hi sifu in the house, so i got these loan package details from different banker (docs submitted, in the midst of application) respectively, how do we go around choosing one, they all look almost the same.
any tips in choosing a house loan?

buying a under con project of RM500k

Maybank


RHB


Public bank

I would choose either MBB or RHB, depending on how often you plan to redraw your money.

If you're salaried worker, you'll probably earn income once a month, so it's better to maintain a semi flexi loan since you won't redraw a lot. However, if you're a businessman then getting RHB will be better since it's a full flexi loan and you can put in and redraw at anytime.

Of course, if you are salaried and prefer a full flexi loan like RHB, it's not wrong at all.

RHB also offers slightly lower interest rate at 4.45% so that's a plus point.

You may want to opt for MLTA which is more beneficial in the long run than bank MRTA. Feel free to ask me more about it if you're interested.

but all 3 banks require no advance notice of surplus payment/withdraw, and no monthly management fee. just difference of 1 time processing fee or min amt of withdraw.
so, i am a bit confuse how RHB full flexi stands out from the other semi-flexi.

yea you are right, employed person so in and out of $ should not be so frequent.

please enlighten me in choosing between mrta vs mlta. some loan package offered better rate if buy assurance from them?

I'm just looking at the difference of 0.05% that it offers compared to the other 2 banks. Otherwise, they don't really stand out. It's just a matter of preference like if you don't want to pay those small fees such as per withdrawal and misc. charges, otherwise, you can decide either 1 of the banks.

The banks normally package is as whole to earn extra profit from you buying from them even if they were to offer lower interest rate but a slight margin. To the bank, it's not considered a loss as you've already upfront spent the money to pay for the MRTA.

MLTA will have a few benefit mainly
- Your MLTA can transfer to other properties upon fully settlement or refinancing thus you don't have to buy another MLTA and you've locked in at a lower price due to buying it at a younger age where as MRTA will be burnt and you have to buy again, if you have health problem, then you can't apply for it anymore in the future house purchase.
- It's overall cost of ownership is cheaper than MRTA
- covers more extensively compared to MRTA
- Level protection rather than MRTA's reducing coverage
- Don't have to fork out one lump sum for payment like MRTA (E.g you pay 20k - 50k upfront depending on your loan size and age) where as MLTA you can opt to pay yearly which could be somewhere from 2k - 3k a year.

This post has been edited by lifebalance: Mar 18 2016, 04:23 PM

Dear,

1. Usually unwill get 90% margin of finance for max. You will get 90% max for your first 2 mortgage loan. More than 2 mortgage loan, the rest will only get 70% max mof

2. For any loan amount, you are eligible to get 90% margin of finance given that your profile is strong and DSR within.

3. 95% can but it is considered as 90% + 5% (legal + valuation fees). Hence total mof is 95%. You finance extra 5% into your loan amount for the legal fees and valuation fees. Thats why sometiems u heard ppl saying they get 95% loan.

4.for 100% loan, this is what we called first housling loan scheme.
With below few essential criteria, you will be eligible for the scheme.
-house rm100k -rm500k range
- income 5k -10k (individual, household income)
- DSR must be 60% or lower

Well, for more information, you can visit their website, www.srp.com.my

However, the approval for this sceheme, will very much based on ur profile and whether you full fill the criterias.

Most of the banks able to apply for 100% loan

Hello all sifus here,
i wanted to ask, buying a new property must purchase fire insurance for that particular property ? i was charged with 3xx.xx premium from liberty insurance company.

i was not aware of this during the purchase of this property, may i know this is compulsory or just bank officer wanted to untung extra ? nowdays banker really sucks, forced you to sign credit card..etc... and other financial products.

Fire insurance is normally recommended by the banks to secure your housing loan as part of the requirement. If you purchase a condo. It's normally bought as a bulk under the condo management for each unit.

The fire insurance is to safeguard your property on the event of fire.

whao.. AIA you very quick response. btw, i want to ask is that possible to cancel this insurance ? it was quite expensive i think not only fire, including flood, break in, house building and home contents.

May i know this is normal procedure for bank to sign up this kind of insurances without customers' consent ？

You must have sign on something to give permission to the bank

It's already charge and the cover note is issued. Canceling it will just waste your money. Just don't renew it next year.

My experience for condo is, i showed them the management fire insurance copy and get refund for the premium charged by bank.For condo, as long as has fire insurance then no need purchase. not sure for landed though.u might need to check with your bank.

