Nov
21

Foreigners who want to purchase home in Malaysia: Are they entitled for housing loan?

Diverse citizens in the world maybe randomly thinking of acquiring real estates in other countries for variety of reasons; new business ventures, new environment or could be just change of everything. Citizens in other countries usually require asking permission from their central banks before they finally can apply for a housing loan in Malaysia. Currently, there are no prohibitions and regulations for Foreigners in owning a Malaysian real estate.

The following are the categories for Foreigners who are legible to acquire a Malaysian real estate and apply for a housing loan:

 

1.)Expatriates or foreigners with valid working permit and existing business in Malaysia.

Some people believe that it is way cheaper to buy than to rent any property in Malaysia, that’s why inquiries about acquisitions really do arise. Lenders and borrowers relationship is equal in this scenario. A certain bank balance in a local bank and being able to show monthly wages that are credited properly into a local bank account produces right outputs. The borrower must be always ready to show overseas bank statements in case a part of an income is being paid there. Just remain cautious not to be caught in-between jobs. Lenders are more into stability of an individual in a certain setting rather than short new opportunities or jobs even if those jobs pay very well.

 

2.)Expatriates or foreigners under the MM2H program.

Malaysia My Second Home (MM2H) is Malaysia’s Government program allowing foreigners to apply for a 10-year renewable multiple entry visa. The foreigners and expatriates who apply for MM2H are given incentives to experience the life they want to experience in Malaysia. Some Malaysian banks are actually offering flexible financing terms for the expatriate community so they can have loaning options and make things easier for them. Ministry of Tourism or any authorised MM2H agent handles this application. In Sarawak though, MM2H is only available to applicants over 50 years old.

As part of MM2H, a visa application has to be approved first before applicants place a fixed deposit. Applicants will receive a “conditional approval” notification by the immigration department. The letter together with the other documents needed to process everything will be handled by the immigration department until applicants finally have their passports stamped.

Other requirements or categories that have to be met by the applicants for the whole application would be, sponsor assistance, insurance coverage and medical report, education, taxes, security vetting and other as required by the concerned departments and offices. There may be a lot to accomplish to be able to complete the MM2H program, but the Malaysian government is well geared with the whole process so that applicants could follow accordingly.

 

3.)Expatriates or foreigners married to a Malaysian citizen.

Being married to a Malaysian citizen is one of the well-known factors. The Margin of Finance (MOF) maybe really high at about a big percentage of the property value. However, as long as the Malaysian spouse is a co-borrower, banks would look at the application like it’s coming from a Malaysian citizen. Loan tenure could actually go up to seventy years of age depending on younger borrower’s age.

Lenders are geared to base assessments on a single income source as long as income can meet the Debt Servicing Ratios (DSR) of the lender. DSR is the percentage of the borrowers’ gross income that the monthly servicing of the loan applied for would possibly take. A DSR of 40% or below is enough. All calculations are always in Malaysian Ringgit.

Falling under in any of these categories may cover a lot for a foreigner to be entitled with a Malaysian housing loan. But as long as requirements and other processes are delivered well, everything will lead into a properly applied loan.

 

This article is exclusively written for EC-Realty.com by CompareHero.my. The Malaysia’s leading financial comparison portal which helps consumer in finding the right financial products at the right price. Please do check our website to learn more.