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TSaaltong
post Aug 7 2008, 11:38 AM, updated 16y ago

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OK, let say i'm buying a house or condo at market value RM450k.
And i have RM300k saving, and only need Rm150k loan.
I was thinking of gettnig flexi loan, but here my dilemma.
Should i just take RM150k loan with the rate being offer at BLR - 2.0% throughout.
Or
Take RM400k loan at th rate of BLR - 2.3%, then dump my RM300k and restructure back my loan.
so my loan will become RM150k loan at BLR - 2.3%.
Do you think i will save much? Is it a good idea?

FaTJ3sT3R aka Th!NjOK3R
post Aug 7 2008, 11:44 AM

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Sounds like a Digi advertisement...
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Oretega
post Aug 7 2008, 11:50 AM

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You still need money to renovate, buy sofa , bed and stuff. Dun forget. Open house somemore. Will need more $$ than expected. I recommend dun throw all your money to buy the house yet. Take more loan.
overfloe
post Aug 7 2008, 11:53 AM

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use the money for investment. get returns. then the extra you can dump in to make extra payment for the flexi loan. you can shorthen your loan period by doing this.
TSaaltong
post Aug 7 2008, 01:40 PM

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money for renovation... set a side already.
Investment cannot gaurantee positive return lar. Some more have to be more than 4% return of investment.

I still salary earner, don't want my monthly installment to be too high.
if take RM150k laon, monthly installment is around RM800 for 30 years loan, while RM400k loan will be about RM1.7k i think.
So can't afford to be that high.
So it either i pay RM300k now and take RM150k loan
or take Rm400k loan and dump RM300k into it then restrcture the loan back.
The monthly installment will be slightly less than the Rm150k loan because of the bette rate you get.
But is there any hidden cost that i should be aware of?



overfloe
post Aug 7 2008, 01:54 PM

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look for early settlement fee clause.

anyway,
if you plan to take 400k loan and dump the money later, it will not reduce the monthly installement. it will only shorten the loan tenure.

This post has been edited by overfloe: Aug 7 2008, 01:55 PM
TSaaltong
post Aug 7 2008, 02:11 PM

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QUOTE(overfloe @ Aug 7 2008, 01:54 PM)
look for early settlement fee clause.

anyway,
if you plan to take 400k loan and dump the money later, it will not reduce the monthly installement. it will only shorten the loan tenure.
*
I'm not going to settle the loan. I still own RM150k, so i think that clause not apply. am i correct?
Actualy i can reduce the monthly installment but need to apply to the bank to restructure the loan abe on the new amount of the loan.



rico_hard82
post Aug 7 2008, 02:41 PM

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QUOTE(aaltong @ Aug 7 2008, 01:40 PM)
money for renovation... set a side already.
Investment cannot gaurantee positive return lar. Some more have to be more than 4% return of investment.

I still salary earner, don't want my monthly installment to be too high.
if take RM150k laon, monthly installment is around RM800 for 30 years loan, while RM400k loan will be about RM1.7k i think.
So can't afford to be that high.
So it either i pay RM300k now and take RM150k loan
or take Rm400k loan and dump RM300k into it then restrcture the loan back.
The monthly installment will be slightly less than the Rm150k loan because of the bette rate you get.
But is there any hidden cost that i should be aware of?
*
hi
i think is better you pay the 300k 1st then take the loan of 150k
any way u have to bear in mind of the s&p 10%, lawyer fees, its myb around 3% of the loan
if u take 400k loan the you have to pay the s&p 10%, lawyer fees, its myb around 3% of the loan

even u put back the 300k to restructure the loan (mean you take 400k loan), u still need to pay rm1.7k / month
only the different is you pay more on principle and less on interest rate

if for my opinion
frm the money 300k
you just settle all your other debt
like your car, credit card or other
then the balance money pay on your loan
so you just have 1 loan to worried about

