i've been offered this markup loan.
i'm buying this property for own stay.

when i first heard of this idea, i loved it as i could use the zero downpayment and put that amount elsewhere.

i've also read the other threads here about this mark up loan approach and i understand it is a grey area thing.

so here's the scenario, i can afford to pay the downpayment for this property BUT i would love to use that amount to clear off existing car loan.

hence, this mark up loan with zero downpayment sounds great.
my dilemma is, will there be any issues going with this approach in the future?
anything that i should be aware of aside from the higher monthly loan repayment?
or should i just go with the regular approach with 10%-15% dp?

i'm new to this and would love to hear more opinions.
thanks

thanks for all the responses.

potentially i would love to not dig many holes for myself aka too much commitment. that's why got the idea to clear off the car loan first.

noted on the quota.

noted

i see. that (bolded) is true also.
i will think it through again.

thanks but not yet purchase haha
only booking and stumbled across this markup loan stuff.
so a bit dilemma

yeah, will plan to settle in full for the car.
because the car is fairly new, like 2years

yeah most likely separate agreement. probably between dev and myself. i haven't reach that SPA stage yet.

thanks for the pointers.
i feel i really do need the money for other purposes.
that would ease my cashflow problems also (without having to pay for dp).

higher monthly installment and interest is really something.
i will keep in mind for the cashflow to roll the property.

that is a good idea to use for renovation.
the property will only be completed some time next year or the year after.

still got time to save up for reno and park the money elsewhere to get some returns.

Thank you. You are right on the free cashflow.

After I did some calculations, clearing off the car loan, frees up some cash on hand. The difference in monthly commitment between markup and non-markup loan is not that huge and can be covered by a portion of the freed up cash.

yup that is correct.
i guess a big part of the plan is just me shifting the money from servicing a car loan to the mortgage loan.

also because i feel i won't be able to clear off the mortgage loan as fast as i could with the car loan. somehow that made me feel the extra interest from the markup loan is not that impactful. not sure if this is the correct way of thinking...

According to my understanding and from what they have told me, the SPA should reflect the mark up price.

as for the other details, you may refer to post #14 (right below your post)

may I ask if this is common practice in property purchase these days? because is my first time heard of such thing.

and had to do a lot of digging to even know how it roughly works.

that's a good idea.
thanks

indeed, the overall scenario has a lot of variables.