HI, just want to share and explain in detail what is call refinance property loan. This is the example show as below :

1. property market value at 500k
2. outstanding loan is 200k
3. margin of finance is 90% of the market value

so, 500k x 90%= 450k.

450k-200k=250k

so after refinance his loan structure will be show as below :

1. housing loan : 200k
2. cash out (OD): 250K
---------------------------
Total loan : 450k

there is some reason why client wanna to refinance their property show as below :

1. standby fund for future use.

2. for education

3. to transfer the existing property ownership to other person

4.to debt consolidation existing loan into one account such as credit card, personal loan or car loan.

5.business use.

I would like to ask also.

If I loan 450k 35years to buy a house, and monthly pay let say RM2.5k.

Next 2 years, the house became 700k. I refinance it. and I got this extra RM250k right?

So my monthly repayment will be more than RM2.5k right?

So when is the best time to refinance?

For sure.
The new monthly repayment amount and schedule will be based on the 700K loan.

When interest rate is low.
Eg.
Last time you sign up a housing loan of fixed 7% interest rate.

Now interest rate is 5%, you refinance it, to repay all the old loan of 7%, and start a new one at fixed 5%.
The 2% interest cost saving can mean a lot over the long term.

Refinancing may incur additional documentation fee, range from lawyer fee, admin fee, or old loan penalty charges etc.

the best time to refinance is when your property market value is increase. Also, now is the best time to refiance cash out for standby.

now subsales property market also slow down alot. When the owner wanna sell their property but no buyer wanna buy due to some reason :

1. down payment for deposit

when you buy subsales, you need to pay 10% downpayment from your own pokcet. Nowadays many people prefer to buy under construction project because some developer give discount, so no need use own money and can save it for renovation or buy furniture.

2. house defect

old house surely will have some defect because the age of property is old, so need to folk out money to do renovation.

3. owner sell higher than market value

when the house owner facing the problem above, they can't sell their property, so what they will do? refinance their property cash out first then standby for future use.

based on your case senario,

700k x 90% 630k

630k-450k= 180k

you can cash out around 180k. however, refinance to cash out money got 2 type. one is term loan, another is overdraft.

cash out in overdraft ,you may need to pay your new housing loan installment amount let's said remain at 2.5k. but the cash out portion of 180k, if you didn't use the money at all, there is no interest charge and no need to pay single cents.

cash out in term loan, you may need to pay your new housing loan installment amount let's said remain at 2.5k. And you need to pay the installment for 180k, let's said RM 1k per month even you do not use the money at all.

thanks for your sharing your idea.

another reason of refinance your house is for restructure of your current financial debts.

this is real case from my client,

his salary worker and earning RM 6k per month and his current commitment show as below:

1. housing loan 1k
2. credit card outstanding 100k

for bank calculate of his debt service ratio will be 100k x 5% = 5k

so his current commitment is 6k per month.

Now he is very suffer because high commitment. So i offer him an option to refinance his property.

after refinance, he paid 1k to his housing loan and serve the interest payment only of his 100k ( 594) per month.

so compare the cash flow , he got additional of 4406 cash on hand and he can be relax at this moment.

however, he still have to repay back the 100k in time of reach his age 60.

if you guy's need any advise on refinance , you are welcome to ask and i will try my best to assit you.

Refinancing always confuses me...but I think I'm slowly getting it

Basically getting more money in hand to do those activities mentioned above but at a higher interest over time (which they don't care since present moment is more important), is this correct?

You are correct. some of the client might not be concern on the higher interest rate because they just wanna to get cash out to settle their financial problem or for business capital.

Thanks for the clarification!

you are most welcome. anyone if wanna to inquiry about refinance you may drop the comment here.

I want to ask..... if lets say the person apply loan that time salary is 5K, Now his property market rate is 700K and he wanted to refinance. Lets say 2 years difference and his salary is 6K only....
my question is, is the bank going to re-evaluate base on his debt service ration?

How do we know our property value has increased? check from Iproperty? But iProperty seems not accurate one....
please advise.

I dont really get you of the 4406 cash and 594 per month.
could you please explain?

Bank always reassess the repayment ability of the borrower.

Refinance - Last time you bought house with loan 350K (now appreciates to 700k), you refinance at the outstanding 350k, generally bank won't be questioning too much.

But if want to refinance at 700K, aka extra 350K cash out for other usage, for sure, bank will need to re-evaluate the debt service ability of the borrower as outstanding borrowing escalated from 350K to 700k, and monthly repayment amount escalated too.

