Purchasing New Property
Are you facing any challenges securing your home loan? Don’t worry, you’re not alone.
Today, you will find that securing a home loan is an endless challenge, even for those earning 5-figure salaries. Besides the tight mortgage requirements, most people especially the first-time buyers are uncertain over the home loan application procedures and spend a lot of time checking out various banks in order to obtain the best deal.
Start your journey to own your dream home with us.
Market Value & Eligibility
You need to know your property value when you intent to do the following.
– Buying a sub sales property
– Buying an auction property
– Refinancing your property
– Sell your property
Know how much you can borrow and match with the house that you can afford. This will improve your chances to own your dream house or get your home loan application approved.
What is a Mortgage/Home Loan?
A mortgage / home loan is a loan provided by a mortgage lender or a bank that enables an individual to purchase a home. While it’s possible to take out loans to cover the entire cost of a home, it’s more common to secure a loan for up to 90% of the home’s value.
The loan must be paid back over time. The home purchased acts as collateral on the money an individual is lent to purchase the home.
Types of Mortgages
The two most common types of mortgages/home loan are fixed rate and Base Rate (BR).
Fixed-rate mortgages provide borrowers with an established interest rate over a set term of typically 15, 20, 30 or 35 years. With a fixed interest rate, the shorter the term over which the borrower pays, the higher the monthly payment. Conversely, the longer the borrower takes to pay, the smaller the monthly repayment amount. However, the longer it takes to repay the loan, the more the borrower ultimately pays in interest charges.
The greatest advantage of a fixed-rate mortgage is that the borrower can count on their monthly mortgage payments being the same every month throughout the life of their mortgage, making it easier to set household budgets and avoid any unexpected additional charges from one month to the next. Even if market rates increase significantly, the borrower doesn’t have to make higher monthly payments.
Base Rate Mortgages / Home Loan
Base Rate(BR) is an interest rate that the bank refers to, therefore it decides on the interest rate to apply to your mortgage/home loan. Prior to 2015, that interest rate was referred to as the Base Lending Rate (BLR). Base rate mortgages/ home loan come with interest rates that can and usually, do change over the life of the loan. Increases in market rates and other factors cause interest rates to fluctuate, which changes the amount of interest the borrower must pay, and, therefore, changes the total monthly payment due. With base rate mortgages/ home loan, the interest rate is set to be reviewed and adjusted at specific times. For example, the rate may be adjusted once a year or once every six months.
As of up to July 2020, the central bank (Bank Negara Malaysia) has reviewed the base rate 4 times.
22th 2020 from previous 3% to 2.75%
3rd March 2020 from 2.75% to 2.5%
5th may 2020 from 2.5% to 2%
7th July 2020 from 2% to 1.75%
Malaysia’s central bank cut its key interest rate four times this year to its lowest since 2009, to help malaysia economy weather the impact of the coronavirus pandemic and a collapse in prices for its energy exports.
While Base rate mortgages/ home loan make it more difficult for the borrower to gauge spending and establish their monthly budgets, they are popular because they typically come with lower starting interest rates than fixed-rate mortgages. Borrowers, assuming their income will grow over time, may seek a base rate mortgages/home loan in order to lock in a low fixed-rate in the beginning, when they are earning less.
The primary risk with a base rate mortgages/home loan is that interest rates may increase significantly over the life of the loan, to a point where the mortgage payments become so high that they are difficult for the borrower to meet. Significant rate increases may even lead to default and the borrower losing the home through auction.
Mortgages are major financial commitments, locking borrowers into decades of payments that must be made on a consistent basis. However, most people believe that the long-term benefits of home ownership make committing to a mortgage/home loan worthwhile.
Overdraft mortgage/home loan
Overdraft loan is suitable for short term borrowing and emergency fund. In this type of loan, you only need to pay the interest rate monthly, and if you pay more you can lower your principle owed to the financial institution. Normally this type of loan the interest is higher than other type of loan. It also comes with a commitment fees if the fund is not utilized, term and conditioned applied.
Frequently Asked Questions
1. What are the penalties if I settle the loan before the lock in period?
Most of the bank lock in period is between 3 – 5 years. The penalty charges can range between 2%-3% of the full loan amount.
2. Can I pay more every month to reduce my principle amount?
Most bank allows you to make extra payment to reduce your principle loan amount caused mortgage/home loan interest is calculated as daily interest. It is best to look into your bank loan letter offer before make any plan for this.
3. What are the legal fees charges that customer needs to pay?
In Malaysia, you have to pay for legal and stamp duty charges when you take a mortgage/home loan. You may look into some bank campaign that comes with zero moving cost packages occasionally. Zero moving costs mean that bank absorbs part or all of the legal and stamp duty charges. However, some banks do this with a very competitive rate and longer lock in period, so do your calculations and budgets before you accept the offer.
4. If I have late payment more than one month for my loan facility can I apply for a loan?
What you should do is to make appointment with your existing bank loan facility bank that you have defaulted to restructure and reschedule the loan repayment first then only apply for a new loan.
5. Where can I check or print my ccris report
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