note that during the verbal valuation, the valuers are happy to green light an asking price below the open market value, and you can use the valuation report as evidence that the market value of that particular property is as stated on the valuation report and the SPA.

So the idea is that the SPA has to have a matching valuation as per the report then and there wouldn't be any issue.

You gave a good input on the discussion though, and that is highly appreciated. I simply didn't think it would be an issue for this particular client though.

Nope, if you have settled your 2nd property, the record of that loan would be removed from your CCRIS, and the bank can give your 3rd housing loan a 90% MOF.

And this unencumbered (without any loans) property can be refinanced regardless of any recent BNM rules:

a. The calculation for the approval as well as the installment to be at the maximum of 35 years, as opposed to 10 years for encumbered properties
b. Not subject to 3rd property-70% MOF rules whatsoever; even if you already have 2 housing loans, and you want to refinance this unencumbered property, you would be allowed to finance it for up to 90% of the market value (so you can get more cash)

This post has been edited by wild_card_my: Dec 31 2014, 01:04 AM

huaa thanks for the explanation bro.

would like to know. if i can have roughly 1.5k available for monthly home loan.

what price range of property i can look for ? below 200k ?

Bro are you sure that refinancing of fully paid property is not subjected to LTV 70%?

I thought it is considered as a new application so the same restriction applies, no?

Refinance doesn't increase the number of loan , so I don't think it applies to LTV 70%

@wild_card_my, hi there I have a question. I am currently engaged to Alliance Islamic Loan for the 5th year and the details as below.

Initial loan amount : RM 301k
Interest rate : first 12 mths : 3.25%
Thereafter : BLR -2.05%
Tenure : 30 years
Current payment : RM 1.5k

I am thinking of refinancing my condo to payoff my car loan so that I can have lesser monthly commitment. I also understand that this will extend the loan tenure. Do you think it is advisable or just a stupid idea?

My current income : RM 5350 ( fix with allowance )
Car loan : 52k
Interest : 2.7%

Pls advice. Thanks

If you area saying monthly installment RM1500

Property range around RM 350-300K

Hi, Mr KB9

If you have 2 properties on hand, refinance any one of it will still consider 2nd house 90% Refinance.

MOF 70% will only be counted if you have 3 residential properties on hand !

If you Refinance UNENCUMBERED property, your DSR calculation will be much lesser for certain bank, lower commitment DSR for your loan to pass through.

It's all under BNM rules and regulation, @wild_card_my is correct.

Refinance still falls onto the Refinanced Properties loan, in banks record to be clear. =)

and you are right !

Hi jocall123, let me give you my suggestion

Refinance cash out to pay off car loan is not a wise move. Let me explain succintly.

Your car loan is calculated based on flat rate, meaning to say the moment you purchase your car, the interest has already been calculated based on your purchased price, hence your installment will bore the interest from the beginning and paying off car loan earlier doesn't help you to save a cent of car loan interest.

I advise that you refinance cash out and park the cash in better investment, such as ASB( if you are muslim ), pay off credit card or personal loan. Or as your personal contingencies.

Hope my answer do shone some light to you inquiries =)

I have to disagree on the interest savings part.

No doubt that

1) Interest on Car Loan is fixed in nature
2) Interest in higher upfront - due to Rule 78 Calculations

but you will still get some interest saving as you will not be charged interest from the day you settled your Loan until the original expiry date of the Car Loan. You still save but much less.

Try this link for savings on Car Loan

http://autoworld.com.my/v2/tools/loan_settlement.asp

In the end of the day, its to to with your Cash Flow. Cos if you Refinance, the repayment is stretched over a longer period

I don't think that's correct. An unencumbered property means no loan is attached to it. Refinance it means a new loan is created, so it in fact weaken the DSR (but whether that new DSR is still healthy or not is diff story).

Actually my car is still new, I just got it 6 months ago, using the calculator link, I got rebate of about 8k. I m blur with all these finance thingy actually -.-!! I only think that if I refinance my monthly commitment will drop from RM 2200 to lesser.

Anyway if paying off car is out of the picture, would it be advisable to refinance anyway based on the current BR rate and my current interest rate with the bank? Just let's say I wish to have some cash in hand.

Actually is like this, lets say you refinance a property.

Property price Rm500,000
O/S Price Rm60,000

RM500,000 X90% =RM450，000

RM450,000-RM60,000 = RM390,000

you can cash out RM 390,000

hence, Refinance to a new bank, DSR Calculation


encumbered Property
O/S loan =RM60,000 (normal BLR-2.4 / 35 YEARS max)
RM282/month

Term loan =RM390,000 (normal BLR-2.4 /10 years max )
RM4032/month

TOTAL Back End DSR = RM 4314


Refinance an unencumbered property.

Property Price RM500,000
RM500,000 X90% =RM450，000

You can cash out RM450,000

Unencumbered Property



Term loan =RM450,000 (normal BLR-2.4 /35 years max )

Rm2115/month

Total Back End DSR = RM2115

BE DSR RM4314 (encumebred) compare to BE DSR RM2115 (unencumbered)

Unencumbered Property approval for income base isn't it lower ?


That's why it's lower for Back end DSR calculation on the unencumbered property, easier loan approval for limited income.

This calculation is based on certain bank, not all bank holds similar calculation.

This post has been edited by Aik_FEI: Jan 5 2015, 05:21 PM

I'm actually quite confused. If I interpret you correctly, you are saying that using one unencumbered property to borrow and redeem another encumbered property with a loan outstanding of RM60k (but why RM60k - do I miss out sth from previous posts?). Fine, there will only be one loan then. But this should not be generalised that the DSR will be lower by refinancing as there are too many assumptions involved - the value of the unencumbered property, the outstanding of the existing loan, the monthly instalments of the new and existing loan (to be repaid) etc. Further, fees (legal, loan documentation and stamp duty) will be incurred, so this has to be factored in too (though this is unrelated to DSR).

This post has been edited by Jasoncat: Jan 5 2015, 02:03 PM

Guys, we have a loan with UOB. Not much RM240k that we are thinking of refinancing over to get a better rate. Problem is i am newly self employed in Australia (new company and everything so records of earnings are not available yet). Will that be an issue?

We have an extremely strong asset position (cash on hand, properties in Australia, Malaysia etc...). Will that help at all?

Thanks.

Bro my bad, I have reedit my post. TYPO !
DO review, and give me some feedback.

I understand that tenure for the top up portion of a loan (eg your 1st scenario, cash out by RM390k) is subject to 10 years cap. Even for refinancing of an unencumbered property (eg your 2nd scenario, cash out for RM450k), it is also subject to max tenure of 10 years. I know some may disagree - yes I can understand that as there are some banks somehow package it as max 35-year loan. (you don't need to argue with me as I'm just telling what I get to know)

So, if the "cash out" loans in both examples can go up to 35 years or must cap at 10 years, there is no apparent benefit in refinancing of an unencumbered property from the DSR perspective.