Read my post #5178 for ROI

Good on you for doing your own research and drawing your own conclusions.

Numbers speak for themselves. Just go with the lowest rates and u can't go wrong. But dont be stagnant. With youth on your side, you should refinance when or if the rates go down and also to increase your ROI

On the contrary, in this loan vehicle tenure is your friend. The longer the better. You wanna be at max tenure at all times. So say after 3 years when you have 27 years left to pay... When you refinance, you wanna take back the max tenure of 30 years. The goal here is to minimize the monthly payment to as low as possible. Why? Because this loan has no penalty and can terminate anytime.

To recap, you should opt to maximize the tenure... Not minimize. Settling the loan is NEVER on the agenda.

No worries. Read up on posts by haziqnet, wildcard who has put in a lot of effort with the calculations and stuff.

Also read up posts by old fogies like me and bora prisoner who has 'been there, done that' which offers insights only experience can provide. We've been on this loan for close to 20 years now, well for me anyways

On the flip side, read brother voncrane's posts for counter arguments that thru 'heated' discussions tests the theories put forth in this forum.

If theres any one advice i can give, start early and dont delay. The power of compounding interests is real. So is oppurtunity costs

This post has been edited by buggie: Nov 13 2019, 04:43 PM

Yes asbf is just one of our financial tools available to us. What sets it apart is that its only available to us bumis. We should fully take advantage of it. Its a waste not to. It should be a part of everyones portfolio, among other investment tools

Also, I dont consider this as low risk. I consider it NO risk. And at only 1k per month, it should be within the budget of most ppl. Treat it as forced savings, set and forget.

But of course if an oppurtunity arise and the 1k can effectively be utilised elsewhere with better returns, go for it. Just be aware of the loss in the compounding as a even a 1 year delay could be worth a lot many years down the road.

This post has been edited by buggie: Nov 14 2019, 08:20 PM

Very open ended question.

Do you mean 'now' as opposed to later after dividend?

Understand that the dividend is calculated on the lowest balance of each month. So if you take out now, you will lose dividends for november. Youll still get the december dividend if u put back before 1st december. And youll get the dividend for the previous months before you take out

Yes... Longer means lower monthly repayments = better.

But many of us don't have that luxury due to age.

That's why I say, start early. Think2 so long eating up that precious time when we can be making money.

This post has been edited by buggie: Nov 28 2019, 05:00 PM

Ah the benefits of youth... But you know what they say...

"youth is often wasted on the young"

Stoked!

In the space of 2 weeks I can see my capital grow from work bonus on 15 Dec then ASB dividends on 01 Jan

It;s the most wonderful time of the year!

[quote=NorAzdanNordin,Dec 23 2019, 04:31 PM]
1. CTOS score do not matter at all. Banks have their own score and it doesn't tally with how CTOS calculate theirs. It is just a feel-good score created by CTOS

2. banks will mainly look at CCRIS, including your commitments and repayment schedule.

3. Income generated from your ASB financing (in the form of distribution) can be used to counter its commitment. For most people, the ASBF do not get in the way of your new loan applications

4. Even if it does, ASB financing can be cancelled very quickly, all you need is a date-stamped and signed cancellation form from the bank you applied your ASBF from.

5. Not to mention that house shopping takes time, you may think that you want to buy a property next year, but due to unforeseen circumstances, you may actually delay it to a different time - from which you should have just kept up with the ASBF

Do note that I do not gain anything from your surrendering nor maintaining your accounts. I am just giving my 2 cents worth. However, I believe you can trust me because I am a practitioner of this industry, I am at the forefront of consultation including helping my clients get their mortgages and ASBF, along with Takaful and other investments. In fact, I am headed to Myanmar tomorrow for a day to meet a client for a mortgage situation that he is in.



[/quote]

All valid points, but you’re missing the main reason why I’m terminating the ASB loan.

I don’t want 1.5k of my cash flow each month to be stuck for at least a year at the beginning of my marriage life.

I want to enter into a family life with as much monthly cash flow that I can. It’s easy to plan and limit my own expenses, spend, risks, etc when you’re single - but I expect that family life won’t be the same.

I’m very adverse towards risk. I tend to over-prepare, just in case. My plan was to get my wedding fund with ASB loan, get married, get the family stable financially for maybe the first few years of the marriage, and then start looking into investments/buying house again.

I’m pretty sure that the liquidity that comes with the ASB loan cancellation would be very important in the next few years.

You’re right, I could gain more by sticking with the loan in the next few years, but comparing the gains that I would get vs having the short-term liquidity at the beginning of marriage life, well, I’d want as much cash on hand at all times that I can. Just in case. I’m pretty sure that a lot of people would love to get an extra 1.5k positive cash flow every month, even if not to spend it but to have that additional extra buffer just in case.

Also since I have one property that’s yielding rental (long term tenancy), so it also makes me more comfortable in cancelling the loan knowing that I still have something else for the long-term.

Once I’m comfortable with the family life, I’ll start again. No big deal. I don’t think life is just about maximising your investment returns, gotta balance it with other factors too.

[/quote]

Having cash flow is great. Just make sure you put some away for a rainy day

My first haul of the year from investments portfolio - ASB

ASB dividend @ 5.0% + 0.5% = 35,392
Monthly - 2,500 x 12 = 30,000


Dividend - Repayment : 35,392 - 30,000 = 5,392

Return on investment (ROI) before ammortization = 17.97%

ok la, despite the 'low' dividend. Let's hope for a better ROI next year. One thing's for sure, and more importantly, the base for compounding interest has increased by another 35k in preparation for next year's dividend.

Now we wait for ASB2 dividend in March!

This post has been edited by buggie: Jan 1 2020, 08:39 PM


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that's right 643k. Now 678k. 400k certificate.

