Category: Loan (7)

Property loan base on net selling price

PETALING JAYA (Nov 20, 2013): A new Bank Negara Malaysia (BNM) ruling that requires banks to give out property loans based on net selling price, which excludes rebates and discounts, rather than gross selling price may affect loans growth for banks this year, Alliance Research Sdn Bhd said.

 

Its analyst Cheah King Yoong said a BNM circular sent out to banks last Friday announced not only the expected ban on the developers interest bearing scheme (DIBS) and the interest capitalisation scheme (ICS), but also an unexpected rule for all banks to determine their loan-to-value (LTV) ratio based on net selling price rather than gross selling price.

 

Banks can no longer provide financing for projects approved by authorities with DIBS on or after Nov 15, 2013 effective immediately. While those projects approved before Nov 15 have until Jan 1, 2014 before the prohibition is effected.

 

“We currently project 2014 loan growth target of 9%, supported by stronger growth of business loans stemming from the ongoing implementation of Entry Point Projects under the government’s Economic Transformation Plan, which is expected to fill up the vacuum left by the moderation in household loans. However, in light of the more onerous property lending curb, we will be reviewing this target,” Cheah said in a note to clients yesterday.

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how_to_check_ccris_credit_report_malaysia

CCRIS stands for Central Credit Reference Information System. It is a system created by Bank Negara Malaysia (BNM) which synthesizes credit information about a borrower or potential borrowers into standardized credit reports. The information is available to financial institutions (Banks) and the individuals (or company directors) themselves upon request.

 

Individual banks’ systems are typically already tightly integrated to the CCRIS system and automatically extract an individual’s/entity’s credit report during the credit approval process.

 

Every participating financial institution (Includes all licensed commercial banks, Islamic banks, investment banks, development banks, some of insurance companies, payment instrument issuers and rehabilitation institutions) is required to submit their customer’s credit conduct to this centralised system.

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DIBS_Logo

DIBS (Developer Interest Bearing Scheme) is a mean that the developer of the project will bear the interest charge by bank during the whole construction period, buyer no need to do any installment until the construction complete.

 

This is a very common marketing strategy that use by developer to market their new launch project nowadays. This is something good to the purchaser to have a better cash flow while the property you bought is still under construction.

 

Make it simpler
You purchase your property for RM 300,000.00. You pay Developer A a minimum of RM 15,000.00 (as down payment of 5%, sometimes this can be 10% or more depending on your loan) and you borrow from a bank for the remaining RM 285,000.00. You opt for interest only loan package from the bank (that means, you only pay the interests but not the principal of the loan during the construction period).

Under DIBS, Developer A will pay the monthly interests until completion of the property. In other words you don’t have to pay anything to the bank until construction completes. You only start paying the bank instalments after completion of the property. So, you only pay RM 15,000.00 and you can secure the property during the construction period (2 years for example) without paying a single cent.

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Rеfіnаnсіng уоur hоmе mortgage соuld роtеntіаllу rеduсе your іntеrеѕt rаtе аnd mоnthlу рауmеntѕ оr gіvе уоu access tо ѕоmе оf the equity іn уоur hоmе. But thаt dоеѕn’t nесеѕѕаrіlу mеаn іt’ll save уоu mоnеу оr іt’ѕ a gооd dесіѕіоn.

If уоu’rе thіnkіng аbоut rеfіnаnсіng уоur mоrtgаgе lоаn, here are some things to kеер іn mіnd before you pull thе trіggеr.

Yоur rеаѕоn fоr rеfіnаnсіng

Rеfіnаnсіng a hоmе lоаn саn bе еxреnѕіvе, so іt’ѕ сruсіаl tо knоw whу уоu want tо dо it. For example, mауbе you wаnt a lower іntеrеѕt rаtе оr mоnthlу рауmеnt, or you want tо dо a саѕh-оut rеfіnаnсе tо рау оff hіgh-іntеrеѕt debt оr make ѕоmе hоmе іmрrоvеmеntѕ.

Whatever your reason, make ѕurе it’s wоrth thе соѕtѕ аnd work аѕѕосіаtеd wіth rеfіnаnсіng your еxіѕtіng mоrtgаgе. Onlіnе mаrkеtрlасе Crеdіblе allows you to fіnd оut whаt rates уоu ԛuаlіfу for right nоw. Chесk іt оut.

The сurrеnt mortgage rаtеѕ

It generally doesn’t mаkе sense to rеfіnаnсе уоur hоmе lоаn unless thеу’rе lоwеr than what you’re currently paying. Bеfоrе you start ѕubmіttіng applications, check thе current mоrtgаgе rates tо see how thеу соmраrе wіth your еxіѕtіng mоrtgаgе.

Alѕо, keep іn mind thаt just bесаuѕе mоrtgаgе rates are lоwеr nоw, thаt dоеѕn’t mеаn they’ll ѕtау thаt way. If reducing уоur іntеrеѕt rate and mоnthlу payment аrе your tор рrіоrіtіеѕ, start аррlуіng ѕооnеr rаthеr thаn lаtеr. We suggest visiting websites like SoFi to see the options they offer.

