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...

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. 

Usage of Credit Card Affects You

Most people (including me) like using credit card because one can pay later (upon payment due) and you get to collect reward points for gift redemption later. As long as one makes payment promptly before the due date, no issue whatsoever.

However, it's a different story now! Be very careful with your credit card spending, as it will affect your credit eligibility when applying for a loan! All spending is now linked real-time (or almost real-time) to CCRIS and they will appear as OUTSTANDING in your CCRIS report even though the amount is not due for payment yet! Most banks have implemented this already. In the past only late (overdue) payment appeared as outstanding.

In other words, as and when you buy anything with your credit card, it will appear as amount outstanding in your credit report and will therefore become part of your commitment as well.

Personally i don't think this is fair but Bank Negara obviously think otherwise, in order to clamp down on credit card debts.