Refinancing without being on the loan

Posted on 11:33 AM | By Smart Wealth Advisory | In

If you and a spouse or family member are currently living together, but only one person is on the current mortgage it’s best to make the mortgage payments from a joint checking or savings account each month. This way, in the event that you need to refinance in the future and must use just the person who currently isn’t on the loan, you can do so without much hassle.

Banks and mortgage lenders often want verification that whoever is taking over the current loan has been making the mortgage payments for the prior 12 months. This also alleviates the need for title seasoning, so a borrower taking over the mortgage can simply be quit-claimed onto title at the last minute as well.

This issue often comes up when the primary borrower has a poor credit score and elects to use another person, often a spouse to refinance the loan to obtain more favorable financing terms. It can amount to big savings if the current titleholder/mortgagee has a low credit score and the spouse has a great score.

Refinancing a listed home

Posted on 11:32 AM | By Smart Wealth Advisory | In

If your home is currently listed, or was previously listed in the last six months you may experience trouble refinancing your mortgage. Many banks and lenders shy away from offering financing to borrowers who were unable to sell their home on the open market. It really makes perfect sense. Why would a bank or lender want to finance your home at a certain value if no one is willing to buy it at that price in the real world?

Before you list your home, plan for the worst. Make sure you have enough cash reserves to pay your mortgage each month in the case that your home doesn’t sell. After all, you may be stuck with an unsold home and an adjustable-rate mortgage that’s due to rise.

If you do hit dire straits, there’s likely a lender out there willing to refinance your current loan, but it will likely be at a premium. If you must refinance, ask your bank, lender, or broker to grant an exception to get the deal done.

Use a Combo Loan To Save Money

Posted on 11:28 AM | By Smart Wealth Advisory | In

If you’re thinking about purchasing a home or refinancing, think about breaking the total loan amount into two. If you do two loans, you’ll secure a lower interest rate on your first loan, and often avoid certain adjustments that would come with a single loan.

You can avoid paying mortgage insurance, and if doing a refinance, you can do a rate and term refinance on the first loan, and a cash-out refinance on the second loan.

If you do two loans, often times you can get a larger amount of total financing as well. Instead of being capped at 90% on one loan, you may be able to break up the loan into an 80/20 and get a full 100% from your bank or lender.

That’s just a taste of the many creative financing options available if you break your loan up into two. While you will pay slightly more upfront for fees on the 2nd loan, the flexibility and possible interest-rate savings may make it the right choice.

Occupancy Fraud

Posted on 11:27 AM | By Smart Wealth Advisory | In

If you’re a real estate investor, or simply own more than one property, it’s imperative that your bank statements are mailed to your primary residence each month. If you claim one house to be your owner-occupied property, but your bank statements and other financial materials are currently going to another one of your properties, the underwriter will surely question the occupancy, and your mortgage application will likely be declined.

In the eyes of the bank and the investor, it doesn’t make sense for a borrower to send bank statements, cable bills, and other financial statements to a property they don’t occupy for the sheer reason it wouldn’t make sense if you didn’t live there.

This is actually a huge red flag investors look out for to avoid buying securities that are tangled up in occupancy fraud. And for this reason, banks and lenders will likely decline a file if it’s listed as owner-occupied, or counter the borrower to submit the loan as an investment property.

Many borrowers submit a loan application listing one property as their primary residence, and when conditioned to provide verification of assets, they use bank statements from another property and the file gets declined for occupancy fraud.

Season Assets Two Months Before Applying for a Mortgage

Posted on 11:09 AM | By Smart Wealth Advisory | In

Most mortgage programs offered with the majority of banks and lenders out there ask that you verify liquid reserves for “x” amount of months to prove that you have the available funds to make future mortgage payments.

However, many potential homeowners and homeowners alike apply for mortgages without seasoning their assets, and often run into problems when applying for a loan.

While you may not have the necessary verifiable assets, there are a number of ways around the problem. You can borrow money from a family member or a friend, and put it in your bank account two months before you apply for a loan. Or if you have cash lying around, get it in your bank account as soon as possible. This way the assets will be seasoned by the time the lender requests asset verification.

Though the assets may have come from a family member, friend, or any other unknown source, the money will be considered seasoned after two months, and thus won’t need sourcing. The issuing bank or lender will simply ask for a “VOD” (verification of deposit) which won’t show the source, just the average two-month balance of your account. The higher that number, the stronger you’ll look, and your odds of getting approved for financing will rise.

If you verify your assets, you’ll also save money by qualifying at a lower interest rate while increasing the amount a lender is willing to finance. It’s a must for anyone applying for a loan, and foolish to rush into a loan until you’ve got your assets in order. This goes hand-in-hand with credit organization.

Some audacious brokers even furnish borrowers accounts with assets as a way of solving these problems, although it’s a bit of a “black-hat” technique which is probably best avoided.

Remember that most lenders request two months PITI (Principal Interest Taxes Insurance) for owner-occupied programs, four months PITI for second homes, and six months PITI for investment properties.

Never rush into a loan until you’ve got everything in order. You’ll kick yourself for not making small adjustments that could save you hundreds to even thousands a month on your mortgage payment.

Why is 100% Financing So Hard To Find?

Posted on 11:07 AM | By Smart Wealth Advisory | In

A little less than six months ago you could finance a home with no money down with few problems. Even if you had marginal credit, no assets, and a relatively soft employment history.

These days you’ll spend a lot of time shopping for 100% financing even if your the most well-qualified borrower out there. You may even fail to find one bank or lender willing to offer you financing without a down payment.

The reason is because many of the banks and mortgage lenders offering 100% financing were losing money when homeowner after homeowner failed to make the first payment, leaving the bank with the keys and a vacant property.

This scenario seemed to be so common that many banks and lenders offering 100% financing closed down, or simply withdrew the program to avoid shutting their doors.

It seems many homeowners were willing to buy properties with zero down in the hopes of turning a quick profit, but as home prices slid, borrowers simply walked away with little more than a credit ding.

Of course, 100% financing will come back, this time with higher interest rates and mortgage insurance that protects banks and lenders in the case of a default or foreclosure.

While it may not be as easy to qualify as its predecessor, it should stick around a bit longer with protections in place for the banks and lenders offering it.

Don't Mix Marriage With Mortgage

Posted on 11:02 AM | By Smart Wealth Advisory | In

So you’re planning on getting married next year, and you just need to find a perfect house before that magical day. There’s no possible way you could continue to live in an apartment or simply rent once you’re married!

Why do newlyweds have this mentality? Is it the seriousness of marriage, or the need for a solid foundation to begin raising a family? Either way, one shouldn’t buy a home simply because of a recent or looming marriage.

You should buy a home when you have found the right property and are financially able to go through with the purchase.

These days new couples rushing into home purchases because they’re engaged or newly married. This seems like a huge layer of stress to pile on top of an already stressful period. Buying a home is a huge commitment, and could lead to arguing and fighting, which is no way to start a marriage.

A wise couple should organize their finances, check and fix their credit, and do a lot of debt-to-income and valuation homework before buying a home. It doesn’t make sense to rush into the purchase of a new home simply because your status changed.

