I know nothing bout buying property so would really appreciate some advises here...I have no time to search online n read long article bout buying property tips...

Here goes,

1. I'm currently earning almost 3K n renting a condo for 800 bucks. Does my earning enough for me to own my place? I'm thinking instead of rent for 800 bucks i might as well get my own place. Is it rite? It'll be for my own living but i'll be renting the rooms out..like what i did now.

2. What are the fixed/ compulsory costs for buying a property? N how much should I prepare for these costs? Except the installment n renovation of course.

1. I think you should, if you can afford the downpayment. Just make sure that your monthly repayments doesnt exceed above 30% of your gross salary.

2. Prepare at least 15% of the property's price as your intial cost. If the property is 100k, you need at least 15k cash.

This might sounds stupid as i know it should depends on one's budget...But what is the repayment period ppl normally takes up to? Like car is between 5-9 yrs... Should not exceed 30% of my gross income is a basic requirement or an advise?

Have to prepare 15% so much ah!? Use for what?....if the condo cost bout RM200k means have to prepare RM30k

Is it compulsory for downpayment......???

This post has been edited by "@": Oct 26 2007, 02:47 PM

Loan can up to 20-30 yrs.
BTW the 15% of the unit cost, some of it you can get from EPF withdrawal to help you.

I'm thinking to throw my EPF for the downpayment instead.....

There's no such thing as 100% loan for property is it?

The debate is always about should I buy against should I continue renting.
So to continue, there's a few question you should ask yourself.
1)Do you have the downpayment? 15% of the property price is a solid one. Though one can always goes for 90% financing.
2)Buying new property is always a good thing for new house owner as there's lots of freebies and discount. But are you able to sustain the monthly loan repayment and also the rental of the current place while waiting for completion.
3)Look up the repayment and calculate whether or not you can survive with the current remaining money after paying the monthly installment.
4)Subsequent cost would be the renovation; how much do you afford or want to put in as renovation.
5)Are you going to stay in the place forever or are you planning to go back to your hometown or overseas in the next few years?

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Added on October 26, 2007, 3:05 pmIf you're asking it here, most of us would tell you not to get higher margin loan as when you calculate back the interest charges; it's a lot.....really a lot!
Unless you're planning to buy for solely investment purposes than go ahead, make full use of leveraging from the bank.

Btw, no such things as 100% loan, but there's always tricks to secure high margin of finance. 10% downpayment is usually the must.


This post has been edited by b00n: Oct 26 2007, 03:05 PM

down payment, furnishing (fixed, electrical), slight reno, legal fees and SPA... actually 15% is the minimum... it can easily go up to 20%, depends...

1)Do you have the downpayment? 15% of the property price is a solid one. Though one can always goes for 90% financing. The sum that i have would only be enough for downpayment....

2)Buying new property is always a good thing for new house owner as there's lots of freebies and discount. But are you able to sustain the monthly loan repayment and also the rental of the current place while waiting for completion. If can't afford new then i look for existing condo....

3)Look up the repayment and calculate whether or not you can survive with the current remaining money after paying the monthly installment. As I'll be letting out the remaining rooms, yes i can

4)Subsequent cost would be the renovation; how much do you afford or want to put in as renovation. Cut cost, no reno

5)Are you going to stay in the place forever or are you planning to go back to your hometown or overseas in the next few years? I'll be in KL forever, unless someone rich fella in my hometown wanna marry me

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Added on October 26, 2007, 3:05 pmIf you're asking it here, most of us would tell you not to get higher margin loan as when you calculate back the interest charges; it's a lot.....really a lot!
Unless you're planning to buy for solely investment purposes than go ahead, make full use of leveraging from the bank. I'm terrible in calculation....so i don understand what you mean at all.... What is margin loan? Why is it if high margin loan if better for investment instead of own use??

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Added on October 26, 2007, 3:44 pmSo...in short..i can't afford to have my own place yet lo....

This post has been edited by "@": Oct 26 2007, 03:47 PM

Ok, simple interest rate calculation (don't want to confuse you you by going into amortising tables).
Base RM10,000
Interest rate 4% per annum
5 years would give you 10,000*0.04*5 = RM2,000 interest charged

Same scenario but you dragged it to 10 years:
10,000*0.04*10 = RM4,000 interest charged.

Thus for the same amount of buying price, you'll be paying extra RM2,000 if you drag the loan to another 10 years.
Also, higher margin of finance equates to higher interest charged.
Margin of finance is basically how much you wanted to borrow.
EG: Property price is RM 200,000
90% margin of finance would be RM200,000 * 0.9 = RM180,000 loan
85% margin of finance would be RM200,000 * 0.85 = RM170,000 loan
80% margin of finance would be RM200,000 * 0.8 = RM160,000 loan

On why for personal house owner, it's better to clear the loans thus not to be so much in debt. If not, although the selling price is RM200,000; but the actual money you forked out to buy is either one and the half or double the price depending on how much loan you obtain and how long you dragged the loan.

