Documents Required:
1. You need to provide the following basic documents before the financial institution can process your loan application:
2. A copy of identity card or passport.
3. Latest 3 months' salary slip.
4. Latest income tax return form (Form J) or EA Form.
5. Sale and Purchase Agreement / deposit or booking receipt / letter of offer from the housing developer.
6. A copy of the land title (if any).
7. The latest bank statement (compulsory in the absence of salary slips and/or Form J/EA Form) dating six months / savings passbook / fixed deposit.
8. Valuation report for completed houses.
9. If you are self employed, you need to provide your business registration documents, latest 3 months bank statements, latest financial statements and other supporting documents to support your income.
Margin of Financing
The amount of financing provided by a financial institution depends on the market value (for completed properties only or purchase price of the house, whichever is lower. The margin of financing could go as high as 95% of the value of the house. It is assessed on factors such as:-
* Type of property
* Location of property
* Age of the borrower
* Income of the borrower
Loan Tenure
The length of a loan can range anytime up to 30 years or until the borrower reaches age 65 (or any other age as determined by the financial institution), whichever is earlier.
Common Packages Offered By Financial Institutions
* Term Loan
o A facility with regular predetermined monthly installments. Installment is fixed for period of time, say 30 years
o Installment payment consists of the loan amount plus the interest
• Overdraft Facility
• A facility with credit line granted based on predetermined limit
• No fixed monthly installments as the interest is calculated based on daily outstanding balance
• Allows flexibility to repay the loan anytime and freedom to re-use the money
• Interest charged is generally higher than the term loan
• Term Loan and Overdraft Combined
• A facility that combines Term Loan and Overdraft. For example, 70% as term loan and 30% as overdraft
• Regular loan installment on the term loan portion is required
• Flexibility on the repayment of overdraft portion
Fees and Charges
Below are some of the common fees and charges you would expect to incur:-
Type
Rate
Stamp Duties
Sale and Purchase Agreement 1% for the 1 st RM100,000.00
0.5% for the next RM4,900,000.00
Loan Agreement 0.5% of the loan amount or RM5
per RM1,000.00
Transfer of title 1% for the first RM100,000.00
(for completed properties only) 2% for the next RM400,000.00
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Disbursement Fees
Include fees for registration of charge, These fees vary by state, land office
land search and bankruptcy search and type of property. For instance, in
Selangor and Wilayah Persekutuan,
The fees could range from RM300 to RM700
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Processing Fees Rate Range (RM)
One time fee charged by the financial 50 up to 30,000
institution for loan processing 100 30,001 - 100,000
200 100,000 above
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Rights And Duties Of The Borrower And Financial Institution
Rights
• Borrower
• Right to have access to all information that would affect your borrowing decision
• Right to be treated professionally, courteously and without prejudice
• Right to be consulted on changes to the terms and conditions of your loan
• Right to have accurate information on a regular basis on your loan account
• Right to enforce legal action in the event of a breach of contract
• Financial Institution
• Right to have full relevant disclosure of information on borrower's credit standing
• Right to correct and truthful information on the borrower
• Right to timely repayment of interest/installment of the loan
• Right to enforce legal action in the event of default/breach of contract
Duties
• Borrower
+ Duty to read and understand all terms and conditions of the loan
+ Duty to observe the terms and conditions of the loan at all times
+ Duty to enquire and get clarification on all aspects of the loan to their satisfaction
+ Duty to make prompt payment on the fees, charges, interest and installment of the loan
+ Right to enforce legal action in the event of a breach of contract
• Financial Institution
+ Duty to discharge borrower's obligations as described in the loan agreement
+ Duty to consult borrowers on any changes made to the terms and conditions, fees charged and other relevant information
+ Duty to attend to all queries made by borrowe
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