You certainly shouldn’t start your marriage off with a rash decision just because it’s the “normal” way of doing things, or because other couples or family members pressure you to buy a home.

Take your time and do it right.

5 Reasons to Check Your Report Regularly

Posted on 3:14 PM | By Smart Wealth Advisory | In

1: Check for Errors and Inaccuracies

About 1-in-4 credit reports contain errors that can affect a credit decision. These errors may include human input error, incorrect information reported about your account, or addition of some other account information that has a similar name to yours.

You should check you report at least annually and prior to submitting a home mortgage or other application.


2: Tracking Payments

The typical household will during one month make 1 mortgage payment, 4-5 credit card payments, 1-2 student loan payments, 1-2 auto loan payments, 4-5 utility payments, and the list goes on.

Multiply this number of payments by 12 and you can imagine the probability that 1 or more payments were recorded incorrectly by your creditor.

You should check your credit report to make sure that your payments has been properly recorded.


3: Identity Theft

This is probably the main reason why you should check your report regularly. Identity theft occurs when someone assumes your name and social security number to open credit accounts, divert card statements to another address, and drive up debts.

Identity theft can destroy your credit and trap you into a complicated process to clear your good name and background.

Checking your credit report regularly can help prevent identity theft. It shows credit activity being made in your name. You can monitor over time whether a particular inquiry or credit account was open without your authorization.


4: Inquiries

Every time you make a request for credit or enter into some contractual service, your lender or service provider may check your credit, which places an inquiry on your credit report. Multiple inquiries over a short period of time can lower your credit rating.

Your credit report will show the inquiries made to your report. It is important to know who has made an inquiry, whether such inquiry was authorized by you, and most importantly, whether any of the inquiries are related to Identity Theft.


5: Credit Fraud — Unauthorized Charges

A credit report will show the credit accounts that are still open but with limited or zero activity.

Question: if someone confiscated your credit account, how would you note any activity to the account if the creditor has on their records your previous address? Reviewing your credit report allows you to catch new activity on accounts that may be fraudulent.

What's Inside Your Credit Report

Posted on 2:59 PM | By Smart Wealth Advisory | In

Your credit report will maintain the following information:

* Your current outstanding debt
* Places and the number of times you have applied for credit
* The kind of credit you have taken out in the past
* Late payments in 30, 60, and 90 day increments
* Over extension of your credit lines
* Liens
* Garnishments
* Bankruptcy

Credit bureaus report negative information for seven years and bankruptcy information for ten.

Who Has Access?

By signed authorization through an application or other contractual agreement, the following parties may gain access to your report:

* Banks, credit unions, finance companies, other lenders
* Retailers, department stores, credit card companies.
* Landlords, utility companies, phone companies.
* Hospitals, doctors, dentists, insurance companies.
* Car dealers, mortgagers.
* Investigators, lawyers, courts.
* Any party who can offer just cause and/or has access as a member of a credit reporting agency.

Why Check Your Report?

* To avoid paying higher interest rates
on your car and home mortgage if your credit report shows some questionable activity.

Did you also know that you may be charged higher premiums on insurance if you have questionable credit?

And you also might be surprised that many employers run credit checks on potential job applicants and/or for promotions.

Your goal is to ensure that your credit report reflects accurately your credit and financial management skills.

What Happens to My Mortgage If My Bank Fails?

Posted on 2:51 PM | By Smart Wealth Advisory | In

With banks failing at a pretty steady clip (at least one every Friday since June), you may be wondering what would happen if your bank failed.

For some, they already know what happens, especially if they had uninsured deposits and scrambled down to their local branch for an old-timey bank run.

But what about the mortgage, couldn’t that just disappear too, like your hard-earned savings? And I mean disappear in a good way…

Unfortunately, no. If the bank or mortgage lender holding your mortgage fails, not much will change.

The full balance won’t become due immediately. You won’t get a free house, you won’t be foreclosed on, and the mortgage rate won’t drop to zero.

In fact, you may be surprised to find out that the originating bank or lender (the one that took your loan application) doesn’t even hold your mortgage anymore.

That’s right; it could have been sold off to another loan servicer years ago who has been collecting payments from you ever since, in which case nothing would change.

But if the originating bank still held your mortgage at the time of failure, you would receive documentation from the new owner with instructions on how to manage it going forward, and likely an accompanying grace period.

The end result would be sending that monthly payment to a new address and having to setup your payment details with the new bank.

I know, it’s not that exciting; but if your bank does fail, be sure to keep a very close eye on your payments and watch out for scammers looking to take advantage.

Ensure that the new owner of the mortgage is indeed the owner, and not a scam artist.

The Credit Report

Posted on 2:19 PM | By Smart Wealth Advisory | In

The information in your credit report has a huge impact on whether or not you qualify for a mortgage loan and what interest rate a lender will offer. Therefore, it’s important your credit report reflects a positive image of the way you manage your money. If you're getting ready to buy a home, checking your credit report is the best way to ensure you get the loan and interest rate you deserve.

You can obtain your credit report from
The Credit Bureau.

Established in 1982 and managed by Bank Negara Malaysia, the Credit Bureau collects credit information on borrowers from financial institutions and furnishes the credit information collected back to these institutions. The information contained in the credit bureau helps financial institutions make informed lending decisions in a more timely manner.

The Credit Bureau will keep factual information about your:

- Personal particulars such as name, identity card number and address

- Credit account details such as type of credit facilities, credit limit, outstanding balance, conduct of account and status of legal action, if any.

Credit information is kept in the Central Credit Reference information System (CCRIS) which is a computerised database system that processes and collates the information into credit reports which can be made available to the public upon request.

About the Credit Report

The Credit Report incorporates the following credit information of a borrower:

Outstanding Credit (s)

All outstanding credit facility obtained by the borrower, either under -

(a) his own name;

(b) a joint name with another person;

(c) a name of a sole proprietorship; or

(d) a partnership or a professional body.

Such outstanding credit facility would exclude any accounts which have been fully settled.

Special Attention Account (s)

All outstanding credit facility under close supervision by financial institutions.

Application(s) for Credit

All applications approved in the previous 12 months for the borrower, either under


(a) his own name;

(b) a joint name with another person;

(c) a name of a sole proprietorship; or

(d) a partnership or a professional body.

The applications would not include any application that have been rejected, deleted or canceled.


How to obtain a credit report?

1. If you reside in Klang Valley:
Obtain your credit report in person from Laman Informasi Nasihat dan Khidmat (LINK) of Bank Negara Malaysia at the following address:
BNM LINK
Ground Floor, Block D,Bank Negara Malaysia,
Jalan Dato' Onn,50480 Kuala Lumpur.
Supporting documents needed include your driving licence or utility bills.

2. If you reside in areas outside Klang Valley:
Submit a Credit Report Request Form and a Loan Declaration Form available from:
i.Credit bureau's website
ii.Bank Negara Malaysia branches nationwide

Submit completed forms with these supporting documents by post/fax/email to:
BNM TELELINK
Corporate Communications Department,
Bank Negara Malaysia,
P.0.Box 10922,
50929 Kuala Lumpur.

