Comments on: Question you should Ask Before You Sign the Home Loan Offer Letter

By: Peter Lee

Peter Lee — Wed, 09 Mar 2011 11:06:23 +0000

Hey KC, I am newbie here. so very sorry if i dont know anything. I just google around and found alot of conflicting info on MRTA. Below are the conflicting posts. Hope to hear your opinion. I am going to need to decide soon..so please let me know in your blog. I will be always watching. mrta vs mlta which one is the best housing loan insurance MythBusters : Must Buy MRTA When Buying A HOuse?

By: Jokal

Jokal — Sat, 29 May 2010 13:57:32 +0000

Hi KC,

I am going to purchase a 196K house. I got 2 letter offers already, one from HSBC (total financing RM 177K,BLR-1.9%, 24 year loan, exit period 5 year, exit penalty 3.5% from total loan amount,NZMC- i ask if they will include MRTA and legal fees in the loan package but they refuse). The other one is from CIMB (i ask them to include the MRTA and legal fees and they agree, so the total financing is RM 177K + 6.5K but rate is BLR-1.7%, exit period is just 3 year,exit penalty is 3.0% from total loan.

For HSBC i will pay RM 971 per month for 24 years but if I choose HSBC I will pay RM 1003 for 25 years (higher because HSBC’s rate is -1.9% while CIMB is -1.7% and legal fee and MRTA are included in CIMB loan package).

At first glance,HSBC does offer a better package because even if I pay the MRTA and legal fees using my own pocket money I can still save about RM 14500 throughout the whole 25 years.

However, I realise that by choosing HSBC I have to let go RM 6500 in one shot from my Amanah Saham savings which could guarantee me a return of at least 7.0% per annum. I calculate that by paying the MRTA and lawyer fee of RM 6500 upfront I will lose a total of RM 35000 from the amount that I can accumulate (initial investment of 6.5K + compounded interest of 7.0% per annum) during the 25 years.

Therefore instead of saving RM 14500 I am actually losing RM 20500 (RM 35000 minus RM 14500) if I choose HSBC because although the interest rate is lower I am losing out on the opportunity cost of not being able to invest the RM 6500 in the Amanah Saham because I have to pay the fees upfront.

Please I really need your thoughts and comment on this. Am I calculating it the right way or do I miss anything in my calculation? Hope for a prompt reply as the developer /bankers has already asked me to decide. This has been bugging me for quite a while. Thanks for your help

By: KCLau

KCLau — Tue, 12 Jan 2010 09:40:46 +0000

It all depends on the market value of the property. So, talk to the valuer.

By: Mrs

Mrs — Fri, 01 Jan 2010 16:40:42 +0000

Hi KCLau, I would like to ask if it is possible to loan more than the sales and purchase agreement (for house improvement expenses) depite of the bank’s lower indicative market value?

By: zaimatul sulfiza

zaimatul sulfiza — Tue, 30 Jun 2009 08:12:32 +0000

Hi,

I was approached by a friend from freemen (freemen.com.my) and said that I can save a lot of my homeloan interest. Its too good to be true. Is this thing real? I will save Rm115k of in interest savings and they will charge me RM2419 as a consultation fee.

By: spike

spike — Sat, 16 May 2009 03:19:49 +0000

i came across mortgage brokers 5 years ago through CNBC astro channel 518 every saturday n sunday. lots of tips on money matters, managing personal finances. many people do not know that in many countries lock in period by banks are illegal. on top of that you will find a very intersting clause in most home loan agreements a SUSPENCE ACCOUNT this is also illegal in many developed countries. what happens is this any additional money that is put in your loan goes into this account and it is kept there at the discreation of the bank, and it does not go against the principle. SHOCKING. ask around and you find many people are not aware of this, the lawyers say that is a standard agreement. ( this agreement benefits the bank, they are the banks appointed lawyer) they protect the banks interest more than the lenders interest.

Check out freemen.com.my, this guys have help me and my friend lots of money on our home loan. as much as RM120 K on a 250 K loan.

Regards.

Spike

By: Beware of the Lock-in Period of your Home Loan Offer Letter| Mortgage Malaysia

Mon, 16 Jul 2007 00:14:55 +0000

[...] before you sign it. If you find that there is too much details for you to look at them in depth, ask these important questions for thorough explanation before you sign the mortgage offer [...]

By: Cyberpartygal

Cyberpartygal — Thu, 28 Jun 2007 14:35:20 +0000

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