SMART APPROACH
Liew suggests that one realises the
fact that developers will engage,
both lawyers and bankers (whowill
most likely put their interest first)
on their panel. “It is better to at least
get a second opinion on legal
matters or find out about other
mortgage plans offered by other
banks – as a comparison … or at least
check out RinggitPlus,” he says. You
can leverage on the information and
use it to negotiate for better rates so
you can get a good deal.
“Quite often, buyers can’t
avoid it anyway as developers will
‘require’ you to use their panel
‘vendors’ if youwant special
promos or special discounts. Still, it
is worth just making sure
everything is in order, by getting a
second opinion,” adds Liew.
“At the core, home loans are
created for consumers to own
homes without having to save up 20
to 30 years first. So, in effect, loans
are all consumer-centric. However,
you have to keep inmind that banks
will never sell products which don’t
make themmoney. Your job as a
consumer is tomake sure you are
getting the best loan for you - there
is no one size fits all. This includes
checking the interest rate, which
type of home loan suits you, your
lifestyle best, etcetera.”
LIEW’S RECOMMENDATIONS
Sowhich loans would be best to
consider with themany offered by
loans”, “savelink
options”,
“conventional
loans”, “mortgage
loans”, “asset
acquisition
financing”, “term
equity financing”
and the long line of
Islamic home loans
will leave you
perplexed.
Ringgit Plus
CEOHann Liew
says, “Each
person’s
circumstance is
different, so the big
rule of thumb
would be:
a) for people with steady incomes –
conventional variable rate;
b) for those with lumpy incomes
(commission earners, bonuses, or
those with large savings or FD etc) –
flexi variable rate; and
c) for people who are very risk
averse and do not want to be
subjected to the fluctuations of the
BLR (base lending rate) in the short-
medium term– fixed rate loans.”
As an entrepreneur, Liewdoes
not have a fixed/steady income,
so his home loans are flexible
ones. “If I have extra cash at any
time, I can dump it in to reducemy
interest costs.” He adds that even
though a wily investor would
suggest that he
maximise on his
loan amount at all
times and go for
the conventional
loan so he can
invest the rest of
his money in
“higher-than-
mortgage-interest
financial assets,
he says: “Someone
likeme with lumpy
incomemight
need the cash on
short notice.
Investments may
not giveme the
short-term
liquidity I need.”
banks and
financial
institutions
(even if you are
not looking to
apply for a loan)?
Says Liew: “I
think it is fine if
you stick to
these three types
of loans – the
conventional
variable rate
(which is most
common), the
flexi variable
rate or the fixed
rate. All these
three loan types
have tenures
that can be negotiated – terms of
between five to 35 years, depending
on other factors. Highmargin and
low interests are dependent mainly
on the bank’s appetite and the
consumer’s own position, and these
apply to all three (loan types).”
Liew also informs that many
people would classify Islamic Home
loans as the fourth type … “but they
are economically similar to the
consumer as the other three … they
are just Shariah-compliant
versions,” he says.
IMPORTANT PIECE OF ADVICE
“One of themost important things
about home loans that I think
Malaysians need to know is not to
have thementality of ‘what’s the
most that the bankwill approve
me for’, but ‘what I can afford’,”
says Liew.
“Do your own personal budget,
find out howmuch you can afford
for your home loan installment and
back-calculate howmuch you can
borrow from the bank, rather than
the other way around.”
Read our column next week for
more information and guidelines on
various available loan options and
recommendations, besides other
practical tips and suggestions.
Please email your feedback
and queries to:
X
SEPTEMBER 5, 2014
B
EFORE
even deciding
on purchasing a house,
it is advisable to consider
your initial deposit and
mortgage sustenance capability,
howmuch you have in liquid
savings and your financial capacity
estimated from regular/monthly
earnings and investments. Many
people look for their dreamhome
first, then ponder about how to
make their purchase. It is both
wiser and advisable to first
calculate one’s regular income,
averagemonthly surplus and
disposable income after adjusting
for living expenses. Only then,
look for properties which fall
within comfortable reach.
This way, the loan amount
eligibility can be gauged after
adjusting the initial deposit
potential. Helpful loan
affordability calculators are
often provided on bank and
financial institutionwebsites.
