Well, it is announced that the money Account 2 can be used to pay monthly installments. But say I earn 3K per month, how much money is actually going into my Account 2 every month?

Usually, nowdays S&P and legal fees are borne by the developer. Any guarantee the developer gonna pass down the stamping fees' saving to purchasers?

Monthly income: RM 3k
EPF monthly contribution by employee at the rate of 11%: RM 330
EPF monthly contribution by employer at the rate of 12%: RM 360
Annual contribution is RM 8280.

Let say Account 2 amounts to 40%: RM 3312 (RM 276 monthly) or if 30%: RM 2484 (RM 207 monthly)

This post has been edited by David83: Sep 8 2007, 07:25 AM

hmm, this is indeed an interesting question.

tht will help lessen the house loan installment burden,.....

hmmm... not yet read the budget....
anyways, will come back to this topic after tomolo...
hehe

what david mention is correct.

most probably low cost housing will have better take up rate...

I'm eyeing for a low or medium cost housing project.

low or medium cost housing project has risk of getting similiar class of buyer / tenants, becareful...

I can't get you. Similar class of tenants/buyers? Meaning?

What needs to be caution?

usually way kind of ppl stay in low cost house? the environment will b like tat

Then if you buy high end or range condominimum, those stay at there will be majority same class of tenants too.

Well afforadable families, professionals and etc.

Very good advise

While low cost properties can easily yield min 8% returns, the risk are huge as well, and often not worth the nightmare. U'll most likely meet ppl who'll destroy your house, run away with 6 months unpaid rent and even try to chop you when u scold them for rental delays in low cost properties. Again, not all low cost tenants will behave that way, but the likelihood is higher compared to medium cost - high end properties, as the affordability level is different.

I suppose for entry level investors like me, any props above 100k is a safe starting point

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Added on September 8, 2007, 1:15 pmtechnically, I'd say about RM240 goes to your account 2 every month.

my take on the topic, we'll see a boom in demand for low-med cost properties. Figure wise, the properties ranging 100k-500k will most likely be the biggest winner from our 2008 budget.

All is good

This post has been edited by Pai: Sep 8 2007, 01:15 PM

i mean low cost property will get low cost tenants which give u high posibility of destruction of ur property or delay in rental payment...

it's RM250K below....

Housing loan scheme won't affect EPF earnings

PUTRAJAYA: The freeing of RM9.6bil in Employees Provident Fund contributions to pay for the purchase of homes by the public will not affect the earnings of the body.

Second Finance Minister Tan Sri Nor Mohamed Yakcop also put paid to fears that this mechanism to make it easier for every Malaysian to own a home would lead to those retiring not having enough funds to cover their expenses in the future.

"The purchase of a home is a good form of investment and not consumption.

"The buying of homes should not be put off by people until they retire. This is because the prices of homes would have appreciated so that by then, these would be too expensive.

"Housing is the one thing we want all Malaysians to have," he told reporters in a briefing on the Budget tabled by Prime Minister Datuk Seri Abdullah Ahmad Badawi in Parliament on Friday.

Nor Mohamed said EPF had indicated that it was very happy to assist with the Government's announcement to let contributors use the amount in Account 2 to offset or pay their housing loans.

This means that a working person with a salary of RM2,000 can use the RM138 estimated to be the monthly contribution to Account II to offset the housing instalment.

"This mechanism will enable a lot of people in the lower and middle income group to own their own or even second homes," said Nor Mohamed.

EPF posted a gross investment income of RM13.3bil in 2006 and an asset size of around RM290.2bil, with around 11.4 million members. It also recorded total contributions RM26.2bil.

URL: http://biz.thestar.com.my/news/story.asp?f...53&sec=business

In the first place, there aren't many residential development, landed or non landed that falls below the RM250k range. Most residential projects in Klang Valley are above RM250K. I feel that G should increase the range to RM400K. Nowadays, to buy an intermediate terrace house can easily reach up to RM300K. If I am not mistaken, a couple of years ago, the G actually provide free stamp duty for purchase of home by individual. It is actually a half hearted attempt to give 50% discount on stamp duty and even worse, many people won't be entitled cause we can't find a residential home that cot below RM250K.

