Dear de.crystal,

The tiers that you read in my post is the general tiers that you can expect from the banks but does not account to exact similarity and it is only a reference of the expectation that you can have when you hunt for a loan. For instance, BLR - 2.4% only can be found in HSBC currently (with provision of lock-in period). To be frank, rate granted to individuals are largely dependent on individual's credit profile, trade-off of requirements and underwriting process. Most of the times, applicants have distorted idea that they can get a "particular rate" with a "particular bank". However, even a "worst" package can be the best choice for some individuals due to their personal need and preference. Rate might be similar but terms and conditions play a more important factor during a loan hunt. Thus, most of the times, we would advice our customers to provide their preferred features and documentations to us to find the best match of packages.

There are similarity over the rates and everyone will keep an eye on the money (especially the money that come out of your pocket) but please consider your need as well when you look for a loan.

Hope it helps.


This post has been edited by home_save: Dec 20 2010, 12:13 AM

Dear de.crystal,

No problem, we all learn from asking and sharing. It would have more significant differences when you loan size <400k as there is a range for tiers (i) & (ii). For instance, a real case of 230k loan might get a BLR - 2.2% in bank A while BLR -2.1% in bank B due to differential in underwriting process and requirement of the banks. We won't know exactly which banks will grant you the lowest rate, but based on our experience, certain banks (and sometimes, certain underwriters) will grant a lower rate for those clients who have certain common traits within their profile and that's why our matching service can come in place.

Installment might have slight difference as certain banks allow the financing of legal fee and the need of MRTA. Normally, with a same loan size, the variation of monthly installment is around +/- 1% of the monthly installment (applicable for loan < 2M).

To be frank, terms and features of the loan packages, implied interest payable and purpose of loans are far more important than the rate of the loan. Sometimes, our clients might look for efficient approval in regardless of rate and we will work on his requirement. Sometimes, our investors might look for no-lock in packages for under-con property with a trade-off of higher rate. Some of them might prefer fixed rate to hedge against rising BLR. All of the instances explain 1 major point, each individuals have their own need and preference, and you need to be clear of your goal in financing your property. And, we will work on your goal and achieve it.

Hope it helps. If you do need help in building up your goal and have a proper financing for your property, we can have a casual appointment and discuss about it. Definitely, no charges, but only available in Klang Valley. Cheers



This post has been edited by home_save: Dec 20 2010, 12:13 AM

Dear Kaifahalas,

You can find the link right after my initial as below.



This post has been edited by home_save: Dec 20 2010, 12:14 AM

Reply had been moved to Article 4. The illusion of lower interest in tiered mortgages: Does a lower interest rate mortgage always mean the best?

This post has been edited by home_save: Dec 20 2010, 12:30 AM

Dear lazzy_dogg,

You could expect blr -2.0 ~ blr -2.2 for your loan size, unless you are the priority customers of the banks. Then you can bargain for more.




This post has been edited by home_save: Dec 20 2010, 12:24 AM

Hi gal,

(i) Calculation above is based on the assumption that BLR is going to rising till 8.1% by the end of the tenure (average of 20 years' record)

(ii) Based on the computation above, BLR -2.25 package save the most interest. If you prepay on a regular basis, it will save more.

(iii) Yes, for BLR -2.25% package. The major concern over the three packages are "what is going to happen within the 1st 3 years" & "what is going to happen for the remaining 27 yrs"

Reply had been moved to Article 4. The illusion of lower interest in tiered mortgages: Does a lower interest rate mortgage always mean the best?

This post has been edited by home_save: Dec 20 2010, 12:30 AM

Hi Gal,

(A) IF you just consider the 1st 3 yrs,
For Bank 3: if BLR>6.65% for the 1st 3 yrs (it happens earlier then you enjoy more), then you are better off.

(B) Let say 2moro BLR =6.8, for the 1st 3 yrs
Bank 1: 4.15%
Bank 2: 4.55%
Bank 3: 4.4%

Bank 1 means the most for the 1st 3 yrs, but for remaining 27 yrs, considering blr stand at 6.8 as well, it will be a different story:

Bank 1: 4.9%
Bank 2: 4.55%
Bank 3: 4.5%

Bear in mind, 10~20% of total interest had been paid during the 1st 3 yrs, so you must be able to save up more during the 1st 3 yrs.

© 4th yrs onward, interest payable for 2 & 3 is quite similar as majority of your monthly installment is going to knock of principle instead of serving interest.

Hope it helps.



This post has been edited by home_save: Dec 20 2010, 12:31 AM

Hi Gal,

Uncertain about your questions are directing to which concerns. I assumed you are talking about the length of tenure against your plan to sell off your property. Tenure and installments might have their own implications based on what is your plan and intention.

If you intend to sell off the property after 5 years, Bank 2 will be better serve your purpose. Consider you aim for profit in disposing your property with BLR stand still at 6.3% throughout the 1st 5 yrs.