Faks: 03-2174 1515
Emel: bnmtelelink@bnm.gov.my
Should you find any inaccurate information about your loans in the credit report, you should refer to the BNM TELELINK for a review immediately.

Why You Should Get An Inspection

Posted on 12:50 PM | By Smart Wealth Advisory | In

Whether you are buying or selling a home, you should have a professional home inspection performed.

A home inspection will look at the systems that make up the building such as:

  • Structural elements, foundation, framing etc
  • Plumbing systems
  • Roofing
  • Electrical systems
  • Cosmetic condition, paint, siding etc

If you are buying a home, you need to know exactly what you are getting. A home inspection, performed by a professional home inspector, will reveal any hidden problems with the home so that they may be addressed BEFORE the deal is closed. You should require an inspection at the time you make a formal offer. Make sure the contract has an inspection contingency. Then, hire your own inspector and pay close attention to the inspection report. If you aren't comfortable with what he finds, you should kill the deal.

Likewise, if you are selling a home, you want to know about such potential hidden problems before your house goes on the market. Almost all contracts include the condition that the contract is contingent upon completion of a satisfactory inspection. And most buyer's are going to insist that the inspection be a professional home inspection, usually by an inspector they hire. If the buyer's inspector finds a problem, it can cause the buyer to get cold feet and the deal can often fall through. At best, surprise problems uncovered by the buyer's inspector will cause delays in closing, and usually you will have to pay for repairs at the last minute, or take a lower price on your home.

It's better to pay for your own inspection before putting your home on the market. Find out about any hidden problems and correct them in advance. Otherwise, you can count on the buyer's inspector finding them, at the worst possible time.


Five ways to make the loan process go faster

Posted on 12:46 PM | By Smart Wealth Advisory | In

1. Have everything ready and in one place.
Elsewhere on our website, you'll find a list of things you might need in support of your mortgage application. If you get them all together and keep them in a safe, portable place like a special pouch or folder, you can cut down on time spent rooting around for things we may need. Also, you'll help cut down on your own anxiety and confusion.

2. Be honest and complete when you fill out your application.
"Fudging" your employment or residence history or omitting asset accounts you'd rather not have considered doesn't increase your chances of getting a favorable loan. In 100 percent of cases, it makes it harder, and take longer.

3. Respond promptly to requests for information.
During processing, we or the lender considering your loan will request information. Provide it as soon as you get the request, or return the call as soon as you get the message.

4. Get Your Homeowners Insurance Established.
Prior to closing on your purchase we are going to have to an insurance binder proving that you have obtained insurance coverage for the house. Do not wait until the day before closing to shop for it. It is very helpful if you have this taken care of a week before we close.

5. Let the appraiser in!
The appraisal is one of the lengthiest parts of the mortgage loan process. Studies have shown that the single biggest factor in appraisal "lag time" is the appraiser's inability to reach the homeowner to make an appointment. If you're refinancing and the appraiser calls to make an appointment, make it as soon as convenient for both of you.

And remember that the appraiser doesn't want to buy your house. He or she will say what the house is worth clean and tidy and in reasonable repair, even if you have some dirty laundry on the laundry room floor or dirty dishes in the sink. Cleaning doesn't get you a higher appraisal! Letting the appraiser in as soon as possible gets you a loan faster, though.

How Are Mortgage Rates Determined?

Posted on 12:31 PM | By Smart Wealth Advisory | In

One of the most important aspects to successfully obtaining a mortgage is getting the best interest rate. For most homeowners, this means securing the lowest, fixed interest rate.

Many homeowners rely on their bank or broker to secure their interest rate, often without researching lender rates or inquiring about how they move. Whether you’re interested in rates or not, it’s wise to get a better understanding of how interest rates move, and why. After all, a change in rate of a mere .125% to .25% could mean thousands of dollars in savings each year.

So “how are mortgage rates determined”:

Although there are a slew of different factors that affect interest rates, the movement of the 10-year Treasury bond is said to be the best indicator to determine whether mortgage rates will rise or fall. But why?

Because most mortgages are packaged as 30 year products, and the average mortgage is paid off or refinance within 10 years, the 10-year bond is a great bellwether to measure interest rate change. Treasury obligations are also backed by the “full faith and credit” of the United States, making them the benchmark for many other bonds as well.

So how will I know if mortgage rates are going up or down?

Typically, when bond rates (also known as the bond yield) go up, interest rates go up as well. And vice versa.

Bond rates ↑ Interest rates

To get an idea of where mortgage rates will be, bond investors typically use a spread of about 170 basis points, or 1.7% above the bond yield to estimate interest rates. So a bond yield of 4.00 plus the 170 basis points would put interest rates around 5.70%. Of course this spread can vary over time, and is really just a quick way to ballpark mortgage interest rates.

There have been, and will be periods of time where mortgage rates rise faster than the bond, and vice versa.

What other factors move interest rates?

Factors such as supply come to mind. If loan origination skyrocket in a given period of time, the supply of mortgage-backed securities will rise beyond the demand, and prices will need to drop to become attractive to buyers.

Timing is also an issue. Though bond prices may plummet in the morning, and then rise by the afternoon, mortgage rates may remain unchanged. That’s because sometimes the bond movement doesn’t always make it down to the wholesale markets, or simply because it takes more time to do so.

Inflation also greatly impacts mortgage rates. If inflation fears are strong, interest rates will rise, but in times when there is little risk of inflation, mortgage interest rates will most likely fall.

Economic activity will impact mortgage interest rates.

Mortgage rates are more susceptible to economic activity than treasuries, mainly because the average consumer or homeowner may lose their job or be unable to make their mortgage payment, while the US government typically doesn’t miss payments.

For this reason, jobs reports, Consumer Price Index, Gross Domestic Product, Home Sales, Consumer Confidence, and other data on the economic calendar can move interest rates significantly.

And don’t forget the Fed. When they release “Fed Minutes” or change the Federal Funds Rates, interest rates can swing up or down depending on what their report indicates about the economy. Generally, a growing economy leads to higher interest rates and a slowing economy leads to lower interest rates.

As a rule of thumb, bad news brings on lower rates, and good news makes rates climb.

The situation is a lot more complicated, so consider this is an introductory lesson on a very complex subject. And remember, these base rates don’t take into account any pricing adjustments or fees that could drive your actual interest up or down.


To Combat Negative Equity

Posted on 2:30 PM | By Smart Wealth Advisory | In

Negative Equity happens when the value of an asset falls below the outstanding balance on the loan used to purchase that asset. Negative equity is calculated simply by taking the value of the asset and minus the balance on the outstanding loan.

Negative equity often occurs when a homeowner purchases a house using a mortgage and then the economy starts to slow or home prices start to drop. After the house purchase, the value of the home decreases below the value of the amount owed on the mortgage, causing negative equity.
Negative equity is the term commonly used to describe the situation of having a home that is worth less than your mortgage. There is no easy solution to the problem of negative equity. You may want a bigger house or need to move to a different area for employment reasons.

