Hi all, I'm planning to refinance my home loan recently.

I had been servicing my current home loan for about 2 years (out of 30 years tenure), with the interest rate of BLR - 0.8%.

It is still in the lockin period of 60 months, meaning that I will be charged with penalty of 3% out of the total loan amount if I refinance now.

From my surveys recently, I can get around BLR - 1.80% for Non Zero Entry Cost package for loan amount of RM110K (my outstanding loan amount).

Do you think it is a wise move to refinance now? Or should I wait until the lockin period is over? Please advice. Thanks in advance!

This post has been edited by sandswift: Oct 28 2008, 10:19 PM

Hi there...

Refinancing during lock in period is usually not worth while.

But I can't comment now as it depends on the loan you have taken and the valuation of your existing property.

If you can email me your property details, then I might be able to provide you a financial recommendation.

Cheers!
June
xinxuan21@yahoo.com

suggest you re-negotiate your current rate with your current bank, its FOC

I would suggest you try re-negotiate with the bank but if your bank is hesitant you can consider refinancing from other banks.

If you looks at the maths even if you pay the three% penalty then you still save 3% if you refinance at the rate of BLR-1.8%. Thus it comes down to whether you monthly installment is reduced. Apart from that your property should have appreciated over the duration of the past two years and you can cash out on your property.

If you fail to re-negotiate with your bank you can email me at repul2k7@yahoo.com as I can assist you in obtaining the best rates from numerous financial institution and hopefully try for BLR -2.0%. Have a nice day!

Bank wants me to sign quickly this week to lock in 5% for 60 months instead of present variable rate which has some years gone up as high as 7%.

With world economy like it is..... does this sound suspicious?

111

You might save around RM20k of interest with a new package of BLR -1.8%

** disclaimer, i do not know your original loan, but since u said u served for 2 years and have a remaining of RM110k, so i assume the original loan is RM120k **

If it is a non zec package, you have to pay 3% of your initial loan or RM3000-5000 (usually the bank clause is 3% of loan or minimum of RMXXXX whichever is lower) so, please double check.
And you need to pay for legal fees, which might be around RM4k for a RM110k loan

Worthwhile? Do your own calculation and decision.
My suggestion? Take the 5% fixed rate IF they do not increase the lock in period furthermore.

Rumors i heard? Interest rate going down. FD interest rate going down = BLR going down. But rumors is rumors until it is real. Just like rumors of BLR going to increase 2 months ago ...

Worldwide interest is sliding down at the moment because of global financial crisis, to help ailing economy.
While Malaysia at 3.5% overnight rate, doesn't have much room to the downside, but there is high possibility BNM will reduce to 3% in near future if economy does slip into recession, so BLR might follow suit.

Pai: that's a good idea! How come I never think of that?

falcon867: Thanks for your advice. I will try to re-negotiate with my bank after i got the loan offer letter from other bank.

ed0gawa: Yes, your assumptions are all correct! I had made a rough calculation:

Penalty (3% of original loan amount): RM3700
Legal fees: None (If I get ZMC package)
Current MRTA to be forfeited: RM1200
--------------------------------------------
Total lost for refinancing: at least RM4900

My suggestion? Take the 5% fixed rate IF they do not increase the lock in period furthermore. <-- Recently I asked my current bank about increasing my installment amount, they told me that they will need to start the lock in period again, back to 60 months.

Anyway, my relative is trying his best to get BLR-2% for me. Or I will wait until my lock in period finish first. By that time, I hope the BLR will be going down.

paiseh, legal fees should be less than RM3k , instead of RM4k that i posted earlier, around or less RM2500 depending on lawyers

did a case last month of RM140k, SPA legal fee was around 2.6k and loan legal fee somewhere round 2.3k ...

Why would the MRTA be forfeited? It still takes effect. You can even transfer it to the new bank.

edited: wrong thread

This post has been edited by IceBikers: Nov 5 2008, 11:31 PM

Are you sure MRTA can be transferred to the new bank? I thought MRTA is non-transferable? AFAIK, only MLTA is transferable. Please correct me if I'm wrong.

hi shiewwai85,

May I know you are from this bank :-) I would like to study refinancing because my apartment will be completed, in next 1~2 month.

MRTA is not transferrable. Kinda regret taking it since I already hv life insurance.. Haih~~~

wow, -2.20 is a good deal. What bank are you from ? Want to do a little research before tying myself up with another bank.

Yea I'm curious to know which bank too... Flexi Loan... like heard b4

i am from a bank which is growing strong in the market. open quite many branches in klang valley recently...Alliance Bank Bhd...very aggresive on mortgage loan..

Heard promises like this b4. Promise the sky,deliver bukit beruntung

Anyone who applied pls keep us updated

haha...maybe there are some mistake between the sales executive and you. for me, i will show you the board rate and confirm you can get the rate. there are many factors that you can get the rate..dont jes blame the individual itself..look into the factors and try to rethink..did the sales executive from bank giving wrong information or vice-versa..if the sales exec giving wrong information, you should complaint he/she to their manager or even bank complaint department. is very important to make our customer clear on what we offering. if we say different, is consider as CHEATING!!! you can bring this us to bank negara.

thanks.

I think what pai meant is the bank is offering BLR -2.2% but not to every offer.
So in a way, by advertising that would be misleading unless you can confirm that everyone who is eligible would get the -2.2 as a lot of time, one might not be able to.
Especially when the factor is in regards to LTV, tenure, risk profile of customer, valuation report on properties etc..

As in my case, my previous loan sales agent didn't promise me a high "minus" in BLR. She gave me a rate that everyone is confirming getting, however she did help me get a better rate which obviously she wouldn't promise at the start of the deal.

Thanks Boon and u could not be more right. Often agents and banks market ONLY the benefits of their product and never actually mentioned the hidden terms involved like the MOF,lock in period,min loan amount etc.

The advert by oue agent fren above is a great example of that..