Apr 12 2009, 10:32 AM
QUOTE(sunny2009 @ Apr 7 2009, 01:15 PM)
Hello,
I got a house loan:
Duration: 20 years
Amount: RM198k
Start: June 2005
Package: Renegotiated once in 2008 and reduced the rate to BLR-1.75%
Min years to pay to avoid penalty: 2008 + 5 years.
I did prepayment several times: RM30k, RM40k
with an outstanding amount of abt RM100k.
Now, the BLR has dropped and I thought of settling the loan 100% with the following considerations:
- At this time, ppl tend to keep cash as economy is bad. Should I pay or stay?
- If I pay, I might get:
-penalty 5%
-income tax could go after me also.
-not so much cash in my hand.
Should I re negotiate the interest again?
Share your thoughts.
In y our case, I would say, do nothing. BLR has dropped, but your rate is pegged to BLR anyway, and you will get at most maybe minus 2%, which will take at least 8 years to breakeven the cost if you settle now.I got a house loan:
Duration: 20 years
Amount: RM198k
Start: June 2005
Package: Renegotiated once in 2008 and reduced the rate to BLR-1.75%
Min years to pay to avoid penalty: 2008 + 5 years.
I did prepayment several times: RM30k, RM40k
with an outstanding amount of abt RM100k.
Now, the BLR has dropped and I thought of settling the loan 100% with the following considerations:
- At this time, ppl tend to keep cash as economy is bad. Should I pay or stay?
- If I pay, I might get:
-penalty 5%
-income tax could go after me also.
-not so much cash in my hand.
Should I re negotiate the interest again?
Share your thoughts.
Also, it's not a flexi loan, so you can't park your money there and withdraw later for future use (or can you?), so, keep the cash and start aiming now for other properties. If possible, negotiate for RESTRUCTURE, ie if the value of property has increase, get the extra cash out. But MAKE SURE NO NEGATIVE CASHFLOW.
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