There are a number of things you can do when you're handling Negative Equity:

1. Ask your home loan consultant
And/or broker if they have a plan that can combat Negative Equity. Be aware that sometimes, you may have to pay off the old mortgage debt over a shorter time period than a usual mortgage, such as 10 years rather than 25 years. So make sure it's the right choice for you. Basically, this option adds to your mortgages with lower time and higher interest rates.

2. Guarantor on a new loan
Some financial institutions may ask for a guarantor for a new home loan. You have to be very careful here - You're putting someone's finances on the line.

3. Pay less than full amount
Some financial institutions may agree to accept payments on shortfall debt by securing part of the debt on a new property as part of your mortgage and writing off the rest.

4. Obtain unsecured loan
Depending on your definition of unsecured loan, this could mean borrowing from illegal money lenders, or legal money lenders that have scammy schemes. This will probably be more expensive than a secured loan because a higher rate of interest is usually charged, but an unsecured loan does not put your new house at risk. The loan may also be over a shorter period which would mean the monthly payments are likely to be larger.

5. Renting Out your Home
Renting your old Malaysian property is the best way to cover the costs and stretch your budget a little wider. Beware of renting out your home - Some financial institutions may increase your home loan or mortgage's interest rate when you rent out. You will still be liable for housing repairs and mortgages.

6. Selling your Home
Selling your home could mean a fast and quick effect, but it's not all so simple. Read MHL's How do I price my home for sale and Manage and Save Money - Malaysia Mortgage. Take note that you need permission from your financial institution, and also persuade them to obtain the best price for the Malaysian property you're holding.

7. Borrow money - the amount needed to clear the shortfall from another source such as a personal loan, savings or from a friend/relative.

8. If you have an endowment mortgage you could check with an independent financial adviser to see if the value of the endowment could be off-set against the negative equity.

9. If you have the means, payments on an endowment policy or other investment scheme could be increased to build up enough cover to pay off the negative equity when the house is sold. You could check the surrender terms of any investments you already have. Have any policy valued both by the insurance company and second hand policy brokers.

10. If you have an endowment mortgage it may be worth discussing with your lender the implications of swapping to a repayment mortgage. The advantage of doing this is that with a repayment mortgage you would be paying part capital and part interest every month. This would mean you actually reduce the balance you owe on the mortgage over time and therefore reduce your negative equity.


Be very careful to get independent financial advice when considering changing from an endowment to a repayment mortgage. You may lose out on payments you have made on your endowment if you surrender the policy early on, as it may not be worth as much as you have paid in.

* It is also possible with a repayment mortgage to make extra lump sum payments off the mortgage which reduce the balance owing. You have to be careful that the lender accepts the payments off the capital balance and not just as advance payments off your monthly installments.

* If you want to move because you need more space, look at whether you can convert your loft or build an extension. In this way you may be able to stay in your home until house prices improve.

How do I sell my house when the economy now is so bad?

Posted on 2:13 PM | By Smart Wealth Advisory | In

First, you'll need to do your homework, and make sure all of your homework sells for themselves - It's crucial to your property pricing as this will impact not only the price of your house, but also how well you're going to sell or how fast you can sell your property.

* Find a good property broker and make sure:
o The property broker knows your area well.
For example, if you're staying in SS2, make sure you find a property broker who knows SS2 inside-out, including the duration of the property advertised already, what is the land value, the coming trend in the next 5 years, etc.

o The property broker advises you on reasonable price and environmental changes on your house.
For example, the property broker should be able to tell you how you should price your home, how will your house stand out from the others, etc.

o The property broker is able to tell you what house would sell best and why.
For example, if you're staying in SS2 and need information about who's selling, what's selling, where's selling and how to push your house, your property broker should be able to answer them all.

o The property broker should know the closing numbers of property price in your area.
For example, the property broker should be able to tell you this house will be sold for a closing number of RM xxx,xxx - Someone bought at that price, someone pays THAT MUCH for it.

o You get references from other people.
Find out more about your broker from people who've dealt with him. One best way is to talk to people around your area and scout for more information from people who has history with the property broker.

* If you're doing the tour guiding yourself (in your house), remember NOT to 'up-sell' them by:

o Telling them that other colours will look great if they re-paint.
o Other new 'fixed' furniture will be a great addition.
o Windows, walls, tiles and glasses could use a good polish.
o Doing the landscape (garden) will be a good idea.
o Spoilt items can be used in many other ways, etc.

One of the reasons is because you do not want your prospect buyer to feel they need to refurbish, remodel or reconstruct your house if they buy it. You want to SELL your CURRENT house.

* Rearrange your house, make it look something cleaner, newer and if possibly, with style. You can do that without spending any/little Ringgit by:
o Creating a lot of space in your house.
A lot of space can make your house look simple, tidy, clean, neat and polished.

o Rearranging your furniture.
Rearranging your furniture can help you catch another type of feel - Especially when there's a major move.

* Create a nice Picture Album/Book of your house.
Usually, people will look at an average of 15-25 houses before they decide which one they should buy. And since almost NONE of them has something so personalised like your Picture Album/Book, they will most likely go to yours first.
What should you put inside the book?
o House/Property floor plan.
o A simple map of nearby facilities like clinic, plumber, school, police station, park, etc.
o Website of your house, with necessary description.
o Photos of your house, from every room/location. The more angles of a particular area/room, the better.

* Remodel your house at the minimum level.
The little things you do on your house can mean a lot:
o Changing new door knobs.
You'll be surprised that your door looks new with the new door knob (of course, after wiping it)
o Changing new faucets.
Your sink will look cleaner, healthier and new.
o Changing your shower tap + head.
o Changing the handle of your cabinets, closets and drawers.

* Drive along your neighbourhood and feel for yourself.
Drive slowly, and look at others' property. The color, the decor, design, etc. After you've seen them all one-by-one in a very slow manner, go back to your house. Look at your house and compare. How do you feel? What should you do?

* When your property broker found a prospect buyer, collect valuable items and LEAVE THE HOUSE.
Allowing the property broker and prospect buyer alone in the house can be a 'WOW' factor to the prospect buyer, indirectly. This allows them to:
* Say things that they cannot say in front of you,
* Open lockers, drawers, cabinets and touch any other items they cannot touch when you're there.

Remember, the key to selling your property does not lie only to the country's economy, the land factor, or what others would decide how you should price it.

Debt Management

Posted on 5:52 PM | By Smart Wealth Advisory | In

Take 5 minutes of your time to read through this DEBT MANAGEMENT guide and save thousands of RINGGIT today.

1.Read/Study/Manage/Optimize your BUDGET
-Make sure you're cutting down on unnecessary items like eating out, new electronic gadget, jewelry, collectibles, new car, high speed internet connection, cable TV, etc.

2.C-U-T away that CREDIT CARD
- budget less than minimum for it
- Credit cards offer you the kind of expenditure power you might not afford and which you will (kind of abuse it.It's a disease; it's not your fault.)Instead of being susceptible to this ultimate power and pay a heavy price, take an angel's advice and repent for your financial sins.