Sales price: 110k, loan amount: 100k, After 5 yrs, house priced at 120k

For the 1st 5 years,

Bank 2:(BLR-2.25)
Total Monthly repayment: 26,747
Interest paid: 19,559
Principal paid: 7,188
Outstanding balance: 93,016

Sell your house at 120k, 120k-93016-26747 = 237

Bank 3: (Fixed 3 yrs- 4.4%, BLR -2.3%)
Total Monthly repayment: 26,161
Interest Paid: 20,887
Principal paid: 5,274
Outstanding balance: 94,726

Sell your house at 120k, 120k-26161-94726 = -887

If BLR goes beyond 6.65% after 4th years, scenario might be a bit different especially if BLR reach 7%.

Hope it helps.



This post has been edited by home_save: Dec 20 2010, 12:31 AM

Yup, since you are going to sell off your property with 5 yrs ~ 6 yrs time, the difference between Bank 2 and Bank 3 is not that significant. Please take other terms and conditions into consideration as well as certain facilities might restrain your flexibility (ie. the terms of prepayment). Since you do plan to sell off after 5 yrs, you can assume that BLR won't rise beyond 7% within 6 yrs (as for the past 10 yrs, BLR does not breach the cap of 7%) and build up your plan based on this. Read through the whole letter of offer carefully and compare among them.

Most important, build up ur goal, stick with your plan and choose the best option.

If you do need help in evaluating the LO, just give me a call and we can meet up with your bankers and talk about it.

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Added on September 24, 2010, 10:35 pmHi forumers,

PBB is the best option of full flexi now for the loan which ranged 100~250k. At most, quoted at BLR -2.2% without MRTA (normally, BLR -2.2% must with MRTA), I can negotiate with the manager for it, provided your credit profile and overall commitment is at a reasonable level.

Give me a call if you need help on this.



This post has been edited by home_save: Dec 20 2010, 12:32 AM

Hi Audy,

Would you mind to scan a copy to me now? As I am going to a meeting with the HSBC staffs tomorrow and I can ask about it on behalf of you.

mail: home_save@live.com



This post has been edited by home_save: Dec 20 2010, 12:32 AM

Hi r47z,

Could you please share with me on the purpose of your purchase (residential, rental?) ? And, are you buying a under-con or completed property?

If it is going to be residential, you stay in it and didn't plan to sell it off within 5 years and plan to have the lowest monthly installment. OCBC might be a good choice as it can offer BLR-2.3%, 5 yrs lock in, legal fee financing and max 40 yrs tenure.

For all applicants, it is advisable to apply all the available packages in the town if you are not sure which one is suitable for you. By the time Letter of Offer is ready, then you decide whether you want the offer or not. It is just wasting your time in loan hunting (going from bank and bank to ask) while you are not sure whether the bank is going to grant you with your preference or not. Most of the time, you will encounter a situation whereby you want this package of this bank but they don't want you.

Let me know if you do need any help on this. You are welcome to call me and we can arrange a casual appointment to talk about this.

Have a good day.



This post has been edited by home_save: Dec 20 2010, 12:33 AM

Hi Alfredfx,

Common practice of the banks is that for any additional amount that you paid must be used to fulfill any outstanding installment or interest due. While the remaining of it will be Advance installment/payment and Redrawable-prepayment.

Certain letters of offer will state that any additional amount will be considered as Advance installment instead of redrawable-prepayment (used to principal deduction) if there isn't any expressed instruction given by the borrowers. (ie. Std Chr).

While some of them will consider this kind of payment to be redrawable-prepayment if there source of additional payment does not fall under certain categories, like the monies from EPF (ie. OCBC).

And, some of the banks require their customers to provide clear instruction of "Partial Prepayment" in order to execute the principal deduction.

Advice is, check on your letter of offer, look for the sub-clauses of "Prepayment" and read it thoroughly. Sometimes, reading can helps as the offers to each individuals can be varied to the others as well, even with the same packages. Most importantly, call and check with the officers on how you can do the prepayment for principal deduction. Each banks are doing their own way.

Hope it helps.



This post has been edited by home_save: Dec 20 2010, 12:33 AM

Dear thk,

Most probably your rate will range from BLR-1.9 ~BLR -2.1. Need your credit profile and financial status to judge on what is the rate that you might be granted. MoF is uncertain as the condos located in Seri Kembangan is not a hot spot (as per banks), very likely to be 80+5%. Max tenure: 30~35 (40 if you are degree holder)

MRTA (mof 90%, tenure 30): Est 4.9k
MRTA (mof 80%, tenure 30): Est 4.3k

Call me up if you need help on this. Have a good day.



This post has been edited by home_save: Dec 20 2010, 12:33 AM

Dear Kaizen18,

You can expect 80~90% of mof, depending who is the developer of your property, location and property type. Tenure can be 30~35 yrs based on your current age.