Personally, I feel allowing us to use our EPF to fund our own housing loan it a double edge sword. Besides EPF, how many of us has allocated savings for our golden years. Why can't the G give actual incentives like, lower income tax (weird only company enjoys tax reduction in 2008 budget) & abolish stamp duty.

In some countries, the banks have also knows that one generation might not be able to pay off a house loan. They have actually allowed 2nd generation loan to span more than 40 years, which would indirectly decrease the prepayment montly amount but increase the interest over the duration of the tenure.

I do acknowledge many of use would love to complete our housing loan as soon as possible, but with cost of buildings increasing as well as living expenses, not many of us can afford to continuously make such payment.

This post has been edited by dchk: Sep 9 2007, 11:51 AM

i have no experience in house purchase...but monthly withdrawal vs yearly withdrawal..will that make a big difference?

one thing need to take note is how easy it will be for us to withdraw the money monthly? if it's easy, then maybe worth it...
but if it's cumbersome...then some ppl might not wanna do it monthly...imagine wasting your time going through the purchase to do monthly withdrawal...

monthly EPF withdrawl will ease your monthly loan payment. E.g. RM200 from monthly EPF will help you on your RM1000 per month installment. Instead of paying RM1000 like normal, you pay RM800 + RM200 from ur EPF.

Yearly will tend to decrease the principle sum of your total loan..

Agree.

Monthly EPF withdrawal will help in the monthly loan repayment.

Any idea when this system will/would be implemented?

is it apply for car loan also ?

Cannot ... house loan only!

Just for sharing...




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EPF withdrawals to go into members' bank accounts

KUALA LUMPUR: The EPF monthly withdrawal for reducing housing loans will be credited directly into the contributor's personal bank account and not to the lending bank.

Second Finance Minister Tan Sri Nor Mohamed Yakcop said the money could then be used to either help offset the housing loan instalment or for the contributor to afford a bigger or more expensive house.

"It is a simple mechanism. For instance, let's say your monthly salary is RM2,000, 30% of your EPF contribution will go to Account 2.

Your monthly housing loan repayment is now RM500 and you can use RM138 to offset the housing loan instalment. The RM138 will be credited to your bank account every month.

"In another situation, you are thinking of buying a house, but you can only afford to pay RM400 a month. With RM138 withdrawn monthly from EPF, you can afford to buy a bigger house and pay RM538 monthly," he said.

He said contributors needed to go to the EPF to apply for the monthly withdrawal only once, and it would directly credit the money to their personal account every month.

"The condition is that the contributors must have a housing loan," he added.

Nor Mohamed said the RM9.6bil that would be taken away from the EPF to be put into the contributors' pockets every year was good for consumption-led growth.

On worries that the monthly withdrawal would be subject to abuse like the EPF computer withdrawal scheme that was a flop, he said: "Let them use the money. It is all right. The money is in their pocket. But they must have a housing loan."

"There are no worries. For the computer scheme in the past, some contributors bought computer slips rather than computers.

"In this case, there is no downside. They cannot cheat. We can check with the bank if they have a housing loan. A person who doesn't have a housing loan won't be able to withdraw his savings from Account 2," he added.

Nor Mohamed was asked to elaborate on the EPF Account 2 withdrawal scheme for monthly housing loan repayments after delivering his keynote address at the Malaysian Newspaper Publishers Association's seminar titled "Making Sense of The Media Collusion" here yesterday.

Last Friday, Prime Minister Datuk Seri Abdullah Ahmad Badawi, when unveiling Budget 2008, announced that the Government would allow EPF contributors to make monthly withdrawals from their Account 2 balances to pay off their housing loans from Jan 1.

He said the move would benefit five million active EPF contributors.

He said it would also enable them to own better houses and lessen their monthly financial obligations.

Nor Mohamed said if there was a change in the loan status, the bank could let the EPF know about it.

The EPF said it would announce further details on the matter in December.