3. Maintain an Emergency Fund
- An unexpected nosedive of income can result in a heavier budget burden.
- Always be alert and keep emergency funds.

4. Pay off your debts when you have that extra cash.

5.Work Harder
- Get a part time job or work overtime to get something done.

6.Limit your spendings.
- Sometimes, eating roti canai and teh tarik is better than ham, egg, cheese and mushroom for your breakfast. Also, you might consider cooking at home more rather than eating out.

Malaysia Mortgage and Malaysia Home Loan - Attainment

Posted on 5:50 PM | By Smart Wealth Advisory | In

It's important to have a good personal budget management on your personal finance, especially when you're attaining a Malaysia mortgage or any mortgages in that matter. Lenders will review your personal finances carefully before deciding whether or not to give you a Malaysia home loan.

Malaysia real estate agents offer all sorts of mortgages at a huge variety of rates due to constant economic fluctuations and heights. Shopping around for a good price from a quality lender would probably be your first and hardest challenge. There are a range of options from which you must select before choosing, including market value, property type & status, type of facility, interest rate, points, terms (loan tenure) and so forth.

Among the things you need to know are:
1. Mortgages can have fixed or variable interest rates.
2. You can pay more money up-front to reduce home loan interest rates.
3. You can refinance in Malaysia itself for your Malaysia home loans.
4. You can have the choice of a longer/shorter loan tenure (payment term).
5. You are needed to qualify for the maximum amount of money to borrow.
6. You can afford a bigger loan, reduce interest rate and pay less by choosing the right loan package.
7. Check your credit history by requesting a credit report.
8. It is possible to get a pre-approved mortgage, but it locks in an interest rate.
9. Downpayment for the house can jump up to 20%. That's why you need to choose the right loan package.

Home Loan Frequently Asked Questions

Posted on 5:39 PM | By Smart Wealth Advisory | In

How much can I afford?
This depends on your income and other financial obligations. As a rule of thumb, most house buyers buy houses that cost 1.5 and 2.5 times their annual income. For example a house buyer earning RM40,000 a year would buy a house between RM60,000 and RM100,000. Furthermore, the monthly loan repayment should not exceed about 1/3 of your gross monthly income.

In assessing your repayment capability, the financial institution would also take into account your other debt repayments such as car loan, personal loan and credit cards.

How much can I borrow?
This will depend on the value of your property, your income and your repayment capability. Margin of financing can go as high as 95% (inclusive of MRTA). The higher the margin, the higher you will have to pay per instalment. Also, at a given rate, a shorter tenure will require you to pay higher instalment.

How long does it take to process a loan?
It usually takes about one to two weeks for your loan application to be approved from the time you supply full documentation. You should ask the financial institution for the checklist of documents required for the application to avoid any delay.

What is the difference between conventional financing and Islamic financing?
Under conventional financing, your outstanding loan consists of principal plus the interest charged on you. The interest is actually the financial institution's cost in obtaining the funds. Islamic financing works on the concept of buying and selling where the financial institution purchases the property and subsequently sells it to you above the purchase price.

Why do I need a valuation?
A valuation is required if you are buying a completed property. The financial institution requires a valuation to ascertain whether the property provides sufficient security for the loan given. It also provides an indication that the property is worth what you are paying for.

Do I need to appoint a lawyer? Can I choose my own lawyer?
Yes. You need to appoint a lawyer to draw up your loan documentation. Normally, the financial institution will provide a panel of lawyers who are familiar with their documentation requirements for you to choose from. If you prefer to engage your own lawyer, you should discuss this with your financial institution.

Who pays for the legal fees?
Generally, legal fees are borne by the buyer. However, certain developers and financial institutions may offer to pay the legal fees on the legal documentation as part of their marketing package. In addition, some financial institutions also extend financing for the loan documentation fees.

What if I run into financial difficulties and cannot meet my loan repayments?
If this happens, you should contact your financial institution to discuss a reasonable repayment program, which could include extending the tenure of the loan.

Can I pay off my loan in full earlier than the agreed loan tenure?
Normally there will be penalty charges for early loan settlement. Depending on the financial institution, penalty charges will range between 2-5% of the outstanding amount. The charges that are made will depend on the type of product you have chosen and when you decide to redeem your loan. Note that in some loan packages, there are certain minimum periods you need to observe before full settlement is allowed.

Is there any waiver of penalty fees for early loan settlement?
Any waiver of penalty fee is strictly at the discretion of the financial institution.

Why does my outstanding loan remain high at the initial stage despite the repayments made?
During the early years of the loan, a significant amount of your repayments will go towards the payment of interest. So if you make partial repayments to repay the principal sum outstanding, you make substantial savings in your interest payments and thus shorten your loan tenure.

Can I make extra payments other than the monthly contractual repayments?
This depends on the terms and conditions stated in your loan agreement. By paying in extra money each month or making an extra payment at the end of the year, you can speed up the process of paying off the loan. When you pay extra money, be sure to indicate that the excess payment is to be applied to the principal. However, if you make a lump sum payment or partial repayments to your principal loan, you must give notice to your financial institution. The notice period ranges from 1 to 3 months.

Do I need a guarantor for a loan facility?
This is at the financial institution's discretion and depends on the credit standing of the borrower.

Does the financial institution have the right to charge my loan account for any miscellaneous charges incurred by them such as late payment charges, legal costs, insurance, etc?
The financial institution's power to impose charges on your account is normally indicated in the Terms and Conditions of the loan.

How long is the grace period for payment of my monthly instalment/interest?
Generally, the financial institution gives a grace period of 7-14 days for you to repay your instalment payment. Any payment received after the grace period will be subjected to late payment charges.

When does the financial institution release the loan to the seller/developer?
For houses under construction, the financial institution will release the progressive payment to the developer based on the claim made upon completion of each construction stage as certified by the Architect's Certificate. For completed properties, the loan will be released upon completion of legal documentation or when all relevant approvals, such as the approval of the state government have been obtained.

Can I purchase a house under joint names and apply for the housing loan only under my name?
The financial institution will consider such applications on the merits of each case, under the following circumstances:
• The co-owners are related as husband and wife, and one party is not working and the other party is solely responsible for the loan
• The co-owners are related as father/mother and children, the parents are old and not working and the children will be responsible for the loan
However, the above is at the financial institution's discretion and they may also consider other circumstances.

If the developer abandons the project, am I still required to service my interest/instalment payments?
Yes. You are still obliged to service your loan based on the loan agreement signed between you and the financial institution. However, since the financial institution has vested interest in the property, you could discuss a repayment plan with your financial institution. You should also report the matter to the Ministry of Housing & Local Government.

What happens when the loan is fully repaid?
When the loan is fully settled, the financial institution through its solicitors, will release its charge on the property. The financial institution (chargor) will uplift his claim on the property and the title to the property will be transferred to you.

