| Home Financing |
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Whether you're buying your first house, moving to a condo, or searching for your dream home, consider some points before starting the process: |
- How much can I afford?
- What will my monthly payments be?
- What can I do to reduce my monthly payments?
- What do I need to know about home equity loans and credit reports?
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| How much can I afford? |
This depends on your income and other financial obligations. As a rule of thumb, most buyers purchase properties that cost between 1.5 to 2.5 times their annual income. For example, a buyer earning RM40,000 a year would purchase a property between RM60,000 and RM100,000. Furthermore, the monthly payment should not exceed 1/3 of your gross monthly income. In assessing your payment capability, the we would also take into account your other debt payments such as car financing, personal financing and credit cards.
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| How much financing can I obtain? |
This will depend on the value of your property, your income and your payment capability. Margin of financing can go up to 95% (inclusive of Mortgage Takaful). The higher the margin and the shorter the tenure, the higher you will have to pay per instalment.
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| How long does it take to process an application for financing? |
It usually takes about one to two weeks for your financing application to be approved from the time you supply complete documentation. You can ask for the checklist of required documents to be submitted to avoid unnecessary delays. |
| What are the advantages of house financing? |
- The selling price of the property is fixed at the time of contract.
- There is no additional or hidden costs that will change the selling price of the property.
- The repayment amount is not subject to fluctuations in interest rates.
- There is no compounding of arrears and it allows for better financial planning.
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| Why do I need a valuation? |
Valuation is needed if you are purchasing a completed property. We requires a valuation to ascertain whether the property provides sufficient security for the financing given. It also provides an indication that the property is worth what you are paying for. |
| Who pays for the legal fees? |
Generally, the legal fees are borne by the purchaser. However, certain developers and our organizatioan may offer to pay the legal fees on the legal documentation as part of their marketing package. In addition, some banks also extend financing for the documentation fees. |
| What if I run into financial difficulties and cannot meet the payments for my financing? |
| If this happens, you should contact your advisor to discuss a reasonable payment programme, which could include extending the tenure of the financing or reducing the instalment amount, provided the amount outstanding is still within the selling price. |
| Why does my outstanding financing remain high at the initial stage despite payments made? |
| During the early years of the financing, a significant amount of your payments will go towards the payment of the our organizations's profits. So, if you make partial pre-payments to pay the principal sum outstanding, you will be able to save on payments on our organizations's profits. |
| What is the most convenient way to pay for my financing? |
| There is a wide range of services offered to make payments easier for you. Some of the alternative ways of servicing a financing include: |
Open a savings/current account and arrange for standing instructions with minimal charges (if you maintain deposit and financing accounts with the same bank, the charges may be waived)
• Through an ATM transfer
• Internet banking
• Telephone banking service
• Deposit your cheque at the deposit machine or send it directly to your bank. |
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