Dec 13 2014, 12:42 PM
QUOTE(wild_card_my @ Dec 13 2014, 10:47 AM)
Uncle, after I post this I hope you can stand down and accept that you have the wrong idea about refinancing. Im in the middle of filming for my personal financial-management youtube series, but I spent some time in this nice morning (morning sun is good for lighting) just to prove you wrong.
The fact of the matter is refinancing is a financial move with a lot of flexibility:
a) you can reduce the installments paid by extending the tenure
b) you can borrow from the bank for the cash-out portion at the lowest interest rate possible, no other loans that are available to the general public have lower interest rates than a mortgage. Many people use this money for other business and investments that are yielding higher returns than what the bank charge as interests. This is called leveraging on your assets instead of sitting on it. Whether or not to do it depends on you, but there shouldn't be 1 true way to go about it.
c. You can shorten the tenure, but paying the same installment amount if you can lock in a good interest rate
d. You can maintain the tenure and pay lowered installments (like what I am going to show below)
The idea is that refinancing is flexible, and depending on your situation and the economic conditions, you should take the move (or not) as you see fit. Only a stubborn person would think that there is only 1 true way of doing things without considering the situation of others. My job is to listen to my clients and give them options based on what I know and what is available to them. Your job... apparently is to chatter like a [redacted] about the first thing that appeared in your head without contributing anything to solve these people's financial problems.
I work with solutions, those are what the world needs, not needless loud mouthing. Sorry for being rather personal but someone here never bothered to hide his (or her?) hatred towards financial consultant either. Don't dish it out if you can't take it.
--- --- ---
I will start with these numbers:
Initial loan RM200k
30 years tenure
Interest at BLR - 1% as per what TS mentioned
*Do note that I work with my clients closely and I would ask them for their loan statements, without which would be difficult for me to know the total installments paid over the years due to the changes in BLR. But for the purpose of our education session today, the BLR in 2005 was 6.00% but increased to 6.75% in 2007, and hovered around that number and ended up as 6.85% today. As such, whatever outstanding balance stated below cannot be accurate altogether. But that is why you need a consultant to go through these numbers for you and present it in the way that you would understand.
Now, let's refinance based on the remaining balance + cost of refinancing
Results, comments, and conclusion:
a. The tenure (in this case, to please the uncle) has not been changed. The loan remains to end after 360months (30 years) on December 2034.
b. The installment has changed from RM1179.88 to RM1086.10 (including the cost of refinancing) from the 121st month onwards till the end of the loan tenure. This move lowers your installment by about RM100 a month, without extending the tenure. Why would you want to pay RM100 a month to the bank? Because uncle said "no need to refinance"?
c. Here is the total savings:
You would save RM22,508.66 in this particular case. Of course, every person would face a number of different situations. To refinance or not depends on your needs, situation, and ambition. And I work with my clients in finding a solution to your needs or problems. Have a good day.
Good job nice effort.thx very much.The fact of the matter is refinancing is a financial move with a lot of flexibility:
a) you can reduce the installments paid by extending the tenure
b) you can borrow from the bank for the cash-out portion at the lowest interest rate possible, no other loans that are available to the general public have lower interest rates than a mortgage. Many people use this money for other business and investments that are yielding higher returns than what the bank charge as interests. This is called leveraging on your assets instead of sitting on it. Whether or not to do it depends on you, but there shouldn't be 1 true way to go about it.
c. You can shorten the tenure, but paying the same installment amount if you can lock in a good interest rate
d. You can maintain the tenure and pay lowered installments (like what I am going to show below)
The idea is that refinancing is flexible, and depending on your situation and the economic conditions, you should take the move (or not) as you see fit. Only a stubborn person would think that there is only 1 true way of doing things without considering the situation of others. My job is to listen to my clients and give them options based on what I know and what is available to them. Your job... apparently is to chatter like a [redacted] about the first thing that appeared in your head without contributing anything to solve these people's financial problems.
I work with solutions, those are what the world needs, not needless loud mouthing. Sorry for being rather personal but someone here never bothered to hide his (or her?) hatred towards financial consultant either. Don't dish it out if you can't take it.
--- --- ---
I will start with these numbers:
Initial loan RM200k
30 years tenure
Interest at BLR - 1% as per what TS mentioned
*Do note that I work with my clients closely and I would ask them for their loan statements, without which would be difficult for me to know the total installments paid over the years due to the changes in BLR. But for the purpose of our education session today, the BLR in 2005 was 6.00% but increased to 6.75% in 2007, and hovered around that number and ended up as 6.85% today. As such, whatever outstanding balance stated below cannot be accurate altogether. But that is why you need a consultant to go through these numbers for you and present it in the way that you would understand.
Now, let's refinance based on the remaining balance + cost of refinancing
Results, comments, and conclusion:
a. The tenure (in this case, to please the uncle) has not been changed. The loan remains to end after 360months (30 years) on December 2034.
b. The installment has changed from RM1179.88 to RM1086.10 (including the cost of refinancing) from the 121st month onwards till the end of the loan tenure. This move lowers your installment by about RM100 a month, without extending the tenure. Why would you want to pay RM100 a month to the bank? Because uncle said "no need to refinance"?
c. Here is the total savings:
CODE
Total installment paid by refinancing from the 1st month till 360th month:
= [Total installments paid from 1st to 120th month] + [total installments paid from 121st month to 360th month that is after the refinancing]
= [RM1179.88 x 120 months = RM141,585.6] + [RM260,663.21 (as per the calculation poster above)]
= 141585.6 + 260663.21 = RM402,248.81
= [Total installments paid from 1st to 120th month] + [total installments paid from 121st month to 360th month that is after the refinancing]
= [RM1179.88 x 120 months = RM141,585.6] + [RM260,663.21 (as per the calculation poster above)]
= 141585.6 + 260663.21 = RM402,248.81
CODE
Differences in total installments paid between refinancing midway or maintaining the old loan: RM424757.47 - RM402248.81 = RM22,508.66
You would save RM22,508.66 in this particular case. Of course, every person would face a number of different situations. To refinance or not depends on your needs, situation, and ambition. And I work with my clients in finding a solution to your needs or problems. Have a good day.
Between just leave the sakai alone..dun need feed it as it appear in every thread promoting sakainess expertise.
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