20 Tips to Increase the Success of Your Home Loan’s Application

Update: Corrected the formula for Net Income calculations. Credit to www.propertywtf.com Loan’s application declined to RM45.26bil from RM47bil! The Bank Negara had showed on their website that loan approvals’ percentage for residential properties in the country declined to 46.8% in the first half of this year from 50.1% during the same period in 2011. While the application for loans for residential properties purchases increased by 2.9% but the actual loans approved during the six-month period declined to RM45.26bil from RM47bil in the same period in 2011. This is evident when our clients have to resort to different banks when they buy their properties and this prolonged the property transactions period. Why declined and how it is assessed? One of the reasons for the increasing numbers of bank loan disapproval is because of the recent change of policy by Bank Negara to use Net Income instead of Gross Income of borrowers in approving loans. From our recent meeting with a local bank manager on this policy, he explained that if a person: Has a salary/total income of RM3,000.00 a month (after deductions of EPF and SOCSO) Has a car commitment of RM500.00 a month Other commitments of RM1,000.00 a month (house, […] read more

The Hidden Costs of Property Investment

You may have thought that property investment is a lucrative and ideal investment to venture today. Not only it can secure your financial freedom in the future, it also provides you passive income. For example, by purchasing a property now at a price of RM450,000-00, you may be able to sell it in the near future at a price of RM550,000-00. This is an outright RM100,000-00 profit from your RM450,000-00 investment. Now, think again! You’re not actually making a RM100,000-00 profit at all. When you purchase a property, you have to pay the costs of acquiring a property. The same applies when you sell your property. As a prudent investor, you have to calculate the legal costs on top of costs of hiring property agents and so in your acquisition or disposition of property. Let us briefly explain the costs that may involved in the property transaction from a lawyer’s point of view. Legal Fees Legal fees are fees payable to lawyer for taking instruction, drafting of agreements and documents and attendances thereof. These fees may include preparation of Sale and Purchase Agreement, Memorandum of Transfer, filing CHKT forms and various other documents and handling correspondences. These fees  are governed by the legal […] read more