URL: http://thestar.com.my/news/story.asp?file=...=nation&focus=1

Made a chart so people will see what's the max amount they can withdraw from their EPF to pay the housing loan.

Most people can afford their housing loan even without the EPF scheme (if not, banks wouldn't approve the loan right ?), now the question is should they withdraw their EPF to pay the loan ? The answer is yes. A smart investor will always use that money to generate better than EPF rate of return. More illustration can be found here


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any body know about free stamping fees???
effective date 1st jan or 1st sept??

It's termed as budget for 2008, thus every announcement during the budget report would start implementing starting January 2008 unless broadcast otherwise.

WAKE UP !WAKE UP! KNOCK !! KNOCK!!

Do you guys really think this Announcement is great!!!
the Rich getting Richer which is TRUE.

They want our EPF money to convert into Liabilty for LIFE and leave us POOR for Life??
EPF is our retirement money and don't forget that the houses now were OVERPRICED!
Down the road, we may need money for HEALTH CARE PLAN or Payment to other HIDDEN BILLS till we DIE.

Why didn't they just lower the cost of Building Materials and built a cheaper Quality homes. If IKEA can Do That , Why can't Malaysia Govt do that? Is it because of JACKED UP PRICE again in the layers of corruption. Alot of people took this Budget Day and were happy with this plan..

Sorry, got to disagree with you.
EPF is retirement money for those who don't know how to plan.
That should be the correct term.

Again, if you are to plan properly; wouldn't you saving equivalent to your retirement?

House are priced high because the demand is there.
When there's no demand, nothing can be priced high.

boon is right, EPF is for those who cant plan their retirement on their own. If u think houses here are overpriced, perhaps u might wanna do a little research and compare our housing prices to places like S'pore, Bangkok, Jakarta, Shanghai or even Ho Chi Minh.

U 'd be surprised how much a decent condo will cost in these cities

I agree with Hackwire.
The houses are overpriced. But this is purely a supply & demand scenario.

If you go to the countryside often, perhaps you will have the same kind of feeling as me.
There's still a lot of land out there, cheap & not utilized.
So why should I fight so hard for the next 30 yrs just for a space of 2000ft²?

agree... i wish can EPF can b abolish.. can do alot of things wit those extra money..

hackwire,

You have X amount of money.

A) You can collect 4% to 5% per year.

Or,

B) You can collect 6% to 7% per year.

Is (A) or (B) a better choice??

If you choose (A) means that you left the money in EPF.

If you choose (B), you take the EPF money out to reduce your housing loan.

Do you want your money to make 4% to 5% or 6% to 7%?

That is the question.

Dreamer

B choice only if you are talking about well developed places... e.g. Penang, KL... I don't think other cities can get around 6-7%, unless we are talking about shop houses...

Everybody i just want you all to understand this.

Buying house is a good thing because it has higher interest rate for Landed Properties. Other thing need to consider is Leasehold properties and Bank Interest rate. Do you know that 30 years of investment is also depend on the Fluctuation of Loan Interest Rate?? Properties get old and prices drop too depending on location and classes of people.

Im talking of Steady Asset you own. Means you pay it by CASH and you own it NEW and living without any fear of DEBTS and been CHEATED by the DEVELOPER.

BUDGET DAY must be FOCUS on stopping the RED TAPES and Rules that protect buyers from losses after owning the property or paying someone IMAGINATION that became a white elephant. How many of you have encounter the promises by the Developer in their projects later to find out that their property does not have VALUE as claimed.

Retirement fund if use to buy a wasted property is throwing into the rubbish bin .

If by all mean you think its worth buying, why not if you have a passive income elsewhere. Let retirement fund in EPF buys you a better life in your afterlife like building a nicer cemetery on top the hillside facing the ocean. That i say is a good investment.