BACK TO BASICS
It is necessary to estimate the liquid
capability and disposable cash you
have at hand. This will give you
some degree of confidence should
you require financial back-up at any
time. Youmight also need to dip
into savings when buying your
home, to cover miscellaneous
payments, fees and charges
required, prior to loan approval.
Before venturing to buy a house,
onemust review the following
financial important considerations:
• Purchase price of property
• Lawyer’s fees for the S&P
Agreement and financing
facility agreement
• Processing fees for the
financing application
• Valuation fee
•Maintenance fee &deposit if you
are purchasing a condominium
• Renovation
• Deposits with utility companies
eg. PUAS, TNB, TM
• Quit rent, assessments
•Mover’s fee
• Insurance premium
for GroupMortgage Term
Assurance (GMTA) or GMTT
• Insurance premium for Home
Owner’s Insurance
(Retrieved fromcimb.com.my)
GOOD TO KNOW
The next step is to decide which
bank and home loan facility is most
suitable. While it may sound easy,
youwill be amazed and dumb
founded by the various types of
home loans offered, banking terms
and financial jargonwhen you
explore the various (home loan)
options online. Catch phrases like
“flexi loans”, “flexi variable loans”,
“semi flexi loans”, “tiered loans”,
“home financing-i”, “fixed rate
Home
loans
PART1
>Overviewandmost essential information
Bandar RimbayuFriendshipCharityRun2014
one-of-a-kind.
In line with its green and
community-centric foundation,
come Sept 27, the developer will
flag off a “Friendship Charity Run”.
The event is aimed at encouraging
healthy lifestyles, to inculcate
a love for the outdoors, as well
as to strengthen relationships
and ties between families and
friends. Funds raisedwill
be donated to the Children
Wish Society (CWS) and
the National Kidney
Foundation (NKF).
Closing date for
registration for the run is
Sept 21. The route will
cover 6kmand requires a
pair per team. This offers a
chance for family and
friends to run together and
bond in a fun and healthy
manner. There will be
stations along the route
where participants will need to slow
down and carry out simple activities
beforemoving on.
Fees stand at RM50 per pair, of
which eachwill receive a surprise
running bib and a goodie bag. The
first 50 teams to complete the run
stand a chance towin a prize of
RM100 per team. There will also be
lucky drawprizes worth RM10,000.
So, put on your running shoes,
call on your friends and family
members, and enjoy a fun-filled
day outdoors. For details, log on
to rimbayu.comor IJMLand’s
official website.
epitomises green living at its best.
Fromenergy-efficient smart
solutions, water-savingmeasures
andmany other environmental-
conscious applications incorporated
in the design of the township, the
highlight of this development is the
10-acre urban park known as
The Arc. A private park in the heart
of Bandar Rimbayu, The Arc boasts
an elevated green roof deck that is
IJM
Land Berhad’s Bandar
Rimbayu is situated near Kota
Kemuning. It is a premier
development that has been certified
a green township. Nature-inspired,
Bandar Rimbayuwas also
established to create a sense of
community among its residents.
Tranquil in its lush, green
surroundings of 1,879 acres, this
mixed development township
RHB BANK HOME AFFORDABILITY CALCULATOR (SAMPLE)
Below is a sample of the affordability
calculator gleaned from the RHB website. It
helps loan applicants calculate an estimated
home purchase price based on their income
and debts, assuming they will finance their
purchase using the conventional loan.
• Monthly Income (RM):
• Total Monthly Debt Payments (RM):(Do
not include your current living and housing
expenses.)
• Loan Interest Rate (% p.a.):
• Term of the Loan (years):
• Percent of Down Payment (%):
• Price of My Home (RM):
• Down Payment (RM):
• Eligible Loan Amount (RM):
• Total Monthly Repayment (RM):
Example:
Monthly income: RM3,000.00
Monthly debt payment: RM500.00
Debt Payment interest rate: 5%
Loan term: 20 years
Down Payment: 10%
Loan eligibility: RM126,271.00
Monthly repayment scheme: RM833.00
With a RM14,030.00 down payment, you can
afford a home worth RM140,301.00.
