I'd need quite a large sum of money for education purpose soon, and I'm wondering how this home refinancing thing works. I get pretty confused as in some threads, some claims that their BLR are around 1.8%, while other threads it's around 5.55%. I guess these both are totally different thing, but I just couldn't understand.

My house is at least 20 years old. How do they determine the market value of it, and how much will the banks be willing to borrow? How do I calculate the interest rate and installments per month?

Say I'd like to borrow RM240k, in 20 years term, how much would be the monthly installments, roughly?

This post has been edited by -Teddy-: Mar 1 2009, 09:05 PM

Hi Teddy, u need to make sure a few things are in order :

1. U have a job today that pays you min 3.6k a month now

2. Dont quit your job yet until you secure and executed your refinancing package

3. Your house value is min 300k today.

I don't have a job yet, my mom does. My neighbor sold his unit a year ago at 270k, don't think it will reach 300k anytime soon. How about the interest rate?

how old is your mum and how much does she earns today?

43 years old. I'm unsure but what if it's 6k? Would it be good enough?

Optimistically speaking and without knowing the debt levels she has today, if its 6k p/m and she's 43, she'll barely qualifies for a 200k max loan for 10 years. She has to make sure that she can keep her job over the next 10 years or she'll loose the house.

suggestion --> You should opt for a much cheaper education pogram, and work pt to fund your studies.

What about for 20 years?

What if I already have the amount needed to pay the installments for 2 years? Then after 2 years I'll graduate and get myself a job with decent salary that will be able to pay the installments without much problem? All I need is just to get the loan out and I should be good to go.

to know your house market value

Call the bank, tell them you wanna refinance.
Let them have your address, the size of the house. Any renovation done.

Or call valuers directly providing the same information.


to know if you are eligible for the loan
Maximum loan tenure is 30 years or up to age 65 (most banks)
A very simple way to calculate if your income if enough or not

Current commitment (car/houses/personal loan/credit cards/OD etc) + monthly installment for the house = 50% or less than your monthly income (generally it is calculated that way by banks)

btw, pai .. how did you come up with the conclusion of <RM200k?


Anyway, for TS information

Loan of RM240k for 20yrs tenure @ 4.5% interest rate ...
Will come up with a monthly installment of RM1520 +-

And BLR = Base Lending Rate, which is 5.95 now.
BLR - 1.8% = 5.95% - 1.80%

The minus part are 'offers' from banks. Each bank differs

This post has been edited by ed0gawa: Feb 28 2009, 01:32 PM

that sounds very optimistic..you do know that we currently have 60,000 unemployed grads rite? what happends if u dun manage to get a job with "decent" salary after you graduate...can your mom sustain for 1 year while u look for a job? how about 2? 3 years?

sry for being blunt, just giving you worse case scenario

I guess my mom can sustain the installments for quite a while. My course will take only (hopefully) 18 months, and if the interest rate is low enough, my savings can sustain the installments for 2 years or slightly longer. By that time I should be able to get a job hopefully.

I'm willing to take the risk.

then go for it, education for yourself is probably the best investment

hi Teddy,


have you look for other alternative?

Interest rate for housing loan might be at 26 years low for now, but remember it fluctuates with global economy conditions.

If you are looking for ways to finance your education fees, i suggest you look at education loan, or just ask is there any company wiling to give schoolarship.

Or u can work out an agreement with the company. Take their schoolarship, in return you'll work with them for a period of years after graduation.

It not going to be easy with the current recession taking its toll on the world but i think its better if you give it a try. For the time being if you still wish to re-mortgage the property you can just proceed with the application first.

No harm sourcing options for the time being.

Let me know if you need any help. You know how to get me.

This post has been edited by merce: Feb 28 2009, 03:21 PM

Yup, I already know what alternatives they are for me now, but I see this as my best option.

I wanted to become a pilot, and MAS and AK is having cadetship program where they pay the course fees for you, and in return you will be bonded with them for 15 years after graduating while your salary will be deducted to cover the course fee back. The thing is places are very very limited, therefore competition is high.

What I can do is, join a local flying school as a private cadet, then while at it, still apply for the airline cadetship. If I got in, the airline will pay the fees while I continue my training.

