At least give him credit for being so persistent.....

The best part............they're going to charge you for all that.........errrr......... they term it as selling a service.

"charge" i believe is an understatement, think "rip-off" would best describe their "fees".

Hi, please help me as this question had been in my mind for quite a
long time but none of my friend who bought house could give me the
correct answer. For Flexi Home Loan

Let said I want to buy 120k properties, but currently i have 70k
cash, Can i loan it with max 90% @100k. Then after that i dump my
50k into the loan so make the total interest become

Normal Condition:
120k house@100k loan = 100k X 6% = 6k/year interest

I want to make it
120k house@100k loan = 100k x 6% = 6kyear = rm500/month interest
Then 2nd month i dump in 50k
Total owe bank = 50k
50k x 6% = 3k/year = rm250/month for interest.

Can it be done? what is the penalty?
What is the difference i loan 50k directly compare to i loan 100k
then dump 50k to reduce total amount i owe bank?

What I'm have in mind is as I made extra payment 50k as extra
payment, I can have skip do not need to pay the installment for
first few years, i can use my monthly saving to do other investment.
And since the extra 50k is advance payment, in case of emergency i
can take out the $ for temporary use.

Yes you can. Most banks only give you penalty when you pay back all within less than 5 years or stated by the bank. Talk to your bank about it.

nonop, i dun intent to pay all in 5years, also not afford to pay all in such short period. What i want is to reduce interest rate and settle the loan asap

Normally I'll suggest customer to take max loan tenure n max loan. Cuz since u're so young, if u take max tenure then the monthly installemnt will be lesser. So mayb u got extra money you can do others investment..money make money. if u loan 100k u also allowed to dump in 100k so the bank will charge u 0% interest, no any charges, no penalty..

For example,

monthly installement we have to pay 2 portion, principle and interest.

Loan Amount : 100k
Loan Tenure : 30 years
monthly installement: RM800
principle : RM300 Interest : RM500 (no dump any money into your CA)

Let's said u got dump in 50k
so, maybe principle : RM300 Interest : RM400
the RM100 tat u saved we will rebate it into your CA.

P/S: this is just for an example. The interest saved calculation is not accuarate.

@Errie,
I don't understand what U mean by if we take a 100k loan and dump 100k in, the bank won't charge us interest.

Also, if we had the 100k to put into the bank, Y would we need the loan in the first place?

can i know what bank is this so that i can recommend my dad for refinance?

there is a minimum charge if you place a cash amount equivalent to your loan outstanding amount... i too have a housing loan and i've spent some time surveying most of the banks around...

also, it will be wiser to pay off the loan unless you have an investment that is give you higher per annum returns compared to your housing loan interest rate...

@kenji1903,
Yes I'm quite sure there would be some surcharges incurred cause banks are going to need to make $. It just doesn't make $en$e for an individual to put those $ in the bank and take out a loan equivalent to the same amount. It also doesn't make $en$e for the bank to allow that cause they aren't going to benefit from it; other than the fact that they know U'll be able to pay up the principal sum but hey it doesn't draw lots of profits due 0% interest charged.

Tinkerbel, liquidity is the name of the game. No point tying all your $$$$$ into your property due to its poor liquidity.

I'd do exactly what Errie suggested. That way, I have spare cash to capitalize on better investment opprtunity and could potentially pay 0%. Win-win IMO.

simple. so the income tax ppl won't red flag you.

@Pai,
It only benefits one if there are no additional charges. Also, I don't see how it benefits the bank hence am surprised.

Tinkerbel,

There's no free lunch (unless u r extremely hot, that is ;p ), hence why there's usually the RM10 maintenance fee for the loan a/c.

To portgage loan prospects, pls check your loan LO throughly prior signing, as there might be hidden clauses that could cot u more than initially anticipated.

pay cash for 120K property won't kena red flag, but if ur name appear too often on the list submitted to LHDN, they will AUDIT u.

@Pai,
Now we're talking - there is a surcharge for the service rendered unlike what was mentioned previously. Also, I do get free lunches and I really ain't hot

First of all TS doesn't know what is flexi loan.
Pls do up more research and the easiest way is shop around and ask bankers.
Truly full flexi loan is available with SCB, Citi and HSBC whereby they give you ATM cards and checque books.
Some are what I would term them as partial such as UOB, OCBC and most local banks. I.e. when one wants to withdraw, they would have to inform the bank and can only withdraw in Thousands or multiples of hundreds with the minimum of RM500.

Than when we talked about charges, usually the first group would charge a monthly "account maintenance fee" of RM10. Whereas the latter group usually doesn't charge anything but might charge processing fees upon withdrawal.

So now the decision is on whether or not one really needs this "flexiness" and how frequent one projects he/she would need to withdraw money.

Btw, the advance payment made doesn't reduce one's monthly repayment. In all, it would reduce the total loan principal thus reducing also the interest charged. But the monthly repayment amount is still the same.

Put HLB's MortgagePlus into the full flexi loan category....and it also charges the RM10 monthly maintenance fee (I asked for waiver, but wasn't given it, oh well ).

I have calculate for the rm10 monthly charge for 'TRUE' flexi pay loan already, its only worth if you have >16k extra payment all the time to save the interest for paying rm10 charge.

2k x 6% = rm120 or rm10/month.
The extra 2k will goes to the rm10 charge

Like I say, the way you calculate interest shows that you're not familiar with housing loan interest at all....
mortgage interest is using amortising method.
excel PMT function:
(from excel help)
Calculates the payment for a loan based on constant payments and a constant interest rate.

Syntax

PMT(rate,nper,pv,fv,type)

For a more complete description of the arguments in PMT, see PV.

Rate is the interest rate for the loan.

Nper is the total number of payments for the loan.

Pv is the present value, or the total amount that a series of future payments is worth now; also known as the principal.

Fv is the future value, or a cash balance you want to attain after the last payment is made. If fv is omitted, it is assumed to be 0 (zero), that is, the future value of a loan is 0.

Type is the number 0 (zero) or 1 and indicates when payments are due.


And according to your first post example, you'll be paying RM599.55 per month.
Logically if you've dumped in RM50k the next month your monthly repayment should reduced to RM300.07 but the fact is flexi doesn't work that way. You'll still have to pay monthly RM599.55 till you finish finish paying down your principal.

This post has been edited by b00n: May 26 2008, 03:33 PM