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!

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!

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?

New Fixed Rate Home Loan

New and best Fixed Rate Home Loan in town!

1st 2 years: 4.25% only
Thereafter: 4.99% Fixed For Life
OR
Whole Tenure: 4.85% fixed for life

No lock-in period except for refinancing.

PEACE OF MIND ON YOUR LOAN INSTALLMENT regardless of what happens to interest rate.

With US Federal Reserve pulling a stop on QE (Quantitative Easing), likelihood interest rates will rise soon. Same applies to Malaysia. PROTECT YOURSELF NOW!

Interested please email me at mortgagebroker.my@gmail.com

Latest Commercial Loan Offer

Special Commercial loan package, currently best in the market, Limited time offer.  Terms and conditions apply,

Loan amount
Between RM300k to 499k (BLR-2.25%)
Between RM500k to 999k (BLR-2.3%)
At or above RM1m (BLR-2.35%)

Max margin up to 85%
3 Year lock-in period
maximum tenure 25 years or age 70, whichever comes first.
Applies to both new purchase and refinancing.

Commercial Property type:
Shop house and shop office only

If interested, contact me at mortgagebroker.my@gmail.com or call.

Latest New Measures by Bank Negara to Reduce Household Debt

Recently there was much speculation about Bank Negara considering to ban DIBS or Developer Interest Bearing Scheme from new property launches. DIBS is essentially a scheme from property developer whereby upon booking any of their properties, the buyer need not service the interests on progressive loan disbursed from the bank during the construction period of the property up to completion.  The developer will instead service the interests. This gives buyer a sense of "feel good" factor as the buyer need not fork out any more money besides the initial downpayment until property is completed.

So as we were expecting BNM to do something about DIBS, it didn't happen, or shall i say, hasn't happened. Instead, BNM introduced other new measures late last Friday and the effect was immediate.

The new measures are as follows:

1. revise maximum tenure for any property loan (residential and non-residential) to maximum 35 years only. (down from previous 40 to 45 years for residential loan)
2. limit maximum tenure for personal loan to 10 means (previous could be as high as 25 years)
3. no more pre-approved credit card personal loan. That means, the banks and credit card agencies can no longer offer anyone a pre-approved credit card or personal loan over the phone from now on as they normally did previously, something which i personally find very annoying, as the message often delivered by these agencies were a false sense of easy money and "low" interest rates when in fact very often it wasn't.  

The staggering statistics is that our latest household debt to GDP has ballooned to 83%, apparently the highest in Asia! The main culprit appears to be the extraordinary growth of personal loan, and to a lesser degree, property loans. 

Previously, a number of Malaysia's non-bank lending corporations such as MBSB and Bank Rakyat were able to perform the role of lending without coming under the purview of Bank Negara, and a number of these non-bank entities have achieved exponential growth for the past few years due to the expansion of personal loan, mainly to the civil servants, through direct deduction of the monthly installment from their payroll. The past practice of self-governance is no more as under the new Financial Services Act (FSA) introduced recently in place of BAFIA, these entities are now under the purview of Bank Negara, and Bank Negara has the right to audit their books as and when deems fit. 

As a whole, i believe the new measures are steps aimed at the right direction. From the property perspective, the reduction of tenure will most likely impact the younger generation (<35years old), but will not be significant, as the impact on loan installment between 35 years and 40 years tenure assuming a housing loan amount of RM500k is only about 5% increase in installment. 

Personally, I am expecting more cooling measures to come as the above are likely only the beginning. We shall wait and see. 

Financing For Vacant Bungalow Land

Are you buying a piece of bungalow land and looking for the best financing?

Normally, the highest margin of financing is between 60% to 70% for land, and most banks only go for land at prime location only.

If you want better financing, you should include construction over it. If you include both land and construction, your margin of financing can be up to between 80% to 90%! That's quite a drastic difference.

Take note that most come with condition that you need to complete building within 2 to 3 years.

Interested? Email me.

Fix your loan interest rate for LIFE!

Are you concerned about rising interest rates and therefore risk of not able to repay your monthly installment? Why not lock in your loan interest rates at fixed rate for life?

Currently the best offer is 4.80% fixed. Take advantage of this historical low rate now. Free yourself from further surprises and stabilize your cash flow.

Special Ultra Low Rate Loan Package

Good news! I can offer you the following limited time only special home loan offer at ultra-low interest rate at BLR-2.45%, with only 3 year lock-in.

1st 3 Years: Fixed at 4.38%;

Thereafter: BLR-2.45%

Minimum loan amount only RM300k!

If interested, please email me at mortgagebroker.my@gmail.com.

The bad news is the offer expires 12th April 2012. So hurry as response is overwhelming!

Terms and conditions apply.

Bank Mortgage FAQ

This is a common question I'm being asked...As a Mortgage Broker, can we offer the best package in town?

The answer is certainly YES! As far as the banks are concerned, we are also helping them to secure more deals, with minimal costs, so you can be assured that you can get the best deal, provided you meet the bank's criteria as always.

As at now, the best mortgage lending rate we can offer is up to BLR-2.5%. Terms and conditions apply.