If I were to go for another course first instead of piloting, then apply for airline cadetship while at it, I would have waste a few years, plus the fees for the alternative course and living cost. By that time I think my savings will go thin and might no longer be able to pay for the installments with it, if I were to still refinance my house after that few years. Plus, the fees for piloting would probably be raised into an extremely unaffordable level, from 2006 to 2009, the fees has been raised to near 100k, that's crazy.

jwrx is right, education is the best investments one can have as it will affect my entire life. I would rather take up a loan and struggle for several years to make my dream come true than choosing a cheaper course and suffer for the rest of my life doing something I don't like.

Anyways, thanks all for the valuable information. Much appreciated.

P/s: I'm not sure if I'm right, but I see education loans offered by banks have higher interest rates than home loans. On RHB's study loan page, it says "BLR + 1.25%", meaning 5.95% + 1.25%? If yes, it make no sense to take up a study loan. Anyone mind to enlighten me on this? Thanks.

This post has been edited by -Teddy-: Feb 28 2009, 03:43 PM

The odds of a 43 years old lady, just decent income level, very bad global conditions, to get 90% MOF in todays environment is very slim.

I think banks will most likely fund max 70% MOF (assuming 270k is the fair valuation) at 15 years tenure. Monnthly installments should be approx 1.6k p/m.

Well, refinancing or mortgage has lower interests rate because you are mortgaging your house.
If you don't pay up, say bye bye to your house.
While education loan, erm... they give u the money while asking for nothing as collateral that explains why the interest rate is higher.
Banks says bye bye to the money

Pretty true.... with current economic situation, it is really hard to get a loan ...

But ofcos, TS might get lucky as well
Assuming his mother work is stable.
Has a favourable track record.
The house is at favourable location.
Bla bla bla...

Well, never try never know. Since TS had actually 'planned' a lil ... what i would suggest is try to apply for it. And see how it goes from there.
Being approved does not means that you must sign, TS don't be duped into signing the Letter Offer or Agreement, you still have your rights as consumer

RHB Study: http://www.rhbbank.com.my/personal/loans/study_loan.shtm

The first package requires collateral, but still the interest rate is BLR + 1.25%. But then they can loan up to 100% of property value.

You mean I can apply from all the banks first, but only sign the one with the best deal?

flight school huh?

i used to dream to become a pilot before, but unfortunately i dont have the privilege of being the child of a rich family...

yeap private flight school tuition fee is ridiculous! couldn't agree more.

give me a call next week and i'll see what i can do.

for the time being, give me the details of the property ie adress, built-up, renovation. i'll check the market value for you.


Regards

Woo... sry for that, didnt knew that there were collateral needed...

For 2nd question, yes.. you can apply from 10000 banks and only choose the best deal.
But there are cons too..
Let's say you apply bank A, B , C ,D ,E

Bank A rejected/lower the margin before B C D E makes their decision. There are chances the other banks will follow suit. (sometimes)..

But at the same time, you can tell the banker, ' Hey, XXX bank is also processing my loan, so you better be fast and give me a better deal.. '
something like that...

When should I start applying for the loan if my intake is late. Would it be stupid to apply now if my intake is in November 09? If the loan is approved, but I'm yet to be in school, then I have to start paying installments already while sitting at home. That will thin my savings that are intended to be used to pay installments while looking for a job after I have graduated.

If I apply too close to my course commencement date, I'd probably have to fork out some money first to get into the school. Then if the loan is rejected later, I would have no money to sustain the tuition fee and will be kicked out of the school.

Is it possible to apply now, don't take the loan even it's approved, and only take the loan when I need them? Will the previous approval still be valid?

Mortgage transaction requires 2-3 months to complete, till the disbursement of money.

If you are lucky then it will take less then 2 months, but that hardly happens.

Application may take from a couple of days to a week time for approval.

After that it might take a couple days more for the officer to generate the Letter of Offer and present it to you, assuming that there are no further amendments on the terms and condition.


For semi-flexi account;

If you really want to remortgage the house for money, apply the loan 10 or 20% higher from the amount you desire to obtain. Once the money is disburse to your account, use the 10-20% extra money to pay as Advance Installment or request a Standing Instruction, to cover the installment for a year or 2. For the remaining money, dump it back as Capital Prepayment/Withdraw-able Prepayment. Then you will have the money ready when u need it. Ask your officer to help you plan all these. Different banks has different ways of playing with the account and their features. Check for for withdrawal charges and whether their Advance Installment offsets the principal or not.

Now for a full-flexi account;
This is a different approach. With the money disburse to you, dump everything back into your loan account (or current account if they have link accounts) Ask for a Standing Instruction for your installment. This would off-set the principal and minimize your interest until you utilize the money for study.