Bank get the valuation through registered property valuer, whereby there is fee needs to be paid, if one interested to get the exact market valuation.
Alternatively, one can roughly know the valuation of property if one knows recent transacted price of your adjacent property of similar type and similar location.

Generally, market value - transacted/transact"able" price in the market at time being.

1. bank will check the borrower current income and current commitment to evalute the DSR.

2. normally banker will help client to check the property market value with bank's panel valuer.

3. before the guy do refinance, his monthly commitment is 6k. no matter how he still have to pay his commitment of 6k. After he doing refinance with taking an overdraft facility,monthly he can choose to pay interest only for overdtaft which is 594. so 6k-594=5406, which mean he got cash flow in hand of 5406.

Nowadays some of the Klang valley area like cyberjaya, market value was dropped so much. There is why is advise to do refinance base on ur current property market value to cash out money for standby use.

My current loan at 4. 9%. Loan amount 320k.
What is the interest rate now if I refinance the same loan amount?

You can get as cheap as 4.2%

for Alliance Bank housing loan refinance is around 4.47%. For cash out in Overdraft is 6.88%

Can get lower rate also. Probably 4.6 to 4.7

my property loan 99k, semi flexi conventional, 4.45% interest. haha

my property loan 167k latest rate 4.45. Balance 156k. Current property value 260k (neighbor sold last month). Now what is current rate bank offer? might want to refinance.

Currently alliance bank offer interest rate from 4.44% to 4.68%. If you got other debts such as credit card or personal loan, you can apply refinance loan under alliance one account, the cash out will help you to settle your credit card or personal loan. if you do not have any loan, you and cash out and standby. no use the fund no interest charge.

ok thanks

I wonder if cashing out additional money from housing loan to settle/consolidate one's credit card or personal loan, how does that pass their DSR?

Hi guys. What if the property value drop? Cyberjaya studio unit and saw many on bank lelong. Was thinking to change my mortgage to Flexi and the bank told me the solution is to refinance..

if property value drop, then there is no space for you to do cash out with refinance.

Thanks for the reply. Hmm ya guess I just can only keep holding it for the time being.

Hi TS,
my current house S&P is under me & my siblings names, siblings are all overseas, and house loan cleared already

Now planning to do some major renovation to the house, and get some cash for buying another property for investment

So if I'm to refinance, can I just get the loan under my own name only? bcos it's pretty hard to get the rest of the siblings to come home from overseas just to sign the agreements.

Lets say the property current market value is 1mil, can I just get a partial loan lets say 300k? 100k for renovation, and 200k for investment in other property?

sorry, really financing noob here, please help to clarify, thanks!

What is the total amount legal/lawyer fee if I refinance RM 250K?

you can apply the refinance loan under your name only which is the loan will beunder 3 party charge. However, even loan approved, during signing the loan agreement, your siblings still need to come back here to sign it.

estimated the legal feel will be around 7k.

haiz... that's almost impossible for now amid the covid-19 outbreak

seems my only choice now is to get a personal loan for the renovation...

but is that a good idea in this messy economic situation we are in right now?

think I'm gonna put it on hold first, having more cash less debt now is the way to go

Ya, too bad whole world is facing covid virus. That is why recently alot of client apply refinance to cash out for standby purpose.

usually how long it take to disburse for refinancing home loan? Currently at 1 month after sign bank LO and lawyer. Insurance also already approve.

Normally refinance will take around 3 month to disburse the loan.

noted. thanks

How about obtaining a refinance loan from overseas bank:
like below:
https://rhbgroup.com.sg/personal/home-and-p...efinancing-loan

Benefits: enjoy Singapore low interest rates..

What I want to ask is, what happens to the previous loan then?

Because SG banks don't communicate with Msia banks and share credit history..

is it then possible for a home owner to acquire a third Malaysian property by hiding the refinanced loan in SG bank.. i.e., instead of paying the 30% downpayment for 3rd prop, the home owner now is eligible for a 90% loan, since Malaysian bank can't see the SG bank refinanced loan.. to them, it will look like a full paid off loan.

This post has been edited by Liamness: Mar 10 2020, 04:13 PM

normally this is depend how many housing loan that you hold in your CCRIS record.

If I refinance the loan using overseas bank, then it shouldn't show up on CCRIS record, correct?
If I'm correct, the house loan should show as a fully settled payment.

and if it doesn't show up, then I can go back to loaning at 90% margin, right?

