Planning to take a Home Loan to buy a house in one of the beautiful locales in Malaysia? Have you done enough research before investing in one? Do you know how home loans in Malaysia work?
Things You Should Know Before Purchasing A House In Malaysia Planning to take a Home Loan to buy a house in one of the beautiful locales in Malaysia? Have you done enough research before investing in one? Do you know how home loans in Malaysia work? If you haven’t done your homework yet, here are a few things that you should know before buying a house in Malaysia. ● ● ● ● Home Loans & Initial Costs: Most of the banks in Malaysia offer loans that amount to 90% of the residence’s price. This is applicable only for your first two properties. The rest of the 10% you have to pay in cash to the seller. For instance, if your property costs RM500,000, you have to pay RM50,000 upfront. Other Miscellaneous Costs: The upfront cost and loan are just one side of the coin. There are other miscellaneous costs that are involved while buying a property. There’s something called Sale & Purchase Agreement or SPA, a legal contract between a buyer and seller, for which you need to pay 1% for the first RM150,000 and 0.7% of existing property within RM1 million. Then there are stamp duty fees for change of ownership title. Stamping duty for SPA and loan (duty for loan amounts to 0.5% of the loan amount) have to be paid as well. Apart from these, there are several other additional fees that need to be paid, including Loan Facility Agreement legal disbursement fee, transfer of ownership title fee, Mortgage Reducing Term Insurance, bank’s loan processing fee, and Government Tax on Agreements. Some of these may cost you a few hundred ringgit. It’s always recommended to use an online calculator to figure out exactly how much you have to pay to buy your house. Monthly Instalments: Are you prepared enough to pay the monthly instalments against your home loan? Going by the present market rate, an interest rate of 4.2% to 4.4% p.a. can be levied on your loan. The monthly instalments may vary from bank to bank. Use online calculators to figure out the instalments offered by various banks. Credit Score: Having a good credit score will let you hold loans of up to 80% of your total income. So, make sure that you are a responsible borrower with no cases of default listed in any of the Malaysian banks. Look into various banks and see if any of them are rolling out special offers on home loans. If you have the financial muscle to flex, getting a home in Malaysia wouldn’t be that difficult.