This post has been edited by hackwire: Sep 16 2007, 09:35 AM

The problem here is not about withdrawing EPF for paying housing installment.
EPF generally like I said is for those who doesn't know how to save for retirement.
We're not totally talking about investing in property only if you are to know what we actually meant. i.e. me, pai and dreamer101 (if I mistook you 2, than sorry).
Again back to the actual scenario.
You have already bought a property, and like you mentioned...the interest fluctuated like nobody's business over the years; so isn't it better to settle the mortgage first? Provided that you do not only rely on EPF as your "retirement fund". If you do, than sorry, I would classify you as those who do not plan for retirement.
Ok, back to the property you bought, you have to know for what purpose is that for. Your own stay or investment. You have to remember that you've already bought the property and servicing the loan repayment. Thus your long ramblings on cheated by developers and debts and overpriced and all is void as you have already committed yourself to the property.
For own stay, I would recommend faster settle the loan whenever you can; i.e withdrawing from EPF is a good choice.
But purely for investment; I would recommend leveraging and try not to use too much of own money. So EPF withdrawal for this case; no need.

Try to get into our head that EPF is not the only way to retirement which the Government tried to brainwash us.
One day when EPF got mis-managed, we're basically left with nothing. So why not do something on your own and rely on your own effort rather than rely on somebody else? Basic saving for retirement is a must besides EPF contribution!

This post has been edited by b00n: Sep 16 2007, 10:24 AM

well said . an eye opener but the question is ... how many people dares? The Risk is a stopper. Inadequate of investment knowledge can be a setback.

i think EPF is best use to start small business than buying a House that uses a lot of money . Again, buying a condo for investment is not a great decision. These days, rental rate is low , hidden cost is rising and cannot super cede the bank loan u take.

good location all snap up. If for investment, look for landed prop outside city and sometimes shoplots can be a lot better than condos due to higher turnover rate of tenant.

In the end, dare u takes risk.

Many EPF account holders will definetely not think twice anymore when buying new house. Everybody needs a ROOFtop but the Govt is helping them to invest in the nation economy by withdrawing its EPF . There are other means of Helping. Helping us to own a house can be in different form like creating an ECo-Friendly houses and cheaper labours without so many awarded contractors. How about DIY house ? Reduce land price so that we can puchase them to build an economic home.

They just don't want something different .

This post has been edited by hackwire: Sep 16 2007, 11:11 AM

guanteik,

You have a housing loan, If you pay off earlier, you save 6% to 7% per year. If not, you pay 6% to 7% per year.

Dreamer

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Added on September 16, 2007, 11:12 amhackwire,

We are NOT talking about buying a house for investment. Most people buy a house to live. And, they have a housing loan that they pay 6% to 7% interest per year. Given EPF is ONLY paying 4% to 5% per year, people could get a better return and save 2% to 3% of interest by withdrawing the EPF to pay the housing loan.

Now, which part do you NOT understand??

Most people are not rich enough to buy house for investment. They buy house to stay. Having a house that is fully paid off will make their retirement easier and cheaper.

Dreamer

This post has been edited by dreamer101: Sep 16 2007, 11:12 AM

Are you SERIOUSLY advising ppl to take out their lifetime EPF savings to start their own business?

U do know that EPF funds was intended to aid Malaysian's during their retirement years right?

While Im a big fan of risk takers and business owners, I certainly wont advise any Tom, D*ck and Harry to go and open business. In general, 9 out of 10 business fails within 3 years of business. Its a further evidence that running a business is not meant for everyone.

EPF installment plan is a leverage. How you want to use it it's up to you.

i think its a good deal. at least the interest is lower than the bank given.

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Added on September 17, 2007, 9:19 pmgood advise. 9 out of 10 huh. scary.


This post has been edited by hackwire: Sep 17 2007, 09:19 PM

Well, perhaps not that drastic.

I do agree, the FASTEST way to make you wealth disappear is to do business.

U know, like those 'bai kah zai' who spent all the inherited fortune. If he buy house, buy car, buy antique, buy jewellery. Those items still got value no matter how it depreciates.

But if he's 'stupid', listen to friends & invest in business. Few years can habis already.

being devil's advocate here, we need to be clear that the fastest way to build one's wealth is also through business. If u r good, there is no limit to what u can achieve