Start now to work towards securing your first home loan in Malaysia!
There’s more to buying a new home than just scraping together money for down payment and finding a good provider for a home loan in Malaysia. The first step is to find a property (after extensive research) that suits your budget without compromising on your requirements.
Then comes years of financial planning to boost your savings which can fund a considerable down payment and minimise your loan dependency. All this might appear daunting, especially for first-time home buyers, but believe us, things get sorted once you’re in the groove!
You need to be smart and thorough with planning at every stage before you finally sign up for a particular home loan plan. And we’re here to help you through this journey.
In Malaysia, you can choose between two kinds of home loan products – conventional home loans and Islamic home financing.
If you ever miss a payment, you stand the risk of being charged with compounded interest that may be capitalised and subjected to additional interest.
Once this period of the lease expires, you become the sole owner of the property as long as you’ve made all the payments in time.
It’s important that you choose the right kind of home loan – conventional or Islamic – based on your unique needs.
Taking a home loan can be the biggest financial decision of your life. So failing to plan ahead can lead to financial doom, especially if you can’t afford it. Keep in mind to plan your finances thoroughly before you decide to take up the sizeable burden of a home loan. As such, getting complete clarity on how much loan amount you can afford is a must. Here are two tips:
Usually, DSR is maximum 70% of your net monthly income (it’s at times lower for lower income groups and higher for upper income groups). So keep in mind that all your existing debts (including your new home loan premiums) should not exceed 70% of your net monthly income.
Majority of home loan packages in Malaysia fall under three main categories – term loans, semi-flexible loans, and fully flexible loans.
Consider the pros and cons of each of these and then choose a plan that best suits your requirements.
Bank Negara Malaysia constantly introduces updates and reforms in the field of mortgage financing. From a cap on financing in case of multiple properties to a limit on the amount you can borrow, there’s a number of home loan policy changes and announcements that you need to keep a track of before you commit to buying a new home.
Also, keep an eye on BNM announcements regarding changes in Overnight Policy Rates(OPR) that may have a bearing on home loan interest rates. OPR changes are included in BNM’s Monetary Policy Statement (MPS) that is released after every Monetary Policy Committee (MPC) Meeting.
You might be aware that your credit score makes a huge impact in determining what kind of home loan packages banks will offer you. So start working towards improving it right now, even if you plan to go for a home loan after 2 or 3 years.
Steps like clearing outstanding debts on your personal loan, car loan and credit card, never missing any payment deadline and avoiding fresh personal loan or credit card applications without repaying existing dues are some suggestions.
There are a few things you can do in order to bag a loan at an interest rate that best suits your requirements. Here are a few tips:
Buying insurance on top of your home loan costs can just seem like a needless addition. However, MRTA can be extremely useful, especially when you don’t have life insurance coverage.
With MRTA, your mortgage payments are completely covered in case of your death or if an accident leaves you permanently disabled. MRTA can also serve as extra protection for you and your family if you have life insurance.
Written by BBazaar Malaysia.
BBazaar.my is a leading online marketplace in Malaysia that helps consumers compare and apply for a credit card, personal loan, home loan, car loan and insurance.
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