Hi, I just went to CIMB to ask if I can top up my home loan (I have 140k outstanding and home price is 450k) and the officer told me I still need to pay for legal and valuation. I thought to top up is easier than refinancing?

top up loan still need to pay for legal fees and valuation fees. legal fees will be base on the new loan amount.

example, top up new loan 100k, so legal fees will be base on 100k to charge
if you refinance whole loan, example existing loan 200k and cash out 100k, so is total 300k, then legal fees will base on 300k to charge.

also depend how many housing loan that you have in your CCRIS record.

Right now, I have two. So if i hide in sg one.. it will go back to one.

Hi, i have a housing loan few years ago with 90% margin of finance.

Today i have more than 2 housing loans under my name. If i apply for top up loan, will be 90% or 70% of valuation?

It will be 70% of the valuation.

my two loans were the legacy -2.45% from BLR rate

so effective lending rate is around 3.8%?

or am i missing something?

lots of banks offering elr at 3.85% that I don't want to miss out if refinancing

Hi, sir, your current interest rate 3.8% is consider good rate and no need to be refinance at this moment unless your intention is to get cash out.

Thanks! No need for cash out just double checking 💪🏻

Sometimes client request for refinance is due to want to transfer the house ownership to other party and another party wish to take up the loan via MOT, mean memorandum of transfer.

Example, parents age is old and retire with no income to support the loan. Hence, some of my client will apply the refinance loan via transfer their ownership of the house to their children and the children will become borrower of the loan.

Hi, i want to ask

1. Will ptptn affect my score for loan? Even though i can settle outstanding and get release letter?

2. How long for bank to release the money? (my house already fully settled)

3. Is that loan harder to get due to covid 19?

4. Will i-lestari affect my score?

1. Yes ... as long there is still outstanding during loan application.

2. Refinancing ?

3. No .. normal credit check applied.

4. No.

This post has been edited by mini orchard: Sep 24 2020, 06:05 AM

Refinance is good way to get yourself into unnecessary long term debts extension.

No 2. Yes refinancing

Ptptn is no issue for apply refinance provided got letter from ptptn to show u already restructure the loan or fully settle ur loan.

Normally will be take 2 to 3 month to disburse. Depend how fast land office respond.

Is depend which industry u work with. There is certain industry bank do not do the loan even u are employed or self-employed.

Every bank have their own scoring system and bank will not refer scoring fron ctos system.

any refinance loan inquiry are welcome to ask here.

I have this thought in my mind, my current house is quite run down after 20+ years. I wish to refinance and cash out for renovation. In this case, is it better to go with top up loan or refinancing it? I'm on the old BLR -2.4 rate. What is the wiser things to do?

you can apply for top up loan instead of refinance the whole loan. BLR-2.4% is depend what is your effective rate now. Now market interest rate is around 3% to 4.9%

I'm not very well verse on how top up loan work. Is there any example?

example, your house value at 500k, outstanding loan is 250k. Hence, Margin of finance is 90% which is 450k.
450k-250=200k

So you can apply top up loan for 200k. Subject to your house value and your income and commitment.

I see. well i need to check with my mortgage bank and see if they offer such instrument. thanks for your explanation.

Ya, u can check with ur existing bank for the top up loan.

Hi Sifus,

1. can refinance done on same bank? eg current loan PBB, refinance PBB
2. What is the maximum tenure refinance can offer? 35 years?
3. If refinance a fully paid property, what is the maximum tenure refinance can offer? 35 years?

Thanks.

1. you can try apply internal refinance with the same bank. Subject the bank fpr approval.
2. Refinance tenure is up to 35 years or age 70
3. tenure is up to 35 years or age 70

Hi TS. Is it advisable to get refinance/top up loan to purchase another property? Current property value is 400k, currently serving outstanding loan of 190k with 3.1% interest.

[quote=shetty,Mar 26 2021, 09:30 PM]
Hi TS. Is it advisable to get refinance/top up loan to purchase another property? Current property value is 400k, currently serving outstanding loan of 190k with 3.1% interest.

[/quoyou may straight away apply for housing loan instead of apply refinance or top up loan.

for those who would like to know more about refinance, feel free to drop your comment here.

Dear Customer,
Looking to buy or refinance your HOME? We have the right financing solution for you! Enjoy the
rate as low as 2.90%* p.a. with Alliance Home Loan/Financing!
Talk to me to discuss your financing needs.
Leave your contact now and I will contact you.

Hi do you serve Sarawak based customer?

Hi, I serve klang valley client at this moment.