MRTA (90% mof): est 5k
MRTA (80% mof): est 4.4k



This post has been edited by home_save: Dec 20 2010, 12:34 AM

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Announcement removed

This post has been edited by home_save: Dec 20 2010, 12:34 AM

Dear Audy,

An inquiry. Do you bought a completed property or an under-con property? I suppose your bought under-con property. This is a statement of the loan that being released to your seller/developer/legal firm for the funding of property purchase (Title: "Progressive drawdown advice" means that the loan is disbursed to your payee in a progressive manner rather than 1 lump sum payment). The payment which released is paid to your seller/ for MRTA/ for legal fee,the "facility limit" that mentioned there is the balance of your loan which haven't released to the payee, and your interest is calculated based on the loan amount. If you are buying an under-con property, and based on the statement itself, it seemed like you are servicing the interest only during the under-con period without knocking off the principal.

Please let me know more about your scenario as all the briefing here is based on my own assumption without any B&W supporting after seeking the clarification from the staffs. Hope it helps.

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Added on September 25, 2010, 1:42 pmHi r47z,

No problem. Since your Affin Bank calculates the lockdown period start from full drawdown, you might need to take this into consideration as well as the whole effective lock-in period might ranged from 7~8 yrs (include construction period), you might be in a disadvantage if you plan to sell it off or refinancing.

Tenure is not really a big deal as I always advice my clients to go for a longer tenure package with no restriction on maximum prepayment. With this, you can have a lower minimum monthly installment and you have an option to pay higher installment and shorter the tenure by yourself while offering the flexibility in managing your monthly commitment during an emergency. Moreover, a lower minimum commitment in your CCRIS can help to improve your commitment ratio and boost your position for next home loan. Think twice.

Happy loan hunt. Cheers



This post has been edited by home_save: Dec 20 2010, 12:35 AM

Hi Gal,

lol. Definitely, the guy who sell you the package must promote their own packages rite? If you had made up your mind in selling your property in 5 yrs times, package of bank 1 and the other, BLR-2.25 might serve your purpose. As long as the increment of BLR is not significant for the 1st 5 yrs (float around 6~7%) , both of them are good choices. Since they are quite similar in nature, you can compare them in term of terms & conditions, especially the provisions of prepayment & others as well. Choose the one which best suit your need.


Please take note of the lockdown provisions, especially the term of "1st drawdown" & "full drawdown" as these will affect the effective length of lock-in period. If the package states "full drawdown", since your property is ready by the beginning of 2012, the lock-in will lapse by 2017 (if 5 yrs lock-in, full drawdown), overall, you have to wait 7 yrs from now to avoid the penalty. Well, it is just too long...

Study the LO carefully, if the bankers don't allow you to take it back to your home for "revision". Just make an appointment with them and study the whole things with them in a coffee shop (bring along a dictionary if you need it) when you have the free time. There is no point of crying after you sign it.

Enjoy your loan hunt




This post has been edited by home_save: Dec 20 2010, 12:35 AM

Dear Alfredfx,

You are getting a conventional loan or flexi loan? You should be aware of this kind of LO for conventional as less terms being specified within the LO will let the banks to have their room in manipulating the prepayment in the future. Call the officer and ask them about these questions for your conventional packages:

(i) What is the expressed instruction must be given out (& "how" as well) for "partial prepayment" to be carried out?
(ii) What is the minimum amount for prepayment? And, what is the max amount for prepayment?
(iii) What kind of prepayment can account to re-drawable prepayment?
(iv) When must the written notice be given out to bank avoid any penalty?
(v) Any charges? How many time can I withdraw per month?

If you get a flexi loan, then you should not worry about these questions as you just need to deposit your money into the Current Account, then interest deduction will be carried out.

---

Added on September 25, 2010, 7:15 pmHi Gal,

No problem.

If the terms and conditions within are similar for both banks, then you should go for bank 2 for the concern that you are going to buy a new house in near future. Point here is that longer tenure will have lower monthly installment, offer commitment flexibility as you can pay additional if you can afford it or pay a minimum amount when you cant afford it. Somehow, when you buy a new house while the old house is still in hand, a lower monthly commitment will help to improve your position in getting a loan. Longer tenure might require you to service more interest but if you can pay more, then it could achieve both flexibility of commitments and shorter tenure while interest payable will reduce as well. If you want to calculate how the extra payment can help you with longer tenure, download the developed mortgage calculator right below my initial. It helps.

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Added on September 25, 2010, 7:21 pmHi 2mystore,

Correct me if I am wrong about your intention. You have fully settle the loan of current property right? Property with a lower value means smaller size of loan and smaller size of loan means worse rate. If you don't need any emergency money, don't ever try to refinance your house as paying off a mortgage is not an easy business. Since you are getting a new property with RM500k loan, you can get a good rate with this loan size, est around blr -2.3%. For your current property, the best is only blr -2.2%. There is no point in using the money of higher interest rate to pay off a loan with lower interest rate.