Have a nice day
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Rizal

dragony
post Aug 7 2008, 02:47 PM

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Do not take flexi loan since it is not a good choice. Better loan RM200-250k (depend how much you want to renovate).
loan less is always best choice.
overfloe
post Aug 7 2008, 04:41 PM

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QUOTE(aaltong @ Aug 7 2008, 03:11 PM)
I'm not going to settle the loan. I still own RM150k, so i think that clause not apply. am i correct?
Actualy i can reduce the monthly installment but need to apply to the bank to restructure the loan abe on the new amount of the loan.
*
what i mean is if you decide to settle the loan earlier, and still within the lock-in period (ie. 5 yrs), bank will charge you around 3% to 5% penalty.
i don't know whether bank allows you to reduce the monthly installment, because that requires them to change the agreement (read: fees). you can, however by refinancing the loan.

if you take full flexi-loan, you can dump in the money to reduce the loan tenure.. and take out the money back anytime you want.
johnsonm
post Aug 7 2008, 04:49 PM

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dude, alliance is now offering full flexi at blr - 1.9%. it is always good to have cash handy, so take a full flexi loan and dump all your cash there to reduce interest. should you require money in the future, all you have to do is withdraw it.
??!!
post Aug 7 2008, 04:52 PM

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Do the maths.

The savings of 0.3% of RM150,000 over the loan tenure...bring it to present day value...is it less or more than the additional legal fees and stamp duty payable due to larger loan amount.

Since you do not want to pay a larger monthly installment , check if the loan will allow a pay off of RM300k or 75% of loan sum immediately after drawdown. If yes, any charges/fees payable?...If yes, minus from the savings of 0.3%.
Pai
post Aug 7 2008, 05:26 PM

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QUOTE(johnsonm @ Aug 7 2008, 04:49 PM)
dude, alliance is now offering full flexi at blr - 1.9%. it is always good to have cash handy, so take a full flexi loan and dump all your cash there to reduce interest. should you require money in the future, all you have to do is withdraw it.
*
Best advice for TS,IMO. I would do exactly the samE smile.gif

However, pls shop around as u might get better rates from other banks.
TSaaltong
post Aug 7 2008, 05:43 PM

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I did check with standard chartered, according to them i can restructure my loan for free. but i'm not sure whether i can restructure it as soon as my loan is being approved, or do i have to wait for a certain time before i can restructure it.

Option 1
RM150k loan, offer BLR - 2.0% rate for 30years loan
So the monthly installment would be around RM782.47

Option 2
RM400k Loan, offer BLR - 2.3% rate for 30 years loan.
So the monthly installment would be around RM2014.88

but i have RM300k cash in hand. so i dump into this loan and restructure it.
So the monthly installment would now become RM755.58

I save RM26.89 per month. So for 30 years, i will saved up RM9680.40 compared to Option 1.

Charges that i know have to bare is the legal fee for the loan which are as follow,
For loan amount less than RM150k you have to pay 1% for legal fee.
For loan amount more than RM150k, you have to pay 1% legal fee for the first 150k, extra amount you have to pay 0.5%.
correct??

Therefore for 150k loan, i have to pay legal fee of RM1.5k
and for 400k loan, i have to pay RM2750 legal fee.
different of RM1250k

So if i go with option 2, i still save up RM8430.40. after deduct the extra charges in legal fee.

that why i now thinking of going for Option 2.
But this is assuming there is no other extra charges incured when restructre my loan and that is what i'm trying to find out here.








johnsonm
post Aug 7 2008, 05:52 PM

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legal fees is 0.7% after 150k. also, dont forget stamp duty and other disbursements.

look out for the prepayment clause in your offer letter. i suggest you take the time to read your offer letter very carefully as this is the main foundation of your loan. the thick documents are pretty standard.
rico_hard82
post Aug 8 2008, 09:47 AM

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QUOTE(aaltong @ Aug 7 2008, 05:43 PM)
I did check with standard chartered, according to them i can restructure my loan for free. but i'm not sure whether i can restructure it as soon as my loan is being approved, or do i  have to wait for a certain time before i can restructure it.

