Ming Joe asked 8 years ago
Hi KC, would just like to ask for your opinion. Currently theres a property that i am considering to buy. And based on my profile i can only get a 90% loan. The house value is rm320k and my monthly salary is around 4.7k. after epf deduction and all commitments i should have around rm2k left. The condo is located in sentul, pretty near to the main city. If i were to buy the house, i would need to take another personal loan and theres an offer at 4.88% for up to 5 years. What is your view on this?
Thanks!
KCLau Staff answered 8 years ago
It is good to own your first property.
The problem I am afraid of is “cash flow”
Can you consistently save about RM1300/month before you buy the house? If yes, then you shouldn’t have problem paying the installment. I assume that you can save RM2k/month as mention above.
If you can save, why couldn’t you come up with the 10% = RM32k down payment with your own money? It just take 18 months of saving to come up with that figure. You will also need another 5% for transaction cost. But that is not an issue when you are buying direcly from developer.
The personal loan 4.88% is a flat rate, which means compared to the effective rate of mortgage, the 4.88% is about double. It will be over 10% interest rate. It is not a recommended loan because it cost double compared to mortgage.
Can you get fund from somewhere else? Like EPF account 2, or insurance cash value, or borrowing from relative?
Ming Joe
replied 8 years ago Ive only been in work 2 years plus, and I have around 20k in savings. I couldn’t save up much during the start because im working outstation, so i had to buy things, rent and settle down. My epf 2 account is arnd rm9k. Oh btw, the house completes in 2022, so i dont have to pay the monthly installment till then, just the interests generated as the house is built. I’ll try relatives then. How about if theres a lower interest rate loan of around 3.4%? Is it still not so recommended?
Thanks
KCLau Staff answered 8 years ago
How much loan do you need apart from the 90% mortgage?
In terms of amount
Ming Joe
replied 8 years ago 31750 to be exact
KCLau 
Now you have RM20k, and EPF Account 2 RM9k.
So total you already have RM29k.
Just need RM2750 more.
You don’t need a loan. When you pay for the house booking fee, it will take a while to sign the S&P agreement. Only then you need to pay the balance. You can drag for a month.
Ming Joe
replied 8 years ago But kc, if i use up 20k, my bank balance would be 0 lol. And if theres any rainy day, i wont have funds. Would u suggest i keep some?
Use your credit card as rainy day funds.. and your salary will come in.
It just take a few months to build up you cash savings.
Worst case, when you really need the extra cash, then only take the personal loan, on the amount you really need.
Ming Joe
replied 8 years ago I see. Alright kc, will take ur advice. Thank you very muchh