On my tenth year into the loan I was at 400k (200k certificate), I walked in to MBB branch for my usual terminate and re-apply routine. Was then advised and offered another 200k asbf. So I terminated and reapplied 400k with the 200k cash put into ASB2 (which was then transferred to ASD when i took the ASB2f)

I reckoned it was opened to anyone eligible (has the ASB soft cap capacity) as I was a nobody back then. Just a regular ASB investor and MBB client at the time.

Mr @wild_card_my

Need your opinion. Just spoke with my banker. My current interest is 5%. He's willing to come down to 4.8% (only) and a tenure of 20 years due to my age. No Takaful. The repayment after this exercise is 17 ringgit more than what I'm paying now. so 17 x 12 x20 = 4080 more over 20 years

The interesting part is....When I mentioned that I may not be able to take my 400k loan again, because of PNB restrictions, he said that I am able to. Because I don't have to surrender my sijil. So the sijil remains there while they just revamp the loan part. Gone are the days when u need to surrender the sijil and reapply. This true?

Also does that mean I won't lose any dividends since the sijil remains?

Maybank still max age up to 65 not 70. So if I'm 45 this year in august (currently 44) can I take 21 years or 20 years only? 21 years would reduce my repayment by a little bit more i guess.

I'm considering as I can get back ammortised value of maybe 15k to invest somewhere else. at 5% compounded over 20 years will nett me 25k profit. so 25k - 4k equals a nett gain of 21k

...or I could just go on a holiday!

What do you think?

This post has been edited by buggie: Jan 16 2020, 07:37 PM

Thanks bro. It's settled then. Made appointment with them tomorrow to sign off. Not sure how long it's been since I've refinanced so quite interesting how much are the capital kickbacks.

So... if the sijil stays with the banks and refinancing does not effect the 1 month distribution, then i would say theres no reason not to refinance every few years even if the rates are the same to get back your capital to be reinvested earning you more elsewhere instead of just sitting in the bank. Subject to the banks approval of course. And if the same branch don't allow, then chances are their other branch would offer. correct me if I'm wrong.

The bank in general might lose out by giving me this deal. But i think the branch is motivated to offer me the deal to boost the branch KPI in loan sales.

By the way, with my 45th birthday in august, am i eligible for 21 years or 20 years?

This post has been edited by buggie: Jan 16 2020, 10:12 PM

Lose out doesn't mean losing ler... in my context lose out mean make less. but still they make money la. (are we still on anti-bank making money from us poor rakyat campaign?, seriously???) BTW, do you know anyone that is in business to lose money?

But yeah you're right about one thing....that they fear termination of the loans. In fact I messaged them first to say that with the low dividend this year, I want to renegotiate or else the sensible thing to do is to terminate. Didn't reveal that I actually made 18% ROI (before capital kickback) last year tho. lolx . This prompted them to call me with this offer.

Anyway, This move is purely about the numbers. No matter how much I slice it and dice it, I still come up tops. The banks will make extra 4k from me for sure. But I stand to make 5/6 times that amount... maybe more from doing practically nothing except the trip to the bank tomorrow. Heck I probably don't even have to... I;m sure they'd send someone to my office like Affin did for my ASB2 loan. But I have to go to the bank anyways to change new notes for angpow this coming CNY

This post has been edited by buggie: Jan 16 2020, 11:28 PM

If you don't lose out on the 1 month distribution, like what MBB promised me... then it's a no brainer.

Get back that capital and make it work for you, not the bank!

Do the calculations. If your repayments are roughly the same even with the shorter tenure, and If the capital you get back can be reinvested elsewhere and earns u even more then the slight increase... It might be a good thing

So, signed up for the new deal this morning. Served me coffee lagi. Even asked how I'd like it. "milk no sugar please ". Of course they'd be nice as I'm about to be 'shafted' by them and they are going to milk me for the next 21 years. God forbid the banks make money off of me!

Well anyways, here's the lowdown for those interested. Voncrane was right that I'm eligible for 21 years as MBB kira current age. So this reduces my repayment to RM -2 from what I'm paying now. So this alone, I save RM1,920.00

On the documents requirement, I had to follow my current structure of 4x100k as they said if I want to keep the sijil where it is, I cannot change this. (I wanted to change to 2x200k) So I sign 4x the same documents and pay 4x stamp duties. The stamp duty rates are the old cheaper rates. Still have to give my latest salary slip which to me doesn't make sense since they know I can afford from my records there but this is no biggie. Maybe they want to profile me with my latest salary. I will email to them when I get back to the office on Monday.

Here's the kicker, well for me anyways. Didn't realise that I haven't refinanced for so long (because of the 400k issue). So when I asked how much I'll get back, he told me RM 70k give or take! (i said 15k in my last post...lol) A nice surprise indeed. A sense of satisfaction that I get to take back my capital. So I can reinvest somewhere else rather than letting the bank keep my money. Now it'll work for me instead of for them.

So compounding this 70k by 5% over the next 20 years will be RM 185k which is a nett gain of an additional 115k! So this, plus the 2k I save on monthly repayments, netts me RM 117k minus stamp duties for this exercise. And I don't lose the 1 month distribution so no transition costs.

Not a bad move. 117k from practically zero costs! All this done in 15 minutes. 5 minutes signing the documents and 10 minutes chit chatting while they wait for me to finish my coffee!

This post has been edited by buggie: Jan 17 2020, 05:31 PM

Oh I asked.... They don't make commission on any sales. Even new sales (not branch to branch) As bank staff they just earn just the basic salary. but they earn better bonus if they hit branch KPI.

Different branch. Was originally BU branch which was closer to home, but then they reassigned me to a new RM based in Dataran Maybank, Bangsar. So that's where i went for this new loan.