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 EPF Account 2 Housing Withdrawal, Professional Advice needed!

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TSbraden961128
post Jul 9 2020, 12:23 AM, updated 6y ago

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Hi Sirs/Mams , forgive me for being a property dummy but I have a few questions. icon_question.gif

1. Apparently EPF account 2 allows housing withdrawal for home loan.(why didn't I know this sooner rclxub.gif )
Is it possible to schedule a monthly automatic withdrawal from EPF Account 2 directly to my existing bank account that is currently tied to the loan? Or can I take the full amount at one shot to my bank account then later pay accordingly to relieve my monthly cashflow..?



2. I'm relatively new to KL and looking to buy a studio for residential purpose. Is studio considered a Soho, SoFo, SoVo...? If the price range is below RM300k, is it supported by government's initiative HOC campaign?






Thanks in advance!
TSbraden961128
post Jul 9 2020, 08:43 AM

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QUOTE(mini orchard @ Jul 9 2020, 08:03 AM)
My advise is ...... RENT .

" Or can I take the full amount at one shot to my bank account then later pay accordingly to relieve my monthly cashflow..?

Dont buy because of HOC. Easy to buy, difficult to sell.
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Thanks for the advise, but can you elaborate further why I should rent..?

Cause I'll be settling here and will need my own accomodation for the long run. Plus since I'm already paying rent, why not pay for my own property that might appreciate in the distant future....?
TSbraden961128
post Jul 12 2020, 12:17 AM

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QUOTE(mini orchard @ Jul 9 2020, 02:23 PM)
There are cost in owning a property ...

One time cost ..

1. Legal fees
2. Stamp Duty
3. MRTA (Life Insurance Policy)
4. Renovation.

Monthly cost ..

1. Bank loan interest ... amount can be more than or equal to rent
2. Monthly condo maintenance and sinking fund

Yearly cost

1. Quit rent
2. Assessment
3. Fire Insurance

Other cost

1. Repairs and upkeep.

Risk

1. Your purchase price may not increase or worst, lowered. Even 50k increase may not covered the bank loan interest.

EPF is meant for your retirement. If you take out from acc 2 now, there is not much left when you really need it when you reach 40 or 50 if you face another covid pandenmic leading to a possibility of bank auction.

If one find difficulty to pay monthly installment due to cashflow problem, then monthly income is insufficient to own a house.

Renting ..

The cost is the monthly rent.
If you having financial difficulty, renting a smaller or cheaper unit is an option. If you cannot pay the bank installment, your property will be auctioned off and you be back to renting.
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Thanks for the great advice, but the rental I'm paying ever year lets say 800/month would amount to roughly close to 10k a year. If I own the property and paying instalments(including bank interest) I'll be paying off close to RM10k of cost isn't it...?
TSbraden961128
post Jul 12 2020, 12:19 AM

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QUOTE(jeannie18 @ Jul 9 2020, 07:26 PM)
Usually EPF acct 2 is taken out as downpayment for house, not monthly installment.

FYI studio in KL now very hard to find below 300k. Now trend is 1br, or 2br units smile.gif

HOC 2020 only applies for houses from Rm300k to 2.5m
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Apparently you can either take out from your EPF Account 2 to pay for House's instalment or reducing housing loan. Choice is to withdraw one-lump-sum or monthly.

Thanks for the heads up on RM300k to 2.5m. I'll need to reconsider!
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