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.

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.

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.

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

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.

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

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.

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

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.

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

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

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

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.