Hi guys,

With the subprime issues in the US and upcoming UK, many homeowners are facing difficulties in servicing thier loans and such. There could be many reasons why they default in thier loan, one of the reasons could be the rise of interest rates and inflation. Fluctuating interest rates may exhaust your financial resources as an increase in monthly instalments can be a burden especially when other costs of living are on the rise too. Although some financial institutions do not increase your installments, when the interest rate rises, the duration of the loan is extended as your installments are insufficient to cover the increased monthly interest which will eventually increase your principal loan outstanding.

Hence, would you guys be interested to know more on how to lower down your monthly instalments with a Pure Fixed Rate Home Loan Package? Now is a good time as the rates are at its lowest indicating an uptrend over the long run. Just provide me with the details below. Also applicable for new purchases of completed properties and selected under construction properties.

1. Current Monthly Instalment you're servicing.
2. How long have you been servicing the loan and How many more years to go.
3. Initial Loan amount and Current Outstanding Loan amount
4. House address, purchase price and estimated current house value.

Just drop me a pm with the above info or email me at tzeyean82@yahoo.com and I'll get back to you asap with some quotes on how to lower down your instalment.

Also, here's a few helpful links for those interested to know more about how Fixed Rate Home Loan works.

Fixed Rate Home Loan Faqs
Guide to Choosing a Home Loan

Thanks, Best Regards.

PS: Mods. Kindly delete this post if it violates any T&Cs for posting. Thanks.

This post has been edited by Zarth: Sep 25 2007, 01:29 AM

Do u charge us $$$ for 'helping' us to reduce our interest payout?

Dear Pai,

The quotes and consultation is completely FOC. The costs that home owners should consider before refinancing are the new loan documentation fees, the penalty fees if the loan is still within the lock in period and also fees for mortgage insurance and home insurance if any.

We have a limited offer period of Free Moving Cost for loan amount >200k, meaning all the new loan documentation fees such as the valuation fees, professional legal fees, stamp duty, discharge and disbursements will be absorbed.

Penalty for lock in periods, and admin fees to the developer and such are excluded.

Hope that answers your question.

Thanks. Best Regards.

This post has been edited by Zarth: Sep 23 2007, 06:52 AM

Ic.

Im guessing u r from either AIA or ING. For ppl with very low risk appetite, than your loan might be a good offer for them.

Personally, I would advocate homebuyers or investors to go for fixed 3 or 5 years instead. There's strong chance that BLR will go lower than 6% after 5 years, so why pay more

zarth,

the example that you use.. relating the subprime to the interest rate.. can actually backfire on your offer here. (it's not smart to use the subprime as an example in this case)

1. the subprime issue is not just solely on interest rate.. it's way beyond that.

2. properties' prices have gone up tremendously in some markets, so if something like the USA can happen.. it can also happen here in Malaysia. this brings us to think.. why buy now?

3. interest rates going up or down can be a guessing game.. Pai forsee it going down, that's probably on the economic point of view. how about if inflation pushes things up so much.. that administering a higher interest rate is the only way to go? either way.. with the mess in USA and UK, it's hard to forsee..

"forsee" not on taking which loan package.. but the very act of purchasing a property right now, in the near term..

Dear Lwb,

Thanks for your comments. Reason I quoted that is exactly like you put it, it could happen here. Did the Feds cut the rate before it actually happened or after? Isn't prevention better than cure?

1. Yes I totally agree, as I said earlier, there are many complex reasons. One of it could be the interest rate / inflation factor.

2. Very true, but I started the thread focusing mainly for those whom is currently servicing a loan at a high interest rate, hence Refinancing to lower down your instalment. For those whom is planning to buy houses and can't be bothered to wait, it could also be an option for them.

3. Its not really a guessing game. Historicals can show that Interest rates in on the uptrend in the long run. People can speculate all they want for the short term period, weather its gonna go up or down by a quarter/half basis point. What matters more is that 30 years down the road, you would have saved more on a Fixed Interest right now when the rates are at its low point than to speculate and refinance 2-3 times down the road by paying 2-3 times the legal and adminstrative fees.

Again, thanks for your feedback.

The more visible entrance by Insurance companies in the housing loan market in the last few years has always amaze me. Actually insurance company has been giving housing loan for ages, but on selective policy holders / contacts only previously not openly to public. The entrance is good to consumer and it provide great competition to the banking sector. Insurance companies has an advantage in the sense that their 'depositors' (ie policy holders) are more in the long term, hence allowing them to lock on to a more illiquid cash reserves unlike banks who relies mainly on a more short term deposits. Thus the capabilities of insurance companies to offer fixed rate is stronger than the banking sector.

On the downside, however, most insurance company requires their 'customer' to take a policy (eg MRTA and Term Life Assurance) with them in order to get the loan. While this may be a turn down factor to some, for others who actually requires the 'policy' it may not be a problem. Just prepare for this 'catch'.

the insurance package that's associated with the housing loan (originated by insurance companies) are quite expensive, imho.. (they're definately not a simple "term insurance")

currently, the interest spread is not too wide to justify a switch.. but to say that "Historicals can show that Interest rates in on the uptrend in the long run" is not true..

back in the pre-1997 crissis.. interest rates are double digit!! (today is half of that)..

here's a simple saying from someone.. "what goes up, will come down" (vice versa)..

Here's the BLR chart for the past 25 years. Hence the reasoning behind why the rates is on an uptrend in the long run.



Yes I totally agree with the saying whatever goes up will come down, but in the economic point of view, whatever goes down will come back up as well. Since we are currently in the bottom cycle, what are the chances of it going down further? and what are the chances of it going sky high?

Another idea to ponder is that, would you have a higher chance of facing difficulties in servicing your loan when the rates go down or when it goes sky high?

Know where the bigger risks lies and protect yourself from there.