Dear,

1. Fire insurance are prerequisite for house owner as it's property biggest risk

2. Bank will usually bundlr the fire insurance upon your mortgage loan. Compulsory

3. If ur property is condo bank won't bundle it together as it's all manage by the condo management unit.

4. If it is landed, then u need to pay for the fire insurance.

5. However, u can use back ur previous fire insurance when u refinance. Just need to send the banker ur previous fire insurance cert doc to continue it. However, it will be troublesome. As u need to show them the fire insurance cert every year to proof that u have fire insurance covered every year.

Dear,

1. Fire insurance are prerequisite for house owner as it's property biggest risk

2. Bank will usually bundlr the fire insurance upon your mortgage loan. Compulsory

3. If ur property is condo bank won't bundle it together as it's all manage by the condo management unit.

4. If it is landed, then u need to pay for the fire insurance.

5. However, u can use back ur previous fire insurance when u refinance. Just need to send the banker ur previous fire insurance cert doc to continue it. However, it will be troublesome. As u need to show them the fire insurance cert every year to proof that u have fire insurance covered every year

6. Usually it is stipulated in ur letter offer. Small fine print and also stipulated in ur loan submission form.

Yaya, tq for your thorough explanation.

Fire insurance is compulsory, bank will charge you via your loan account. Whether you want it or not. Some banks will give you an option to buy from outside but majority will buy automatically with your loan.

Yes, I understand that. Just that both of you need to clarify that if the house has got fire insurance, we can no need take another extra insurance.

For houses, its normally Houseowner & Householder insurance which covers fire,burglar, theft, natural disaster, burst pipes and public liability. I don't believe any insurance company will separate these insurance coverage. At least from my observation.
For other types of property, you may get a separate insurance, like fire insurance only.

Dear,

Hope the info helps, any more inquiries, do ask in this thread.

Need your kind advice here.

For HLB mortgage loan, just wonder if we already make adv payment to the account, will it reduce our monthly payment? else, what will happen then?

As I understand, during the construction period, the interest payable will be reduced by the adv payment, but what happened after completed?

The extra payment you've made is used to reduce the principle thus you're paying lesser interest. However your installment amount per month remains the same.

E.g installment is 2000 per month, 400 paid to principle and 1600 goes to interest, by putting extra every month or one time advance payment, it would make the payment to maybe 800 on principle and 1200 on interest. This effectively reduces your loan tenure e.g you took a loan for 35 years but doing now it's reduced to 30 years, but will not reduce your monthly installment that you pay to the bank.

Hope this is clear enough.

Dear WahBiang,

Extra payment

1. When you pay extra for monthly installment, which it will reduce your total interest charges.

Example:

2016:
Housing loan Rm500,000 / 4.5% interest rate / 35 years loan tenure
Monthly installment is RM2,366 (Rm1,875 Interest + Rm491.28 Principal = Rm2,366)

As you can see, your installment payment are actually paying more towards your interest than your principal.


If you decided to start paying extra RM500 every month. Your Monthly payment will be RM2,866 (RM1,875 Interest +RM991.28 Principal = RM2,866)

You will be paying more towards your Principal with the extra RM500. Hence, if you continue paying extra RM500/month consistently.

Your total interest saved would be RM180,759
Your Loan tenure will be shorten by 136months.

-This will help reduce your interest charges and reduce the loan tenure.

Paying extra to Capital account/advanced account

2. If you have a sudden influx of cash into your pocket, lets say inheritance of RM100,000, and you decided to put it into your housing loan capital account/advanced account, because you have max out ASB and other financial options.

Example:

2016
- Housing loan Rm500,000 / 4.5% interest rate / 35 years loan tenure
Monthly installment is RM2,366 (Rm1,875 Interest + Rm491.28 Principal = Rm2,366)
Total interest charge: RM493,837.28

- If you credit in Rm100,000 into the account, housing loan outstanding would be RM400,000 (RM500,000 -RM100,000), and paying the same installment amount, this will reduce your total interest charge to Rm395,072.

Because the interest you are paying right now is 4.5% on Rm400,000 instead 4.5% on Rm500,000.

Hence, you save interest and reduce the loan tenure likewise.


Do note* Your installment will never alter, your minimum installment payment will forever be the same RM2,366 for the rest of the mortgage tenure. It will never be reduced*


3. After completion, you start paying the installment as normal. Before construction, you are just paying for the interest only, won't reduce your capital.