What happens in the event of death of a borrower who has not bought insurance?
The deceased's survivor/next of kin can claim through the court the rights of the deceased's property. The person will have an option to either proceed to service the loan or redeem it. However, most financial institutions make it compulsory to insure (MRTA) against such an event.

What can the financial institution do if I do not make repayments?
If you fail to make three consecutive payments, the financial institution will take the necessary actions to recall the loan. In the worst case scenario, the financial institution will foreclose the property and sell it to settle the loan. The borrower would still be liable to pay the difference between the auction price and the loan amount outstanding.

What is the most convenient way to repay my loan?
Financial institutions offer a wide range of services to make banking easier for you. Some of the alternative ways of servicing a loan include:
• Open a savings/current account and arrange for standing instructions with minimal charges (if you maintain deposit and loan accounts with the same bank, the charges may be waived)
• Through an ATM transfer
• Internet Banking
• Telephone banking service
• Deposit your cheque at the deposit machine or send your cheques direct to your financial institution

Should I consider refinancing my loan if I am offered a lower interest rate?
The main consideration in refinancing would be the costs involved. As you are clearly aware, you have incurred a substantial amount to pay for the necessary fees to obtain your first loan. For example, processing fees, legal fees, stamping and transfer fees. Refinancing means you would have to incur the same charges again. Before you decide to refinance, you should ensure that the savings from the lower interest rate is enough to compensate all the costs incurred associated with refinancing, including penalty charges, if any.

What is My Debt Ratio?

Posted on 4:58 PM | By Smart Wealth Advisory | In

Getting your Malaysia home loan is a task you should consider very much beforehand. That will probably tie you up in debt for a long period of time. But says who being tied up in debts are entirely bad? In Malaysia home loan's older posts, WISE discussed certain techniques to consider when you're in debt -- And that could help you less endanger yourself tied up by mortgages.

Your DEBT RATIO can be calculated this way:

(FIXED loan repayment (monthly) / Gross monthly income ) * 100
= (1500 / 4000) * 100
= 37.5%

Unfortunately, before you could borrow some money, your creditors will take a look at your debt ratio before deciding. And until then, you will have to save up and spend wisely.

Tips on property purchasing #3

Posted on 12:33 PM | By Smart Wealth Advisory | In

11.Documentation
The primary documentation involved in applying for a housing loan is the loan agreement.A Loan Agreement is a contract signed between the buyer and the financial institution. A Loan Agreement contains major provisions such as the terms of the loan, principal sum of the loan, interest rates, default interest rate, penalty charges and repayment terms. It also sets out the duties of borrower and the lender and in the event of default, the rights and remedies of each party.

The other common legal documents that you may need to sign are Deed of Assignments, Charge documents and Power of Attorney.

Remember that throughout the tenure of the loan, your property is charged to the financial institution (i.e. the financial institution has a claim over your property). Whether you are buying a completed property or a property under construction, you should obtain an explanation from the attending lawyer on the major clauses of the agreement and the implications of each clause.

12.Valuation report
This documentation may be required if you purchase a fully completed property from a houseowner. The financial institution will appoint a property valuer from its panel of valuers to appraise the property. The valuation fee for this service starts from a few hundred ringgit upwards, depending on the value of the property and you will be charged for this service.

13.Insurance
It is extremely important to take insurance coverage when you purchase a house.
There are two important insurances to consider:
• The House Owner/Fire Insurance policy
This policy provides coverage for your property against natural disasters such as flood, fire, riot, strike and malicious damage. For properties with strata titles such as apartments or condominiums, you need not buy the insurance because the Management Corporation (MC) would have taken up insurance on the entire building.
You should ensure that you obtain the sub-certificate of the Master Policy issued by the insurance company from the MC and present it to the financial institution. This is necessary so that the financial institution is aware that the property has been insured and will not buy another fire insurance on your property. In such a case, you will be required to assign your rights under the policy to the financial institution.

• The Mortgage Life Assurance or MRTA
This type of policy provides for full settlement of the outstanding balance of the housing loan with the financial institution, in the event of total permanent disability or death of the borrower. Premiums can usually be included in the loan amount, and the repayment period of the premium is usually spread over the loan tenure.
The premium is only incurred once. There are no monthly or yearly premiums to be paid. In the event of early termination of housing loan, you will generally have the option to request for a refund of the premium for the balance of the unexpired period or to continue the insurance coverage.
Financial institutions have their own panel of insurers and most of them can arrange insurance on your behalf with the annual premium charged to your loan account.

14.Loan disbursement
The financial institution disburses (pays out) the loan once it has received advice from its lawyer that the legal process has been completed and the loan documents are in order. At this time you will be informed of the date and amount of the first instalment you have to make.

15.Rights and duties of the borrower and financial institution
Both borrower and financial institution have certain rights and duties during the course of the loan. Some of the more important ones include:

RIGHTS
i. 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

ii. 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/ instalments of the loan
• Right to enforce legal action in the event of default/breach of contract

DUTIES
i. 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 instalment of the loan

ii. Financial Institution
• Duty to discharge borrowers' obligations as described in the loan agreement
• Duty to consult borrowers on any changes made to the terms and condition, fees charged and other relevant information
• Duty to attend to all queries made by borrower

A Loan Officer can provide invaluable assistance, and clarify issues which you are unsure. Take the time to discuss your housing loan questions with a loan officer at length so that you can choose a loan facility that best suits your needs.

Tips on property purchasing #2

Posted on 12:21 PM | By Smart Wealth Advisory | In

3.Assesing your Loan Repayment Capacity
A common criterion is that your monthly loan installment repayment should not be more than 1/3 of your gross monthly household income. If you have savings or fixed deposits, they can be used to support your loan application as financial institutions may take them into account in evaluating your eligibility. Different financial institutions have different criteria in calculating the repayment capacity. In the case of a floating rate loan, you should also note that your monthly repayment may increase substantially when interest rates go up.

For example, when there is an increase in the Base Lending Rate (BLR), the interest rate on your loan will also go up, and your repayment would be higher. However, in most cases, financial institutions would allow you to pay the fixed amount of monthly repayment throughout the loan tenure and would make any adjustment caused by the variation in interest rate by increasing or shortening the loan tenure. You should check this out with your financial institution.

4.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

5.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 housing loan packages offered by financial institutions
i. Term Loan
• A facility with regular predetermined monthly installments. Installment is fixed for period of time, say 30 years
• Installment payment consists of the loan amount plus the interest

ii. 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

iii. 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 installments on the term loan portion is required
• Flexibility on the repayment of overdraft portion

6.Daily rests vs monthly rests
Financial institutions may charge you interest either on daily rests or monthly rests depending upon the products offered. In the case of daily rests, the loan interest is calculated on a daily basis, while in the case of monthly rests, interest is calculated once a month based on the previous month's balance. Under both types of loan, the principal sum immediately reduces every time a loan installment is made.

7.Graduated payment scheme
A graduated payment scheme allows lower installment payments at the beginning of the loan but this will gradually increase over time. This type of payment scheme will help house buyers to reduce burden of loan repayment for the first few years and allow them to allocate more money for other purposes. Over time, as earnings of house buyers increase, their repayment capabilities will also increase thus allowing higher repayment installments at a later stage.