Option 1
RM150k loan, offer BLR - 2.0% rate for 30years loan
So the monthly installment would be  around RM782.47

Option 2
RM400k Loan, offer BLR - 2.3% rate for 30 years loan.
So the monthly installment would be  around RM2014.88

but i have RM300k cash in hand. so i dump into this loan and restructure it.
So the monthly installment would now become RM755.58

I save RM26.89 per month. So for 30 years, i will saved up RM9680.40 compared to Option 1.

Charges that  i know have to bare is the legal fee for the loan which are as follow,
For loan amount less than RM150k you have to pay 1% for legal fee.
For loan amount more than RM150k, you have to pay 1% legal fee for the first 150k, extra amount you have to pay  0.5%.
correct??

Therefore for 150k loan, i have to pay legal fee of RM1.5k
and for 400k loan, i have to pay RM2750 legal fee.
different of RM1250k

So if i go with option 2, i still save up RM8430.40. after deduct the extra charges in legal fee.

that why i now thinking of going for Option 2.
But this is assuming there is no other extra charges incured when restructre my loan and that is what i'm trying to find out here.
*
hi i have a question?
how much is your purchase price?


Added on August 8, 2008, 10:28 am
QUOTE(aaltong @ Aug 7 2008, 05:43 PM)
I did check with standard chartered, according to them i can restructure my loan for free. but i'm not sure whether i can restructure it as soon as my loan is being approved, or do i  have to wait for a certain time before i can restructure it.

Option 1
RM150k loan, offer BLR - 2.0% rate for 30years loan
So the monthly installment would be  around RM782.47

Option 2
RM400k Loan, offer BLR - 2.3% rate for 30 years loan.
So the monthly installment would be  around RM2014.88

but i have RM300k cash in hand. so i dump into this loan and restructure it.
So the monthly installment would now become RM755.58

I save RM26.89 per month. So for 30 years, i will saved up RM9680.40 compared to Option 1.

Charges that  i know have to bare is the legal fee for the loan which are as follow,
For loan amount less than RM150k you have to pay 1% for legal fee.
For loan amount more than RM150k, you have to pay 1% legal fee for the first 150k, extra amount you have to pay  0.5%.
correct??

Therefore for 150k loan, i have to pay legal fee of RM1.5k
and for 400k loan, i have to pay RM2750 legal fee.
different of RM1250k

So if i go with option 2, i still save up RM8430.40. after deduct the extra charges in legal fee.

that why i now thinking of going for Option 2.
But this is assuming there is no other extra charges incured when restructre my loan and that is what i'm trying to find out here.
*
ok lets put its this way

let assume your purchase price is 450k
& you take mortgageOne non ACA
at b-2.3%, 89% loan



S&P x 10% = 45k

s&p (450k)
1st 150k x 1% = 1500
2nd 300k x 0.7% =2100
legal fee = 3600
5% tax = 180
disbursment = 1000(+-)
total = 4780.00


mot (450k)
1st 100k x 1%= 1000
2nd 350k x2% = 7000
total = 8000


loan (400k)
1st 150k x 1% = 1500
2nd 250k x 0.7% = 1750
legal fee = 3250
5% tax = 162.50
disbursment = 1000(-+)
Total = 4412.50

stamp duty
400k x 0.5% = 2000

Value
1st 100k x 0.25% = 250
2nd 350k x 0.20% = 700
total = 950

for loan (400k)
S&P = 45k
Total fees = 20,142.5
total = 65142.50

for Loan (150k)
S&P = 45k
Total fees = 17055.00
total = 62,055.00



interest save 9680.40 on 400k
interest save 6592.90 if you take the 150k

but bear in mind that when you restructure your loan
the 300k u dump in consider gone (mean your loan is 150k w b-2.3% only)
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This post has been edited by rico_hard82: Aug 8 2008, 10:28 AM

 

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