Dear Argiope,

1. For Loan amount Rm500,000, the rate can go from 4.38-4.45% HLBB rate is not the best, compare to other bank.

2. Should you settle it really depends on your income, whether your income is sufficient for you to refinance Rm500,000 with existing Rm150,000 outstanding balance debt. I would need your income and all existing debt commitment to calculate this.

If your income sufficient for RM500K refinance, then you won't need to settle RM150K mortgage loan... it is a huge amount. Hence, you save on paying RM150K and get the refinance done.

If you opt to settle it, make sure it is not within the lock in period, as they is 2-3% penalty for settling property within lock in period.

3. Go for flexi loan but semi flexi instead of term loan. Semi flexi at least you can withdraw your cash (given that you creditted some amount of cash in the capital account) Semi flexi is suitable for people without huge cash flow monthly, moreover they don't need to pay rm10 monthly maintenance fees.

Going for term loan wouldn't reduce the interest rate, the rate is same for flexi and term loan.

Dear,

1. Comparing banks, first of all you need to know your profile suits which bank. After you know which bank will accept your profile, only then you compare among them. I would need to know your income profile and debt/commitment before I can assess your loan cash out eligibility.

2. To refinance cash out to settle your outstanding loan isn't a wise decision. Mortgage loan is the cheapest financing we can get right now. Given that your thought is to cover the lower rate with higher rate mortgage interest rate isn't wrong at all. But, it will be a waste, why don't you refinance cash out, park the money into your old mortgage loan account, but not fully settle Rm150,000 (AS IT WILL AUTO SETTLE) park Rm100,000. Hence when you need the cash, you can withdraw it anytime.

When you settle the loan immediately, your RM150,000 will stuck in the bricks.

3. You need to know what's your objective, to invest? to purchase more property? to pay off debt. Then cash out amount accordingly.

I would recommend you not to settle in one shot, but park money in the current/capital account, while serving minimum interest installment, then use the remaining cash for other purposes.

Dear Argiope,

1. non flexi, is it written in the Letter offer as term loan facility?

2. The legal fees of RM3.3K is only the professional fees, it will incur other legal cost including disbursement costs total up should be around RM7-RM8k

3. Valuation fees would be around RM1K, so it's still within the standard budget.

4. Make sure UOB doesn't charge you processing fees.

Sounds good enough

You need to check the loan whether it's a term loan or not and how is the principle deduction calculated. Going through your letter offer will tell you what you're in for.

My refinanced loan of RM400k was approved at the rate of 4.45% by UOB for a non-flexi loan with lock-in period of 3 years.

the LO will expire within 2 weeks - 1 month. After this period, your offer letter is considered void and will require to re-apply again. If you only need the fund by December, you should only apply it around Sept and the funds would fully disburse by December.

The disbursement factor also depends on your title whether it's leasehold or freehold. Leasehold will normally take a longer period of time due to the lawyer need to get the permission from the government for you to charge the title to the bank.

Since this is a refinance case, you may be allowed to hold the loan prior to the instruction from the lawyer to the bank for the disbursement, but I am not sure since you're going to put it on hold for 8 more months with the reason that you don't need the loan. You will need to get the advise of the lawyer you're appointing on this. Different banks have different guidelines. If the UOB banker mentioned you can do so, please double confirm it with the lawyer.

If you've signed the LO, you've agreed to it's terms and condition, if the lawyer is appointed by the bank, they would have done some of the paperwork prior to your disbursement, should you choose to delay too long, they will consider you would have to do cancellation prior to the loan disbursement and you will need to pay the cancellation fees + legal fees incurred.

Once you've signed the LO, the bank will hold this reserve of 400k for your refinance, and it's not being utilized by another borrower, the bank would want to disburse the money to you ASAP, not delay it longer because they want to earn your interest.

Normally it must be paid before loan fully disbursed.