Yоu can visit Credible tо соmраrе mortgage rаtеѕ frоm multірlе lenders іn оnе рlасе.

Yоur сrеdіt ѕсоrе

Whіlе аvеrаgе mоrtgаgе rаtеѕ саn gіvе уоu an іdеа оf whеthеr оr nоt you саn ѕаvе, your асtuаl rate оn a rеfіnаnсе lоаn wіll dереnd lаrgеlу оn уоur credit hіѕtоrу, еxіѕtіng dеbt, and іnсоmе.

Chесk your сrеdіt ѕсоrе to ѕее where you ѕtаnd. If іt’ѕ lower thаn іt wаѕ whеn уоu first bоught thе hоmе, уоu may need to tаkе ѕtерѕ tо іmрrоvе your score before уоu аррlу. Credible’s оnlіnе tооlѕ саn hеlр уоu compare lenders wіthоut аnу іmрасt on уоur credit ѕсоrе.

Yоur home’s еԛuіtу

If уоu’rе hоріng tо tар some оf your hоmе еԛuіtу wіth a саѕh-оut refinance, thе hоmе value іѕ аn important іndісаtоr of whether you’ll qualify and hоw much you саn tаkе оut.

In general, lеndеrѕ wіll аllоw you to bоrrоw uр tо 80 реrсеnt of уоur home vаluе. So іf thе hоmе іѕ worth $300,000, thе mаxіmum nеw lоаn is $240,000. If your сurrеnt lоаn is fоr $200,000, уоu соuld potentially gеt uр to $40,000 іn cash wіth a cash-out rеfіnаnсе. But іf your lоаn is at $240,000 оr аbоvе, уоu lіkеlу won’t qualify.

Mortgage Reducing Term Assurance (MRTA) is also frequently referred to Mortgage Life Insurance. MRTA helps you settle your housing loan in the event something happens to you.

 

Although many people don’t like talking about it, disability, illness or death can occur any time. MRTA will cover the unpaid portion of your loan if this happens. It gives you peace of mind and protects your family from losing a home. It provides coverage even during the construction period. The premium is reasonable, and it can even be financed by your bank.

 

What are the benefits?

  • Lump sum repayment to your mortgage loan in case of death or total and permanent disability due to natural causes, illness or accidents.
  • Coverage is 24 hours, worldwide.
  • Premiums can be financed by the bank.
  • Discount on the premium for joint life application if your home is jointly owned by your spouse or immediate next of kin.

 

What does MRTA cover?

It covers disability, illness or death and also total and permanent disability. However, there are exclusions such as:

  • Death due to suicide and AIDS/HIV
  • Total or permanent disability due to self-inflicted injuries, armed forces, riot and civil commotion, flying other than as a fare-paying passenger, racing on a horse or wheels
  • Pre-existing conditions such as AIDS/HIV

 

How much would my premium be?

Premium factors depend on the sum assured, interest rate, term, construction period, premium financing, joint-life, age at next birthday.

If you are between 18 and 60 years of age and in good health, you are eligible to take up MRTA. You can always make an application by filling up an application form at the Bank.

Mar
15

Housing Loans

home-loans

Introduction

Buying a house is an exciting event. It will probably be the biggest purchase you will ever make in your life. Understanding the steps involved in securing the different types of canada loans will help you save time and avoid uncertainty and anxiety. Finding and utilizing the right form of bad credit loan providing company such as the Achieve Finance in Texas must be one of the very first steps to consider before narrowing down to one of the houses among the list. This information in the following pages will give you an insight into the various issues on financing a house and outlines the major steps in the overall process of financing a house. It guides you through the basics, explains the technical terms and gives you invaluable tips on financing a house.

Buying a House

Buying a house is a major step, so it deserves careful thought and planning. If you are buying a property under construction, you should check the background of the developer. You should ensure that the developer:

  • Has a valid licence issued by the Ministry of Housing and Local Government which is still in force (not expired)
  • Has a valid advertising and selling permit issued by respective local authority which is still in force
  • You have the right to enquire from the developer, information on licence and permit. You can also refer to the Ministry of Housing and Local Government for further clarification. A developer with a good track record reduces the risk of the project being abandoned.

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These are the basic information that every home buyer should equip themselves with pertaining to Base Lending Rate.

ec-realtycom
What is Base Lending Rate (BLR)?

  • A minimum interest rate calculated by financial institutions based on a formula which takes into account the institutions cost of funds and other administrative costs.
  • Typically similar amongst major banks.
  • Adjustments to the BLR are made by banks at the almost same time, though not regularly.
  • BLR adjustments correlate with adjustments of the Overnight Policy Rate (OPR) which is determined by Bank Negara Malaysia (BNM) during Monetary Policy Meeting
  • Effective 1 November 1995, BNM imposed a ceiling on the BLRs quoted by banking institutions. The ceiling rate would be determined by a formula. This framework was further revised on 1 September 1998 to enhance the speed of transmission of changes in BNM’s monetary policy (via revisions to intervention rate and SSR) to changes in the economy’s interest rate levels.
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