Debt Consolidation For Malaysian (Part 2)

Now I shall try to explain how this works..

First and foremost, caveat emptor...

1st Criteria:
This is not meant for those of you who are in the following category:

1. Having FINANCIAL TROUBLE
2. Poor payment track record in your CCRIS
3. Declared Bankrupt
4. Need QUICK MONEY (like tomorrow!)
5. Poor CTOS record...like facing litigation, acting as guarantor for defaulted loans, etc
6. Excessive amount of credit card debt! example, total credit card debt more than 3 times your gross income (unless you can proof that you settle monthly outstanding in full every month consistently, then may be got chance)
7. You are RETIRED with no income
8. You are NOT A MALAYSIAN (Sorry, priority is to serve our fellow Malaysian first!)
9. High Debt Service Ratio (You can ask me to calculate for you if you are not sure though...)
10. You want the cheapest rates in town! (Sorry, i cannot offer you the lowest rates but i can assure you the rate is still fairly competitive at housing loan rates. That is a small price to pay for able to consolidate your debts and/or get the next property you desire)

If you are one of the above, you can stop reading now. 

2nd Criteria:

Among your properties, do you have at least one property whereby you can extract plenty of equity from it? I shall explain what this means..

eg., 

Assuming Outstanding loan amount = RM500k

Property Estimated Market Value is say RM1.5 million!

Net equity is therefore RM1million (1.5m minus 500k)

Apply 80% refinancing margin of financing (assuming you qualify) on the net equity RM1million = RM800k, and use that amount to settle your other debts such as other housing loan at the same time and other debts such as credit card.. 

Just to clarify, we shall settle the other housing loan directly for you. So even if you have more than 2 housing loan, NO ISSUE whatsoever! You can bypass the 70% LTV (Loan-to-Value) rule, for those who understands what i mean. This is provided the excess equity or refinancing cash-out portion is enough to settle these loan.  However, we cannot do the auto-settlement for credit card. You will need to do it yourself (DIY). 

3rd Criteria
The minimum refinancing loan amount must be RM500k and above.

Get the picture? This technique is what term as Debt Consolidation. 

What Benefits do you get?

• Much cleaner debt record post consolidation (like a cleaner Balance Sheet). The banks will now like you MORE as your CCRIS will now look like a beauty pageant!
• If you are left with only one housing loan (post consolidation), you can now purchase another residential property at 90% margin of financing!
• Reduce your interest costs significantly, especially if you have much credit card debt or personal loan, or old and small housing loan with unfavourable rates!
• ZERO Moving Cost! Yes, we are now having a Special Promotion limited time Offer. For a million dollar loan, this could save you easily RM20k!

To find out more, email me with your personal and debt profile at mortgagebroker.my@gmail.com. Remember, READ the 1st, 2nd & 3rd Criteria first to see if you qualify.

Cheers!

Debt Consolidation For Malaysian (Part 1)

Are you suffering from one or any of the following:

1. Stuck with too many or multiple bank loans, credit card debt and/or personal loan?
2. Cannot secure high margin of financing (80% or 90%) from banks for your next property purchase, particularly residential property, due to holding 2 or more housing loan?
3. Facing bank loan rejections from banks due to high credit card debt? 
4. Cannot refinance your existing housing loan due to high commitment as a result of banks' strict lending guideline in adopting 10-year tenure?
5. Paying high interests for your current debt commitment?

If you are suffering from one or any of the above, you are certainly not alone. Many Malaysians have in fact fallen into the same trap as at now. After all, Malaysia is being "boosted" with one of the highest loan to GDP ratio in Asia, and that is why Bank Negara had to take stern actions to curb the over zealousness of property purchase!

Just to clarify...credit card debt encompasses everything from quick/advance cash facility, Balance Transfer and installment pay plan. Yes, while you may be attracted by various merchants to buy your dream sofa or latest mobile phone or most advance TV using the zero interest installment pay plan, they are not totally FREE as they come with a hidden cost! These things will appear in your CCRIS as debt, regardless of whether you settle fully or partially every month!

Until recently, refinancing was the theme for many property investors as they could easily extract their excess equity from their existing properties to finance their next purchase but this is no longer easy today. This is because banks have imposed strict assessment guideline for refinancing, using only 10-year loan tenure, and as a result, many would have been disqualified.

WHAT IF I TELL YOU I HAVE AN IDEAL SOLUTION FOR YOU?

That is, for example...
NO MORE 10-year loan tenure assessment guideline

YOU CAN STILL BORROW AS MUCH AS 80% MARGIN OF FINANCING, EVEN IF YOU HAVE MORE THAN 2 HOUSING LOAN

Sounds too good to be true?

Well, it is only true if you know how to do it.

The key phrase here is called "DEBT CONSOLIDATION".

In your mind, you must be thinking it must be some kind of Personal Loan initiative to do Debt Consolidation....After all, I have googled around and the end result seems to focus only on using personal loan as the means. To me, using Personal Loan is only a short term measure, and only effective in covering small amount or short term loan, and comes with a high cost (interests) too.

NO, IT IS NOT PERSONAL LOAN.

OUR SOLUTION IS HOME LOAN. Yes, you hear it right! The one that everyone loves!

More detail in my next post...