A graduated payment scheme is also suitable for a house buyer who wishes to purchase a more expensive house but is restricted by his/her repayment capability during the initial years.

8.Prepayment flexibility
Different financial institutions may have different terms and conditions imposed on prepayments. Check the loan package to see if it allows you the flexibility to make prepayments or extra payments. Flexibility to make prepayments and paying interest on a daily rest basis may help save considerable interest charges. It is also possible to start repayment of the loan during the construction of the house, thus saving more interest charges. What is important is to make prompt monthly repayments.

9.Partial prepayment of the outstanding loan
Many borrowers find it useful to shorten the loan tenure by making partial prepayments with surplus savings or annual bonus. Partial prepayments can be in any amount. However, some financial institutions may impose restrictions on the amount to be pre-paid while others may impose a penalty. It is extremely effective in reducing the interest charges you would have to pay if prepayments are made during the early years.

10.Early termination penalty
Financial institutions may impose a penalty on full repayment of loan. Generally, the penalty imposed can either be a flat rate or an 'x' number of months' of interest (e.g. 1 month's interest). This is because when a loan is granted for a certain term, the financial institution would expect the loan to be repaid over the period agreed and has planned their cash flow on this basis. An early termination of the loan would therefore disrupt the financial institution's cash flow planning. As such, some financial institutions do not charge a penalty if sufficient notice is given (as stated in the terms and conditions of the loan) or if the settlement is made after the required minimum period to maintain the loan with the financial institution has passed.

Tips on property purchasing #1

Posted on 10:29 AM | By Smart Wealth Advisory | In

1. What Can I Afford
Before you commit to purchase a property, you should first work out a budget to help you determine how much you can afford and the ceiling price on any property you may wish to buy. As a guide, your monthly commitments on paying installments for your house, car and other payments should not exceed 1/3 of your gross monthly household income.

Your source of funding can be all or any combination of the following:
i. Savings
ii.Withdrawal from Employee Provident Fund (EPF)
iii.Loan facility from a financial institution

2.Choosing your Financial Institution
You should shop around before you decide on any financial institution. Remember that when you take up a housing loan, you will be dealing with the financial institution on a regular basis for a period of time. Therefore, you should also consider factors other than just interest rates. Below are some of the factors you should consider:

* How professional is the financial institution in dealing with customers?
* Does it offer quality service in terms of efficiency and reliability?
* What are the available loan packages and which package suits you best?
* What are the charges involved?
For example, legal fees, related government fees and charges, disbursement fees and others.
You should also be informed when and how often these charges are to be paid

An innovative financial institution may offer a more suitable loan package that suits your needs and their application process may be faster and hassle-free. It usually takes about one to two weeks for your loan application to be approved from the time you submit all relevant documentation.

There are also related costs such as professional fees and government charges that you would have to pay.
Below are some of the common fees and charges you would expect to incur:






Type Rate
1.Stamp Duties:
i. Sales and Purchase Agreement
1% for the 1st RM 100,000

0.5% for the next RM 400,000

ii. Loan Agreement 0.5% of the loan amount
iii. Transfer of Title( completed properties only) 1% for the 1st RM 100,000

2% for the next RM 400,000

3% on the excess above RM500,000

2. Disbursement fees
- fees for registration of charge
- land search and bankruptcy search
fees vary by state,land office and type of property
3. Processing Fees
- one time fee charged by the financial
institution for loan processing

•RM 200 for Loan range from RM100,000 and above.
•RM 100 for Loan range from RM30,001 - RM100,000.
•RM 50 for Loan range up to RM30,000.
4.Professional Legal Fees

For S&P and Loan Agreement

1% for 1st RM 150k

0.7% for the next RM 850k

0.6% for next RM 2000k

0.5% for next RM 2000k

0.4% for next RM 250k

0.3% for the excess of more than RM 750k




Please note that the type of charges and the amount charged might change in the future. You should meet with your financial institution's loan officer for further advice and discussion regarding any questions that you may have concerning the type of fees and legal services.

Types of home loans in Malaysia

Posted on 4:14 PM | By Smart Wealth Advisory | In

1.Fixed Rate Home Loans
Suits borrowers who wish to enjoy a peace of mind and be protected from increases in interest rates. Lock in at one of the lowest rates in history.

2.Hybrid Home Loans
Rates are going up, but what goes up must come down. Enjoy fixed rates for a few years and revert to floating rates subsequently.

3.Most Flexible Home Loans to 100 years
A loan that assists in meeting your financial needs

4.Fast Approval Home Loans
Home loan that is designed with the best interest rates, flexible financing, easy repayment terms and immediate approval.

5.Islamic Home Loan Packages
Syariah compliant Housing Loans.

6.Investors' Home Loan Packages
Buy and sell, then turn in a quick profit. Check out loans with zero or low 'Lock-In' periods. These loans allows you to sell the property and pay off the loan early without penalties.

7.Floating Rate Home Loan
with Interest Rates being pegged to 'Discounted' BLR throughout the entire loan tenure.

8.0% Interest Home Loans
0 payment in the first year.

9.High Flex Home Loan Packages
A Loan and Checking Account combined into 1. The more money you have in deposit, the lower interest you pay on the loan. Allows pre-payments and withdrawals of pre-paid amounts anytime. Suits business / self-employed people.

10.Zero Moving Cost Home Loans
Minimize your initial capital outlay. Lender pays for Loan Documentation Fee, Valuation Fee and Stamp Duty.

11.Low Deposit Home Loans
Low on deposit? Check out loans that offer high Margin Of Finance. May benefit 1st Time Owners.

These home loan packages are tailored to suit any of your loan needs. Most of the banks today do that. In order to compete with each other, now they're offering lower rates, better deals and greater value to their borrowers

Things to look out for in a home loan

Posted on 4:00 PM | By Smart Wealth Advisory | In

1.Types of Home Loan

This refers to types of home loan package you're getting. Whether it's Islamic or Conventional, Low Deposit or Zero Moving, state all necessary loan properties in this section.


2.Margin of Financing in Percentage (%) Value

This expression is the value and amount of loan granted by the banking institution to you as to secure the loan. Can go up to 95%.


3.Tenure of Loan

Duration of the loan (in years) to how long will the loan be fully paid, off its capital and interests.


4.Base Lending Rate (BLR)

Interest rate from the banking institution to you, covering their administrative costs and costs of funds.


5.Interest Rate

Some home loan packages would offer you different interest rates for a few years, or a BLR rate reduction for a number of years. Ask the banking official to explain thoroughly to you what are their home loan packages's interest rates are.


6.Monthly vs Daily Rest

Whether your interests will be calculated on a daily basis (Daily Rest) or Monthly Basis (Monthly Rest).


7.Monthly Installment

Ask your banking official to explain to you how much are your monthly installments

- First (1st) year to the fifth (5th) year.

Also, ask about how much will go to your interests before the capital is touched.


8.Legal Fees for Loan Agreement

Professional legal fees for legal documents necessary for your home loan contracts.


