Hi guys, need advice on what options do I have if I wanted to stop my home loan but I could not get a buyer for the house.
Can I discuss with the bank on how to get the property auctioned off and I convert the difference (if auction price can't cover the remaining loan amount) into a personal loan to clear the amount off?

My current property is still tenanted but the rental amount is not enough to service the loan.
So I was thinking to just get rid of the property instead of keeping it and continue with the hassle.

I do realise that it was a big mistake to begin with for getting the property so do not need further "lectures" on that topic!

1. How much to top up from rental to bank instalment monthly ?

2 How long have you been holding the property ?

3. What is the estimated selling price now ?

4. How much is the outstanding loan ?

5. Any arrears in instalment ?

6. Where is the property located ?

If going for auction, Bank will have to do the valuation. You also need to think about there might be no takers for a few rounds and each unsuccessful auction will drop the selling price by 10%?

Some banks directly drop more % to attract more bidders too.

Check with your bank and see what's their Financial Relief Scheme.

Example from Maybank:
https://www.maybank2u.com.my/maybank2u/mala...ief_scheme.page

Can be done but you need to discuss with the bank. The problem is if you can't find the right officer in the bank to sit down, discuss and help you, it won't be approved. Normally bank officers won't prefer to do this kind of work because no incentive for them to help you. The marketing staff when you first obtained your home loan has commission and bonus to get you to sign on the loan, that's why the service is better.

This is why when you small fry, no one cares about you. But when you owe the bank RM500m, the bank themselves will try their best to help you restructure your loan, because the big fry's loan is a big portion of their books.

So I stop trying to be so negative. Try to talk to bank ahead of time of your intentions and find the right officer. And also try to sell/auction your house for the highest amount

This post has been edited by e-lite: Dec 1 2020, 02:12 PM

Poor decision to do so.

Best if you add value to the property to increase the rent, do room rental or other methods to decrease cash bleed.

Negative gear for the medium long term (for long term capital appreciation - provided... you bought the right location), or move in yourself (value in use)

Then sell it off in time.

if you are willing to sell at low price, try engaging private auctioneer. The fees are higher than engaging a REN but for private auction, sometimes it able to sell faster.

There are too many auction now and it is not really helping your case.
The auction will reduce the value of your property in stage, and some can go as much as 50% of the original developer price.

Now add in whatever fee the auctioner, legal and misc fees that going to eat up whatever you earn from the sales.
If rpgt is applicable, that gonna hurt the bottom line.

When everything settles down, you might be seeing more than 50% losses than what you paid for the house.
Dont forget whatever penalty by the bank because that might be deemed as early settlement?

All in all, gonna be a huge loss.

Try to make your house more attractive to get better tenants.

Thanks for the advice given guys, much appreciated.
I have had this property for the last 4 years and been serving the loan diligently with no outstanding but recently it's feeling more taxing to manage this property, from getting the tenant to upkeeping the house condition.

I have been trying to keep the momentum going and stay positive in managing the property while maintaining the value of the place and attracting good tenants.

Anyway, I think what I'm hearing the most here is for me to reach out to the bank to start discussions to see what options they have. Hopefully being a good paymaster all these years will be an advantage.

1. ~RM900

2. 4 years

3. 420k+/-

4. ~RM470k

5. None

6. Service apartment in Shah Alam

I understand your frustration that what you are doing now doesnt bring value and to add further, you are 'paying' the tenant to rent your place.

You approach the bank to discuss how best to reschedule your loan but it will only be temperoraly. So in the long run, sell it to reduce whatever stress as I dont think property prices will turn around for highrise in the near future plus more will be added which gives further competition to existing units.

Selling yourself or through agent is better option than through bank auction but you need to have the ready cash to pay the difference to the bank b4 title is given to the buyer. You can try to apply for a standby personal loan to cover the estimated shortfall, if you qualify.

Using bank auction route gives you poor credit rating for future loans. Expenses for selling will be higher ... legal fees, valuation fees, auction fees etc and starting bid price is about 40k less than the current market price you estimated....about 380k.

So whichever route you decide, you still need to pay the balance of the loan ... just which is higher. I suggest you take the RM900 to pay the PL.

If your current living unit can fetch better rental, then exchange.

An auction for a house it's pretty tricky. You can either win lots of money or you will sell the house for scrap because you will not have many bidders. Another important thing to keep in mind it's that the bank will evaluate the house and of course that they will give you a small number. If the house it's worth 200.000, they will give you 125.000 or something like that. I would suggest you take a loan from a bank that you can trust. Personally, I've been using Finpedia since a friend had recommended me to try it and I satisfied so far. Of course, there's no perfect bank, but you have to find one that's good