Malaysia Bank Mortgage Update

Dear Readers,

Many changes had taken place over the last one year, ranging from the introduction of Base Rate in place of the Base Lending Rate (BLR) to the introduction of more restrictive lending guidelines and polices such as reduced margin of financing, restrictive loan tenure (for refinancing), etc. For Malaysian working in Singapore and Singaporeans who used to be happily buying up properties in Malaysia, even they are affected as they now have to compulsorily submit their Credit Bureau Singapore (CBS) Report for bank loan applications. (Just to clarify, CBS is similar to our CCRIS report)

So now you have it, the new loan rates are typically structured in "Base Rate+Spread"=Interest Rates. E.g., 3.99+0.56%... Each component differs for all banks. Base Rate (BR) essentially is determined by the banks' benchmark cost of funds and the Statutory Reserve Requirement (SRR). Whereas Spread reflects borrower credit risk, liquidity risk premium, operating costs and profit margin. In the normal circumstances, banks will revise the Base Rate from time to time to reflect changes in their cost of funds.

For Borrowers who secured their loan prior to 2015, do you need to be worried with the above? Not at all. This is because whatever secured last time remains the same or status quo. However, should you go for refinancing, the new regime shall prevail.

Below is the latest Base Rate for various Financial Institutions as per April 2016 (Source: BNM):

From the Table, you could see that Maybank is having the lowest Base Rate. Do you then just jump in to apply for their loans? Answer is NO. Their effective rate is still similar to other banks because their spread is set high! So is just an illusion!

Back to the bottom line, each and every bank has a different way to assess the loan applications. Your chances of securing loan approval will still depend very much on your credit profile and whether it can match with bank's requirement.

All the best in 2016 for your property journey!

Latest Loan Promotion

Dear all readers,

Just to post a quick update that we can now offer housing loan rates up to BLR-2.5% and commercial rates up to BLR-2.35%! Terms & conditions apply.

If interested please email us at mortgagebroker.my@gmail.com. Please provide us the particulars of your purchase and your contact detail in your email for quicker processing.

Thank you.

Regards
PS Thoo

Mastering The Power of Persuasion

FREE 2-DAY MASTERING THE POWER OF PERSUASION WORKSHOP

Heard of Joel Bauer? Frankly I have not, but curious. Reason is because i found out he is supposed to be one of America's Top Celebrity Persuasion Guru…and his clients include many common household names such as Mark Victor Hansen, Alex Mandossian, Armand Morin, John Childers  and Robert Allen.

Well, Joel is coming to town (KL) and giving away a 2-day training absolutely for "FREE"! Well, it's literally for FREE unless you want to pay for his other courses, that is what I have been promised.

According to the host of the event, Wealth Mentors, during his 2-day training, you will learn his 30-year blueprint on how you can persuade people who don't want to be persuaded.

What Can You Learn?

• The Amazing Power To Separate People From Their Money – Every Time! 
• The Magnetic Charisma To Draw Attention And Win Trust! 
• The Step-by-Step Formula To Influence And Persuade… One-on-One and One-on-Many  
• The Ability To Preserve Business & Personal Relationships For Life!

It appears that Joel was also featured in Wired Magazine, Wall Street Journal, The Business Times and has appeared on ABC, NBC, CBS, MTV, CNN and Channel NewsAsia TV..quite a handful!

Well, I'm planning to be there to see how good he is (if I manage to cancel my flight to Bangkok due to personal reason), so hope to see you there. If you are interested, you may register for the event here and get a free ticket to Joel Bauer's Mastering The Power of Persuasion Workshop while stocks last.
See you there.

PASSION2PROFIT - MASTERING THE POWER OF PERSUASION
13th & 14th May 2013, BERJAYA TIMES SQUARE

New Interest Rate Framework Effective 2Jan 2015

According to Bank Negara, effective 2 Jan 2015, the base rate will replace the BLR (Base Lending Rate) framework as the main reference rate for new retail floating rate loans. The base rate will be determined by the financial institutions’ benchmark cost of funds and the statutory reserve requirement, which currently stands at 4%. Other components of loan pricing, such as credit risk, liquidity risk premium and operating costs, will be reflected in a spread above the Base Rate.  The reasons for the shift to the new framework are: i) to address the issue of negative spreads between retail lending rates on new loans and BLR; ii) improve the transmission mechanism of monetary policy; and iii) to promote a more transparent pricing of floating rate retail loans. 

Also noted with interest is that Malaysia household debt ratio to GDP had risen to 86.8% in 2013 (vs 2012’s 81.3% and 2011's 76.2%). However, growth had slowed from 13.5% in 2012 to 11.7% in 2013. BNM expects house prices to remain elevated and will continue to be largely driven by the structural mismatch between supply and demand.  

(Source: 2013 BNM Annual Report) 

Interest Rate Sets To Rise, and Is Not Just BLR

Barring any unforeseen circumstances, the good old days of low interest rates is over soon. Therefore, be prepared to tighten your seatbelt for your secured property loans.

As we all know, US QE tapering has already begun and is a matter of time the Federal Reserve will start raising their interest rates. We have already witnessed a number of Asian countries started to raise their interest rates too, in order to prevent significant capital outflows. Will Malaysia be any different?

The answer is quite a certainty, NO. Foreign liquidity is like a sum of all parts, someone will gain at the expense of others, and vice-versa.

At the banking side, we are already seeing banks gradually revising their interest rates upwards, by reducing the spreads. That means to say, loan packages such as BLR-2.4 or BLR-2.5% may just be a thing of the past. And we are not even talking about BLR yet (currently at 6.6%), which is directly influenced by Bank Negara's OPR (Overnight Policy Rate). Few months back, Bank Negara already presented a working paper on revamping the BLR framework, with the intention to protect the risks of Malaysia's lending financial system. Obviously, Bank Negara is concerned that with the potential real estate property cycle reaching its peak, our banks might have undertaken too much risk by undercutting their margins (vs the cost of funds).

Should say BLR increased by 50 basis point, and spread reduced to 2%, the effective interest rate will become 5.1%. That translates to about 11% increase in monthly installment for a loan size of RM500k with 30 years loan tenure!

For the more conservative, time to look at fixed rate loan perhaps?