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KNOWLEDGE

Basic Information In Obtaining A Home Loan


STEP 1
  • Purchaser to ensure eligibility of loan amount for the property.
  • Monthly installment and current commitments (personal loan, car loan etc) should not exceed one-third of your monthly salary.
  • If you cannot decide how much you can afford, use our Home Loan Calculator to help you. It provides an estimate of how much you will be eligible to borrow as well as monthly repayment.
STEP 2
  • Choosing type of housing loan:
    (i) Fixed Interest Loan
      Monthly installments are fixed throughout the loan tenure.
    (ii) Conventional Loan
      Montly installments may vary during the loan tenure as interest rate for loan shall depend on the Base Lending Rate (BLR) fixed by Bank Negara Malaysia.
STEP 3
  • Bank usually provide margin of financing from 80% and above which may include Mortgage Reducing Term Assurance (MRTA).

    For example:
    Property purchase price RM 146,900  
    Loan amount granted to purchaser based on eligibility (95%) RM 139,500
    MRTA RM 3,480

    Scenario 1    Loan granted with MRTA
    Property purchase price RM 146,900  
    Less: Loan amount granted to purchaser based on eligibility (95%) RM 139,500
    Differential amount to be paid by purchaser RM 7,400
    MRTA RM 3,480
    Total amount to be paid by purchaser RM 10,880
    Note:
    Purchaser is required to pay the differential amount (RM7,400) and MRTA (RM3,480) to the developer and the bank respectively.

    Scenario 2    Loan granted without MRTA
    Property purchase price RM 146,900  
    Less: Loan amount granted to purchaser based on eligibility (95%) RM 139,500
    Differential amount to be paid by purchaser RM 7,400

  • MRTA is computed by the age of the borrower(s), loan amount, tenure and interest rate.
  • Members of Employee Provident Fund (EPF) may make withdrawals from Account 2 for the purchase of the property.
STEP 4
  • Documents required for loan application:
    1. Photocopy of identity card (front & back);
    2. Photocopy of the last 3-month salary slips;
    3. A copy of EA form or Form J and letter of employment;
    4. A copy of the letter of offer of purchasing the property from the developer;
    5. A copy of the Sale & Purchase Agreement or Letter of Offer / booking receipt from developer;
STEP 5
  • Execution of loan agreements
    (i) Property under construction
    • Purchasers have the option to appoint either their own solicitor or opt for developer's panel. (Note: Please check whether the appointed solicitor is in the bank's panel)
    • Upon acceptance of the loan offer letter the bank will issue a Letter of Instruction to the aforesaid solicitor for the preparation of the Loan Documents.
    • Purchasers are advised to follow-up with the solicitor to ensure the documents are prepared for their execution soonest possible to avoid any late interest charges by the developer.
    • Upon the execution and stamping of the Loan Documents, the solicitor shall advised the bank for the payments to be disbursed to the developer in accordance to the completion of stages stipulated of the schedule in the Sale & Purchase Agreements.
    • Schedule of construction however, purchasers are also advisable to follow up with the bank and solicitor in ensuring the smooth flow of the documentation and loan releases.
    (ii) Completed property
    • Purchasers may appoint their own solicitor for advise.
      (Note: Some developers and financiers may provide FREE legal fees.)
STEP 6
  • Borrowers are advised to pay for the monthly installment promptly as to avoid any late payment charges.
  • Failure to pay for the monthly installment consistently may lead to the foreclosure of the property by financier.