As for property investment, the main thing ppl wants is not to come out with too much cash as initial investment. Thus leveraging i.e. mortgage loans and using the money from the loan and maintain a low repayment comes into play. Simple example renting out for rental income; one would have to calculate the rental to be more than above the mortgage monthly repayment so one doesn't need to fork out cash to "pay" the property. Using other ppl's money to pay for the property.

Well...i'll half living half renting out.....

Anyway...no point dy since i don have that much cash for downpayment + backup cash...

This post has been edited by "@": Oct 26 2007, 04:03 PM

The rules of thumb is to save up to at least 30% of the target price you're willing to pay.

15% may not be sufficient if you consider renovation and move in cost. Whatever downpayment you have to pay, you need at least another RM30k standby for other "not loan" related expenses. Renovation, lighting, LIGHTS, shower, furniture, computer tables, probably new locks and grill, moving cost, petrol cost to go here and there, and most importantly, your house warming party... hehehhee.... every farking thing is money... even toilet paper and dustbin plastic... am i getting paranoid???

many of the cost listed above are optional cost. TS plans to rent it out, hence I assume that he/she wont bother putting to many things, hence I reccommend the minimum 15%.

for renting purpose : D/payment 10% , legal fees , S&P ,instalments needed to pay until the completion of property (if it is under construction) and rented out, fire insurance, quit rent , fan & light installation , grilles installation, deposit for TNB/SYABAS , advanced maintanence fee (if applicable)....

ya, all comes to about 15-20% of the property price ( depends on the price of the property ).

Thanks for all the information!!!

So, lets say I want to purchase a completed condo priced around RM270k, I should have RM41k on standby for d/p and fees..?
So after signing the S&P, can I mortgage it immediately..?
I browsed through PM on the mortgage rates, and I noticed that the fixed rate offered by some banks are 5%+..
Is it a good mortgage package, or is there any other lower rates..?

Once I mortgage the property, will I be getting 90% of the property price (ie 270k x 90% = RM243k cash)..?
So once I get this cash, I can use it for other investments right..?
I'm not so clear about property mortgage, so please enlighten me as I'm planning to get a property..

Depends on the market valuation of the property, so its quite important that you get a valuation report 1st before signing the S&P. If 270k is the market rate, the usually they'll give out 90% loan (depending on banks and their respective lending policy)

Jordy, try to go for mortgage loans that offer fixed 3 or 5 years at least, that way u r "protected". I thought the property market will be quite volatile over the next few years.

completed property , varies by bank , might get finance between 80-95%
what do u mean u get the cash ? u pay only 10% d/payment, ur financed amount should go to the seller / developer ....
depends on what u prefer , a fixed rate will save ur worry about BLR fluctuation , a flexi rate will allow u to settle the loan more at early tenure as the rate is much lower.

buy a copy of personal money, one of the page will publish the packages offered by certain banks...

Thanks for the prompt reply, Pai..
The package that I was referring to was a fixed rate for the whole tenure I think..

Thanks for the prompt reply, yewkhuay..
So, if I got the mortgage, means it just helps me to clear my previous debt, is it..?
So now I get the idea of it
Yeah, the page I referred to was from PM..
I buy PM every month..

What does it means by mortgage immediately? Mortgage refers to the loan rite? So wasn't is suppose to go directly to the developer instead of the buyer? What if my loan is not approve?

When do i sign all these docs? The process is it like buying a car?

. go to KWSP/EPF to check ur balance in acc2. if u have online, also can.
. u search for the property u like based on your epf saving/personal saving or any personal loan u can get. no point seeing a 300k condo when u only have 10k in ur epf acc2. unless u wanna get more loan.
. go to banks and ask for their bank loan info. go to at least 5-6 banks. insurance company like AIA also have bank loans but look at the T&C carefully.
. u weigh which one suit u best. repayment wise. lock down period is usually 5 years so after 5 years u can do refinance. some offer 3 years.
. once everything settle, money and mind all set.... look for the property agent etc... lawyer etc....but that wont be the end of ur worries....more worries to come

This post has been edited by chloelew: Oct 29 2007, 11:26 AM

Developers or seller usually have to refund the purchaser's booking fee if the buyer can prove that they are unable to obtain loan from banks.


The best course of action now is to check whether oyur CCRIS and CTOS is clean, the find out whats the max loan you could go for. SAve time

Subjects to T&C. Some developers and sellers may not refund. Better ask this before paying the booking fees. To make it safe, go to your nearest bank and ask them to Pre-approved your loans first before paying the booking fees. This is to make sure that banks are willing to lend you money.

CCRIS plays a very big role here. Banks used this to check whether you are a good paymaster. Make sure you do not forget to pay your Credit Cards, Car loans etc..on time. Every late payment can damage your credit report which is reflected on CCRIS. As for CTOS, some banks are not using it now due to the controversy recently.

Dont think its subject to T&C.

From what I understand, developers are not allowed to keep buyers cash unless the buyers signs the dotted line.

by law there is no such thing as booking fees but it is a practice , buyers have to be aware of this thing as there is no law protecting u on booking fees paid. booking fees is considered as part of d/payment.

3k...epf 10%
balance 2700
33% of 2700
= RM891

with a monthly repayment of RM891 , my guess is you can only afford a 160-180K apartment/house.