Hope the above helps

Good luck.

This post has been edited by merce: Feb 28 2009, 10:23 PM

Wow, this is confusing. Is there any layman version of this?

By the way, what's the difference of a full-flexi and semi-flexi account? Will they differ in interest rates, monthly installments and MOF? In my case, which bank offers the best deal?

Where do I get a guy to talk to, to help me on planning and choosing the right home loan product, make sure things go smooth etc? How much will I be charged?

I suppose full-flexi account will be more suitable in my case as I can pay my school around 50k every 3 months instead of paying them 230k at once, plus I will only need the money 30 days before my intake.

Thanks a lot

P/s: I see things like "Min. Downpayment" while reviewing home loan packages at money3.com.my. Is it applicable to home refinancing?

This post has been edited by -Teddy-: Feb 28 2009, 10:41 PM

Full Flexi,

You'll get a Current Account which are linked with your Loan Account.

Let's say you owe the bank RM200k, but in the current account, you deposit RM200k in it.
It is = you have paid them BUT at the same time you still can use the money in C/A. So no interests will be charged on you. BUT the monthly installment will still be deducted automatically. (From your current account to the loan account)

In your case, if you don't need the RM230k at once. It is better to opt for Full Flexi type of loan. Whatever excess that you do not need it right away, you can keep it in the C/A to reduce the interests charged on you.

FULL FLEXI packages often have downsides like Interest Rate not as attractive as normal conventional package.
You need to pay monthly maintenance fee of RM5 or RM10 depending on banks
MOF wise, normally are not affected.

Semi Flexi are Full Flexi wannabe, don't bother with those... (layman enough?)
Some banks (their marketing) call their semi flexi as full flexi .. beware.... AFAIK, Public does not have full flexi

Min. Downpayment is not applicable for refinancing

But I would probably spend all the RM230k in a year's time. Will the amount of interest saved during that year (withdraw 50k every 3 months) justify the "higher-than-conventional-package" interest rate which I will be facing for next 19 years?

er...

in terms of facility i'm pretty sure the word itself already justify the meaning. flexibility vs "not-so-flexible"

interest wise, semi-flexi usually have better interest rate compare to full-flexi. and they dont have monthly maintenance charges. However, withdrawal of prepayment will be charge per withdrawal, from RM 10 to RM50 depending on banks for semi-flexi account and where as its free for full-flexi.

you can talk to any mortgage officer, but best ask your relative or parents if they know any good friends or relative in this line.

If I know no one in this line, how do I get started? Visit the banks one by one to get information, then decide?

I'm pretty sure there's a lot of banker here wiling to help.

If you have inquiries for OCBC just give me a call.

We only have semi-flexi thou, just for the record.

Oh my, my mom told me her name was blacklisted, and she don't even know who blacklisted her. How can she settle this?
Is it possible to get any loan for a blacklisted person? Can she be a guarantor or something?

If I'm not mistaken, she was the second name for a company of a friend, but her friend went missing and the debt piled up. When she wants to sell a house later, she realize that she's blacklisted.

I feel so lost now.

P.s. She has good track record in paying for her car and house last them (all paid off now). Since the reason she got blacklisted isn't really her fault, is it possible to negotiate with the bank so that they can approve the loan?

P.p.s. Her credit cards are still working. Do this has anything to do with the fact that she is blacklisted?

This post has been edited by -Teddy-: Mar 1 2009, 08:20 PM

If that is the case, better get ur arse to the bank tomorrow. Talk to them, tell them your situation, your mom's case.

Ask them for advice, FYI there is no charge for consultancy .. so just bombard them with question.

There are chances that some banks are willing to accept your case. Solely depends if the banker is willing to do it or not.

Since u said she got a good track record, go back to the bank where she is holding their credit card and also car loan. Chances are a lil higher

Meaning getting blacklisted doesn't mean guaranteed rejection, but it's on case-to-case basis? Thanks for the help man, really appreciate it. Will talk to my mom tomorrow then

By the way, should I also tell the bank the fact that I'm gonna use the fund for piloting? Can they check if my mom's name is blacklisted on the spot?

This post has been edited by -Teddy-: Mar 2 2009, 12:29 AM

Hi Teddy,

I used to work in a bank.. few banks actually.. so I can help you out with all your enquiries. We can meet up and talk about your case. I'm liaising with a few banks so you can apply with a couple of banks through me and see which bank will approve your loan.

