Hi,

How do I go about buying a house from an individual owner. Say the hose is 800k. My takaful is 500k. Which bank give best rate? How to go about this? I have takaful up to 500k. Can I use that as MRTA. I think single name is better than combined name? I am working in the goverment sector so can get goverment loan. I am not planning to pay more than 20 years of loan and looking for variable pay rate (pay early no penalty). Does such product exists?

Once you agreed on the price with the seller, straight away appoint a lawyer to act for you. Your lawyer will follow up from there until the completion of purchase.

If the seller has his own lawyer, both lawyers will see to the completion of the process. Sometines, seller may not engage a lawyer but may use the services of your lawyer. Then leave it to your lawyer to deal with the seller. In good practise, is better to engage own lawyer so that individual interest is protected.

Sometimes, a seller may want a deposit from the purchaser before proceeding with lawyers. It can be few thousands but negotiable. Then you need to prepare a letter to be signed by both indicating the purpose of the deposit and what happens if one party wish to terminate. Have a witness in the letter to confirm the transaction.

Paying a deposit to seller can sometime be dangerous if purchaser do not know the background of the seller and the property. On the hand, seller is worried that the purchaser may change his mind after negotiation and he may have another person who is interested.

So is up to the purchaser how he can convince the seller to go to the lawyer office to sign the deal. Meanwhile, you should have a lawyer ready and can act for you immediately.

If you decide to take the govt loan, you have to inform the seller because the time process is longer than normal bank loan....it can go as long to more than 6 months compare to 3 months bank loan.

If you are eligible for a single name borrowing, then is better to have one name. You can make all the decisions relating to the property. If you are married, then is better to discuss with your spouse because some spouse dont take likely to the single arrangement.

Since you have intention to settle the borrowing early, is better to go for bank loan which gives you tbe flexibility.

Some banks allow borrower to have own arrangement for takaful but with slightly higher rate.

Shop you loans with few banks and compare their tnc.

Lastly, your cost of purchase for the property will be around 4% + of the purchase price.

The lawyer comes from a third party firm or when I go to to the bank to get the loan?

You find your own lawyer for SnP and ask him whether he is under the bank panel where you going to take loan so that he can also do the Loan Agrerment. Otherwise you need to engage another lawyer for that if the bank dont allow adhoc application as panel lawyer

MRTA is associated to the house, not your life insurance.

Ok
Thanks

MRTA is also a life policy .... just that the coverage reduces with time compare to MLTA or normal life policy and the premium is cheaper plus a one time premium payment.

One can also buy a mrta policy without buying a property.

Any life policy coverage that exceed the loan amount can be use as 'collateral' for a loan.

Depending on banks, some may require the borrower to do assignment in favour of the bank and in event of an occurance, the bank will receive the claim money first and whatever balance goes to the next of kin or nominee.

Some banks dont make mrta/mlta compulsory for a loan. They leave it to the borrower to decide how he wants to take the risk of borrowing. In the event the borrower pass away and the loan cannot be settled, the bank would just proceed to auction the property.

This post has been edited by mini orchard: Dec 13 2021, 08:22 AM

I see. My friend told me that since everything is negotiable, even the same banks can offer different types of perks/interest to customers.

Will depend on customer risk assessment and loan amount.

This post has been edited by mini orchard: Dec 13 2021, 08:15 AM

I see. Thanks

May I ask, what document seller will give to buyer for lawyer and process and applying loan.

1. If the seller is engaging a lawyer, then your lawyer will have to deal with his lawyer for all documentations, or

2. If the seller is not engaging a lawyer, then the seller has to give buyer or his lawyer a copy of the title or SnP, if is without a ready title together with all registered owner IC.

This post has been edited by mini orchard: Dec 25 2021, 08:58 PM

May I check the title mean the strata title right?

Yes.

Thank you. Appreciate your quick answer.