Don't do this, dude.




This post has been edited by home_save: Dec 20 2010, 12:36 AM

Hi Cherroy,

Our IT team will take note of this. Thanks for advice.

Regards,

Sam, Sabesan.
IT Architect,
Business Development,
Home Save, IT Dept

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Added on September 27, 2010, 4:50 pmDear vgodmax,

For SCB, confirmation from office is loan amount <500k, flexi package with BLR - 2.1%. Lock-in of 5 yrs for those clients who don't own any facility with SCB while 3 yrs for existing SCB clients. Cap of prepayment in Current Account is around 70%+. Over the specified amount may account to penalty/charges. Setup of RM200 for CA and monthly maintenance fee of RM10 incurred. Currently, promotion for setup fee waiver is available.

OCBC might be a good option for lower rate at BLR - 2.3%, only conventional/semi-flexi. No flexi package available but tenure can go up to 40 yrs with the provision of degree certification or professional certification, max at age 75 yrs.

For flexi package, most attractive shall go to PBB or HSBC, BLR -2.2% for former while BLR -2.1~2.2% for latter, subjected to banks' discretion & might require MRTA. Setup and maintenance fee is similar to SCB.

Let us know how could we help you to make a better decision or going for loan application. Thanks.

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Added on September 27, 2010, 5:06 pmHi Audy,

It does not make any sense and your scenario does not match the explanation given from my side. May be you can go to any officer of HSBC branch to ask for clarification. It is too risky to make any assumption over here.

This post has been edited by home_save: Sep 27 2010, 05:08 PM

Hi Alfredfx,

Below is a sharing of DIBS and 2 cents among my colleagues which shall not be taken as professional advice. Officially, DIBS is an arrangement whereby the developer will borne the interest portion of your monthly installment during the under-con period. This is a recent "innovation" of real estate sector and banking industry with other "innovations" like zero entry cost & BLR - 2+ with daily rest, flexi loan, etc. (Normally, we would call them as "trick" as most of the times, they won't means anything good to our clients except you really can exploit their advantage, otherwise, too bad)

Fundamentally, the scheme should sounds good to the buyers as developers are taking part of their money to pay your interest, provided they are honest. Normally, for us as a consultant, it is just a trick or simply, a tactic. Think about it, if you are the developers, do you want to slice your profit in order to sell your properties by paying your customers' interest? Rationally, you won't right?

We would assume that they have factor this cost into the price. You might ask "higher price might reduce the sales what?" but in fact, if they are able to make the banks to be their panel with DIBS and you only can get the loan from these particular banks, you have no choice but go for them. In the end, developer smile as they can mark up the price, sell their properties, buyers still bear the interest cost during the under-con period indirectly, while the bank...why not? since the price had been marked up higher, thus, the overall interest that bear by the buyers throughout the whole tenure will be more, then more profit for the banks.

To be serious, it make not much difference among 1,2,3. (3) Higher interest payable for whole tenure and save up some interest during under-con of 1st few years, when you normalize them up, quite close to (1) & (2). For the package that available to you currently, I think you better have your main concern over the terms and conditions with the packages, especially if you are going to fully utilize the flexi features. Since UXX is offering at a higher rate, DIBS or not, not really a big deal. Frankly, interest payable is quite close. Just a matter of which features and terms you like. If you have bunch of money to spare in Current Account, go for H*** pls. If not, choose either (1) or (2). Better don't go for (3). Who knows what kind of arrangement that they are going to make for (3)? Better to have a good package in hand rather than having a benefit which drawn in the air.

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Added on September 28, 2010, 4:05 amHi r47z,

Just help you to survey 5 banks listing, O, HL, RXX, ABB, Tiger. Only RXX is panel. Seemed like is a limited-panels development project. I think you are aching in getting a good package right? Well, sorry about that. Under-con cases have to go back to their panels for financing. If the developer is doing a good job, they should have almost all the banks to offer financing for their buyers. If they don't, I am afraid you have limited choice in choosing a bank package. Sometimes, it would be better if you buy from a reputable developer with many end financiers. Take this into consideration for your future purchases as it will imply better marketability for your property in the future.

Hope it helps.

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Added on September 28, 2010, 4:14 amHi Acethriller,

This should be applicable to all the flexi-rated package. As long as your package is tied to BLR -XXX%. Whatever happen to the BLR will eventually impact your monthly installment. Fyi, BLR currently stand at 6.3% currently and it might change from time to time. Peak of past 10 yrs, 6.75%; Peak of past 20 yrs, 12%+.

This post has been edited by home_save: Sep 28 2010, 04:14 AM