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> How to Calculate Home Loan, Can help? (Household)

evard
post Mar 19 2009, 05:21 PM


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Hi, I am new with this home loan things. Hope you all can help me figure out this. Thanks!

For example, Public Bank home loan (Pbe Bank Home Loan Page)
What is the different between Non Free Legal Package and Free Legal Documentation Package?

If I want to buy a house costs RM300,000 with down payment RM20,000 and monthly payment for RM1,500.
I choosed (Fixed for first 5 years)plan, how long can I finish pay for the whole loan?

What does this means?
"1st 5 years: 5.95% p.a.
Thereafter: BLR - 1.65% p.a"
Is this means 1st 5 years are 5.95% interest, then the following years are 1.65%?

Why "fixed for first 3 years" plan interest is lower than "fixed for first 5 years"?
I thought the more fixed years I take, the lower interest I get.
Can explain some about this?

Final thing is "what does means taking home loan are better than put in FD?"
QUOTE
A person put in FD to collect interest of 3.7% per annum or payup yr loan of interest 6.75% per annum?
example 100k
interest per year in FD is RM3700
interest Housing loan per year is RM6750
What I think is the interest of FD is credit into the saver account, but the interest of house loan was paid to the bank because it won't added into the house value.
The changing of house value is depends on the market right?

Thanks for your help. smile.gif
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onnying88
post Mar 19 2009, 08:28 PM


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QUOTE(evard @ Mar 19 2009, 05:21 PM)
Hi, I am new with this home loan things. Hope you all can help me figure out this. Thanks!

For example, Public Bank home loan (Pbe Bank Home Loan Page)
What is the different between Non Free Legal Package and Free Legal Documentation Package?

If I want to buy a house costs RM300,000 with down payment RM20,000 and monthly payment for RM1,500.
I choosed (Fixed for first 5 years)plan, how long can I finish pay for the whole loan?

What does this means?
"1st 5 years: 5.95% p.a.
Thereafter: BLR - 1.65% p.a"
Is this means 1st 5 years are 5.95% interest, then the following years are 1.65%?

Why "fixed for first 3 years" plan interest is lower than "fixed for first 5 years"?
I thought the more fixed years I take, the lower interest I get.
Can explain some about this?

Final thing is "what does means taking home loan are better than put in FD?"

What I think is the interest of FD is credit into the saver account, but  the interest of house loan was paid to the bank because it won't added into the house value.
The changing of house value is depends on the market right?

Thanks for your help.  smile.gif
*
1st question
Different between Non Free Legal Package and Free Legal Documentation Package?

Answer:

Non Free Legal Package = Borrower need to pay all the legal fee expenses
With this package borrower can get a better lower interest rate, but need to pay about 5-6k legal fee ( in your 300k loan case)
either by cash or finance in your loan
( if finance in loan= RM300000 - RM20000 + RM5-6k = total loan amount =RM285-286k)
You need to consider the margin of your property value to finance the legal fee

Free Legal Documentation Package = Borrower no need pay any legal fee, all will be pay by the bank
With this package borrower have to pay higher interest rate compare or non free package. But borrower no need take out few k cash to pay

It's actually the same things as the different in interest rate already cover the legal fee already. But if you have strong cash flow, i strongly suggest you take non free package + flexi loan. (you may ask me more detail if you need it )




2nd question
If I want to buy a house costs RM300,000 with down payment RM20,000 and monthly payment for RM1,500.
I choosed (Fixed for first 5 years)plan, how long can I finish pay for the whole loan?

Answer:
Base on today's housing loan rate. For example BLR-2% for Free Legal Package Loan (current BLR= 5.5%)
I assume your loan amount = RM300k - RM20k = RM280k
You may settle you loan in 22years with monthly installment = RM1523
(if the BLR remain 5.5% for next 22years)



3rd Question
What does this means?
"1st 5 years: 5.95% p.a.
Thereafter: BLR - 1.65% p.a"
Is this means 1st 5 years are 5.95% interest, then the following years are 1.65%?

Answer:

"1st 5 years: 5.95% p.a. = interest rate will fix at 5.95% for the year 1 to year 5

Thereafter: BLR - 1.65% p.a" = Interest rate wil base on that particular year's BLR then minus 1.65%.
( For example using current BLR rate as 5.5%, so your interest rate = 5.5%-1.65% =3.85%)
The BLR rate is control by the Bank Negara and can be change from time to time.
(If this is the offer for you from PB bank,i will suggest you to get loan from others bank, as the rate now will be around 3.5%-4% only. 5.95% for first 5 years is way way too high for today's Home Loan)


4th Question
Why "fixed for first 3 years" plan interest is lower than "fixed for first 5 years"?
I thought the more fixed years I take, the lower interest I get.
Can explain some about this?


Answer:
For normal case, fixed for more years will get lower interest rate as i know.
For your question, i think it's because of the Non Free and Free Legal package. As i know normally for Free Legal Package, it will lock you for at least 5 years. For 3 years lock in, You have to get the Non Free Legal Package. That's why it's lower in this case.

But still, the term and condition is varies in different bank and subject to your profile also.


Last Question
Final thing is "what does means taking home loan are better than put in FD?"

Answer:
I believe what people's mention is put money in Home Loan is better then put money in FD
For example.
If a person with a Home loan of RM300k, and Saving RM100k in FD
Calculate with today's rate.
Loan with 100k x3.5% interest = RM 3500 you need to pay to bank yearly
Put FD with 100k x 2.5% interest = RM2500 bank pay to you yearly
If you put in FD rather in your home loan, mean every year you need to pay extra RM1000 to bank. So which is better to put your money?

Somemore with the Flexi Loan, your RM100k that put in bank still can be use anytime you want, and the interest will be count on daily.
If in FD, emergency withdraw in middle time of the year, all your interest will gone, you'll lose more again. smile.gif


Hope my explaination give some point of view to you.
Any question feel free to ask me too.
If you need help in getting loan, i would like to give a hand to help too.
I'm a mortgage loan consultant and my job is teaching my client to save interest for their housing loanand help them to apply loan from any bank.
And my service is totally free of charge. smile.gif

This post has been edited by onnying88: Mar 19 2009, 08:41 PM
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evard
post Mar 19 2009, 09:25 PM


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Hi, onnying88.
Thanks you very much.
You answers help me a lot. Now, I am clear with everything. : )
Will ask you again if I have any questions.

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