Note: It is always best to be honest with your banker coz they will try their hardest to get your loan approved coz they need the case as well They will know what needs to be noted and what doesnt.

As for your mom's background check it cannot be done on the spot.

Thanks DriedIce, I will talk to my mom and let you know. You're from KL too?

And by the way, is there such thing as not being able to sell a property because you're blacklisted? It doesn't quite make sense to me.

This post has been edited by -Teddy-: Mar 2 2009, 01:11 AM

my apt just 15 mths completed & i plan to refinance with the same bankf for existing loan. Can i do that???
any penalty fee?? is that less complicate if do refinance with the same bank??

Erm, sorry to say but did you read the fine print that you need to pay RM30k first to AA and they are the one who will be securing the bank loan for you using your home as a collateral?

AND, IF they couldn't secure a bank loan for you, you can kiss your RM30k goodbye.

Even if you get the loan, you need to pay RM50k fuel fees.

Belum mula belajar sudah hutang RM80k.

I suggest you forget this unless you're filthy rich.

Penalty since it is within 5 yrs lock in period.
If you are just looking to reduce the interests rate, then they might reduce it a little... and probably increase the lock in period again.

What? I will need to pay 80k if the loan is approved? What if someone is borrowing 50k, then he will get a -30k loan?

Seriously, I need some clarification here. Wouldn't be able to make it if I really have to fork out 80k to get the loan.

This post has been edited by -Teddy-: Mar 2 2009, 02:07 PM

You can start asking here for more info. There are a few hidden charges which you wanna take note of.

About refinancing, well you need to find out how come your mom is blacklisted first.

Or, you can go for the cadet plan

Wow..
PPL around RM30k
FATPL around RM150k
CPL? Hmm..

I wonder how long you need to pay them off

I don't mind paying back the bank after I get a job. Say I get at least 3k per month, I can really pay them 2k and I myself keep 1k. I'm not flying to be rich, I want to fly because I want to. I will find out more about the blacklisting a while later.

Mind letting me know more about the 80k thing? It's like another problem comes before the previous one is solved.

Woooo don't get me wrong. I'm not saying that you need to fly to be rich, I'm saying that you need to be rich to fly

Steps for self financing :
1. Give AA 30k
2. AA go and get loan for you
3a. AA cannot get loan for you, you failed, 30k gone
3b. AA managed to get loan for you, you pay extra 50k for fuel cost for your course

So, you need to have 30k in hand first. Erm, uncle is a pilot so this is word of mouth, you may need to ask more about all those hidden cost.

You might find this calculator handy clicky

Huh? Who's AA? I thought self financing is like, go to the bank, mortgage the house, get the money, pay the school then fly while paying installments?

This post has been edited by -Teddy-: Mar 2 2009, 02:30 PM

Air Asia Anyway you go and find out more info from AA first. You will understand later

I don't need to get through AirAsia to get the loan I think. It has nothing to do with them anyways, since I'm not being a cadet with them or something, but going private. Have not heard of AirAsia will help aspiring pilots to get loans before, I will check it out. Thanks for info.

---

Added on March 2, 2009, 3:08 pmOkay, my mom said she has a name in Company A. Company A owes Company B money. Then Company B apply to make my mom to be blacklisted, and now she can't change her property's name to someone else.

My question is, is this even bank related? In this case, will the bank still consider my case?

What kind of blacklist can bar my mom from selling her property? In this case, if she can't sell the property, does she has the right to mortgage it?

I start to think that it's not that she's blacklisted or something, but she is being sued and the court freezes her property? Is that possible? If this is the case, can someone mortgage a frozen property?

This post has been edited by -Teddy-: Mar 2 2009, 03:14 PM

can i get ZEC for refinancing? actually my loan still in lock-in-period so is that a good move to do refinance?

Yes.

Which is why your mom need to settle the dispute first (if she does have a name in Company A).

After she settle the dispute, and fully pay off the debt she owed the company, can she get her name removed from CTOS? I mean, that particular record that gets her assets frozen?

If yes, how, and how long will it take?

Yes there are ZEC package for refinancing too
ZEC doesn't mean the bank will cover your penalty you know.
Some might actually add in the penalty to the loan (refinancing amount).
Some won't even bother.
I think i read on MBB or some other bank pamphlet that they absorb lock in , but up to certain amount only.

Also there are partial ZEC and FULL ZEC. (some lame bank is doing that.. so CHECK)

Nope, the name will still be in CTOS afaik.