Hi,

I have an existing term loan with BLR - 2%.
Would like to ask for a better rate from the bank example to get - 2.x% ..
is the above request considered as refinance? My aim is just to have a lower interest rate only. And is the above request to reduce rate something normal to do?

Thanks for the advice from any sifus.

Your current interest rate will adjust according to market prevailing rate but is wont be similar to current promotion rate offered to new borrower.

If you want the new promo rate, you have to refinance.

There will be legal fees, stamp duty, valuation fee and mrta payable. Refinacing amount may be less than current outstanding loan depending on market value of the property and borrower have to settle the difference. Monthly repayment may also increase due to shorter tenure.

Hi, happy new year to everyone. If you are looking for home loan refinance may contact me or discuss here.

i got fully pay house right now i have debt problem dsr burst can use the house to refinance for debt consolidation?

Sure. Is depend on your current property market value. For example, your current home loan value at 200k, you can cash out 100k, maybe using it to settle other commitment like credit card or personal loan even car loan. Hence, your commitment will be combine into 1 loan account.

Hi, i have a question for mrtt. Once i refinance my loan, what will happen to my previous loan's mrtt? Will the surrender value be returned to me?

if your previous MRTT still got cash value. You still can get refund from the insurance company.

is refinancing interest higher than the conventional financing ?
a banker told me so..

Is depend on the bank loan interest rate package. For home loan interest rate will follow the existing rates. For cash out portion for debt conso is higher than home loan.

hi TS thanks for the informative thread as this is something not everyone is well versed on

just curious those MRTA MLTA is fixed correct? as in you cant change or amend/reduce how much premium paid per year

if theres no financial problem but still wana get the money worth on the property is it wise to refinance say after a few years or do we need to ask for how much is the market currently to see the bigger picture or is there an XX year where refinancing is more worth

you are most welcome.
MRTA already is a fixed amount during loan application for loan coverage amount or we call it as face amount. the insurance coverage will be reduce for every years and depend how many years for the loan coverage.

normally client can do refinance and cash out as standby use.

As long as property market value got increasing and there is enough room for cash out and match the client cash out amount then will be good to process.

some property more than 10 years, market value increase like 50% to 100%. some new completed property within 5 years, maybe is drop 10% to 30% also.

hope the info above can help you.

Another good use case on refinance is when you want to buy oversea properties. But you can't borrow there OR interest rate there is higher than here...

I know someone who already paid off his current house...but decided to refinance his house to buy a property in Australia

this loan process is call remortgage. Max margin is 70%.

happy new year 2023A. feel free to ask for refinance matter here and i will advise it accordingly.

Happy new year.

Thanks for the informative thread Pac. Learnt a lot.

I have a question. In a case of a buy-out from a joint purchase between two people, what is the breakdown of the portion for buy-out? Does it go back all the way to the 1st installment? Initially, everyone contributed 50:50. The other party will pay 100% of the loan but still within lock-in period of 2 years due to SPA being signed just over a year ago. Transaction is purely business. No personal relationship.

Appreciate your feedback on this. Thanks

happy new year. in your case, if you don't mind to pay the lock in period penalty charge then you can reapply the loan. Is depend which party want to buy back the another 50%. im not sure the other party will pay 100% by cash or will apply under loan.

lets said the other party want to buy the 50% from you and he wish to get the loan, then he will need to apply refinance loan.

Let say the other party wants to reapply loan instead of cash to buy me out, what will I get back from this transaction?

this is the deal between you and the other party. since he buy 50% share from you, meaning you can get 50% money from the price.

Hi TS, I have question and need opinions from you. I am still a noob on this.

Details.
1) Property valued at RM460k
2) Effective Rate - 4.30%
3) Outstanding loan - 284K
4) Monthly repayment - 1.4K


Question
1) What is the current rate if I were to refinance ?
2) Will I be able to cash out and how much will it be if I can?
3) What will be the repayment amount with the new interest rate for say 30/35 years? OR if I were to keep my monthly repayment at the same price (RM1.4K), how long will the loan tenure be?


Thank you!

Hi, current rate is around 4.1%
Cash out will be depends on ur current home market value , margin will be up to 85%,cash out will be . 391k-284=107k

Tenure will be 35 years or age 70 which ever early.
Let's said tenure 35 years , after refin , installment will be around 1275 for loan amount 284k.

Thanks for the sharing. If this is the case, is there a refinance work that I do not wish to cash out but just to get a better installment/shorter tenure? If yes, how will my payment look like then?

Repayment is around 1275 as per mention previous replies ya.

Hi may I know, lets say after loan approved for refinance, do I need to go land office to settle or bank will settle it?