9.Stamp Duty Charges

For your loan agreement.


10.Disbursement Fees

Different type of fees such as registration of land search fee, charge fee, bankruptcy search fee incurred by banking institutions.


11.Processing Fees

The one time fee charged by the banking institution for processing documents.


12.Valuation Fees(Only for completed properties)

Written analysis of the value of home by the appointed valuer of the banking institution you applied the home loan from.


13.Insurance
- MRTA (Mortgage Reducing Term Assurance)?
- Homeowner's Insurance
- Is there a loan for insurance?


14.Others
- Are there partial prepayments?
- Is there a penalty on early settlements?

Is it Time To Refinance?

Posted on 3:28 PM | By Smart Wealth Advisory | In

In Malaysia, tens of thousands of homeowners seek advise from a third party professional to ask whether it's a good time to refinance. Depending on your financial status, it may be time to refinance.
Whether you REALIZE this or not, MHL is still going to make this solid statement. This statement do not apply to ALL the home loans out there, but to the common ones, this is it.

For your outstanding balance vs year chart of your home loan, you're may be
bounded to pay interest of more than 100% of your loan capital.Meaning to say,
if your home loan is RM100, you're may just be paying more than RM100 of
interest. Total sum = RM200++.

MHL does NOT make money by lying to her consumers. Honestly, we're just making you realize of monetary facts and showing you opportunities around the problem that many people face.


Refinancing could be just the right option for you, we might say. Let's take a simple calculation to further strengthen our stand:

After an outstanding loan of 5 years, you still have: RM230,963.00


Before Refinancing
Interest Rate: 300 months, BLR + 0.25% = 7%
Single installment payout: RM 1,662.44
Total interest paid: RM233,412.35



After Refinancing
Interest Rate:

1.First 36 months, 5.25%
2.Thereafter: 5.15%
Single installment paid: RM1,370.45
Total interest paid: RM178,830.68

You save: RM54,581


Refinancing may not be the best option for some people, due to the fact that:

1.They have a spending problem.
They spend way too much; disallowing them from making necessary payments at the beginning of each month.

2.They may just extend their loan tenure.
If you paid your home loan for 25 years already, what are you refinancing for? Do you want to add that small amount to another 20 years of your life? Forget it.

3.They borrowed more than 90% of the home's value.
If their home loan is below 80%, it makes sense. Otherwise, forget it.

4.Cashing out of their refinance.
Honestly, cashing out is their thing, because they see money. They may just end up paying longer.

Mortgage Lending Rate Malaysia MLR - New Mortgage benchmark by Malaysia Banking Institute

Posted on 3:18 PM | By Smart Wealth Advisory | In

The Mortgage Lending Rate ( MLR) is a new benchmark which will be used by some Malaysia lender which is similar to Base Lending Rate (BLR). Whereas the BLR is bankwide business based, the MLR is mortgage business base.

The BLR is based on Bank’s overall funding and business costs. MLR is based on the overall funding and business costs associated with the mortgage business.

The MLR may be revised quarterly/half yearly/ annually or at such times as may be determined by the Bank at the Bank’s absolute discretion subject to the guidelines, directives or circulars issued by Bank Negara Malaysia from time to time.

But should there be any revision, the MLR will be prominently displayed in the banking halls and website and also published the revised rate in major newspaper

Real Property Gains Tax in Malaysia RPGT

Posted on 3:04 PM | By Smart Wealth Advisory | In

The Honorable Prime Minister had announced that with effect from 1 January 2010, chargeable gains from the disposal of real properties which are held more than 5 years will be exempted from the Real Property Gains Tax (RPGT) of 5 %.

Therefore, any gains from the disposal of real properties in which the holding period is within 5 years from the date of acquisition of the real properties will be subject to RPGT at the rate of 5%.

This exemption is applicable on gains from all types of real property including shares in real property companies disposed by all categories of property owner who are individuals (citizens, permanent residents, non-citizens and non-permanent residents of Malaysia), companies as well as other property owners.

An Exemption Order under the Property Gains Tax Act 1976 will be gazzeted as soon as possible.


Tax Anaylysis Division
Ministry of Finance
28 December 2009

OCBC Home Loan Packages Updated 29 April 2010

Posted on 2:56 PM | By Smart Wealth Advisory | In

Ideal Mortgage
MLR – 0.75%
3 years lock in
Penalty: 2% of loan amount

Conventional Home Loan
BLR – 1.9%
5 years lock in
Penalty: 3% of loan amount

Islamic Loan
BFR – 1.8% / BFR – 1.9%
No lock in period

MHL-Latest Base Lending Rate BLR and Base Financing Rate BFR Updated 18 May 2010

Posted on 1:06 PM | By Smart Wealth Advisory | In

"KUALA LUMPUR: Bank Negara Malaysia decided to raise the Overnight Policy Rate (OPR) by 25 basis points to 2.50% at the Monetary Policy Committee (MPC) meeting on Thursday, May 13.

The central bank said the floor and ceiling rates of the corridor for the OPR are correspondingly raised to 2.25% and 2.75% respectively."

As in 2010, OPR has increased 2 times to the amount total of 0.5%. The normalisation of interest rate will continue, according to analyst.

No. Banking Institution With Effect From BLR (% p.a.) BFR (% p.a.)
1 Affin Bank Berhad 18/05/2010 6.05 6.05
2 Alliance Bank Malaysia Berhad18/05/2010 6.05 6.05
3 Asian Finance Bank 09/03/2010 5.75 5.75
4 AmBank (M) Berhad 19/05/2010 6.05 6.05
5 Bangkok Bank Berhad 11/03/2010 5.80 5.80
6 Bank of America Malaysia Berhad 15/03/2010 5.805.80
7 Bank of China (Malaysia) Berhad19/05/20106.05 6.05
8 Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad 10/03/2010 5.80 5.80
9 Bank Simpanan National 18/05/2010 6.056.05
10 CIMB Bank Berhad 18/05/2010 6.05 6.05
11 Citibank Berhad 19/05/20106.056.05
12 Deutsche Bank (Malaysia) Berhad 21/05/2010 6.05 6.05
13 EON Bank Berhad 19/05/2010 6.05 6.05
14 Hong Leong Bank Berhad 18/05/2010 6.05 6.05
15 HSBC Bank Malaysia Berhad 18/05/2010 6.05 6.05
16 J.P. Morgan Chase Bank Berhad 15/03/2010 5.655.65
17 Malayan Banking Berhad 18/05/2010 6.05 6.05
18 OCBC Bank (Malaysia) Berhad 18/05/20106.05 6.05
19 Public Bank Berhad 18/05/2010 6.056.05
20 RHB Bank Berhad19/05/2010 6.05 6.05
21 Standard Chartered Bank Malaysia Berhad 18/05/2010 6.056.05
22 The Bank of Nova Scotia Berhad 19/05/2010 6.056.05
23 The Royal Bank of Scotland Berhad 19/05/2010 5.75 5.75
24 United Overseas Bank (Malaysia) Berhad 18/05/2010 6.05 6.05