THINGS TO KNOW BEFORE APPLYING FOR HOUSING LOAN (EP 1)
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- Опубліковано 10 вер 2024
- Rena FB page: / rena.choong
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Another brand new segment and this series focuses a lot on the mortgage side of the investment journey. And for this series I got in my investment coach, Ms Rena to assist me.
For the first episode, we discussed about the different types of loans are available in the market. We have hire purchase, credit cards, personal loans, overdraft, and housing loans. Then we have fixed rates versus flexi rates. Then what about flexi loan? Semi flexi?
Also, our monthly installments are separated into principal and interest and how would that help us manage finances better?
I spent thousands to attend property course many yrs ago and actually dealt with many bankers only I understand how diff loan system works, bankers also wont have time to explain to you in such detail lol.. Thank you Sean and Rena for the educational content for free, it's a gem.
for PB, semi flexi also work the same way as full flexi, any extra amount paid after settling the monthly payment will reduce the principal amount, can be done so via e-banking. No need to inform banker whatsoever.
But then why they have both then? What would be the difference?
@@iherng If I'm not mistaken, putting money in is the same for both, just that with full flexi it is easier to withdraw, for semi-flexi you need to go to the counter for withdrawal, and there will be additional charges.
My hlb semi flexi also offer the same. Can put in extra to reduce interest rate. But the hassle is when you want to withdraw, have to walk in and take few working days to process
there is a term in the offer letter:
Any excess payment received after deducting your instalment and
any charges payable, is deemed as an “Advance Payment”.
Advance Payment will not be considered as prepayment and
thereafter will affect your loan outstanding balance for interest
calculation purposes. Interest is calculated on the Eligible
Outstanding Balance, which is the difference between the loan
outstanding balance (inclusive of charges) (“Outstanding
Balance”) and the Advance Payment or up to 30% of the
Outstanding Balance, whichever is lower.
basically u can see straight away the principal reduced instantly
@@iherng Sean , me into Semi Flexi as well , when i check with Bank Harimau , they said it work similar to Full Flexi, like excess amount will definitely deduct your outstanding standing balance and in few months time and few years it improves your interest deduction as more percentage of payment will go to your principal..
The catch in semi is the advance payment in case of emergency you want to withdraw each withdrawal cost additional RM25. My bad i didnt ask for waiting period.
For full flexi , with online banking you can withdraw anytime with no changes and transfer to your other saving accounts easily on the same day.
But there are in one part these video @Rena said both full flexi and semi is almost the same.
But than again 😂 further conversation of these video its explains semi flexi is just going to dump money in advance and will not improve anything.. So neither me I am confused state after listening to Rena am I doing silly mistake.. 😅😂..
But within 4-5 years i can really see the amount of interest is charged based on amout of outstanding cause there are some decent potion of advance payment.
Semi Flexi vs Full Flexi. ? I think Sean , maybe another video please 😂❤️
Man. I will force my son watch this video everyday, once he turn 18, thanks Master Iherng❤
Hahahaha. Thanks for watching!
Good share Sean! I notice that for semi flexi loan how the advance payment works really depends on the bank itself. I have a semi flexi loan with UOB and I'm making AFT to the loan account with additional amount every month. The additional amount is automatically deducted to the principal amount. While another friend of mine which I can't recall which bank he borrowed from, had his additional amount parked under advance payment instead of going directly to the principal.
two gurus joined hands helping to educate public, Awesome!
Thanks for watching Rrenn!!
Just note that Hire Purchase rate of 3.00% is flat rate which is equivalent to about 5.6% effective rate.
yes good point here that not everyone is aware
Nice
Thanks for sharing Kevin!!
and how do you calculate that?
What's the difference between the normal HP rate of 3% VS effective rate of 5.6%? How to calculate effective rate?
Thank you. Learnt the difference between full flexi and semi flexi loan.
Thanks for watching Coco!!
Thank you so much for the sharing it helps me alot, especially for the full flexi loan knowledge, kudos to both you and keep up the good work
Glad it was helpful!! Thanks for watching=)
I like this episode. I think you need to do one episode regarding full settlement as well.
Let me work on it. Thanks for watching!!
This is very insightful, thank you Sean and Rena!
Thanks for watching Adib!!
Hire purchase of 100k in the example, let's say I settle after 6 months, I am not going to pay RM 160k. Which in the video gives an impression of this going to be the case. In fact Maybe you just need to pay RM 99K for final settlement. Because most of your monthly installments pay for the interest.
Usually the confusion for public is housing loan must quotes in Effect interest rate.
Hire purchase usually quotes in Fixed rate for layman. Easier to understand.
Housing loan- you can do partial payment.
Hire purchase - Only available for Full settlement.
( Some banks may charge penalties for early settlement)
Posted a more detailed comment just now. Not sure why it disappeared.
Just some correction towards hire purchase, bank use Rule of 78 to calculate the interest charged on each payment. Therefore the interest is not charged evenly across the payments.
For example, for a loan of 100k for 12 months, with a interest of 5%, the monthly payment is 875.
First month interest is 12/78 * 5000. RM769. First month only RM106 is used to reduce principal.
Second month is 11/78, third 10/78 and so on. The denominator is the sum of all payment number (1+2+3…+12). The numerator starts with the total number of payment and reduces by 1 each payment.
For another example, 3 year loan first month interest will be 36/666 * total interest.
If you settle car loan early, your savings is the interest not paid. For example, if you settle after month 6 of a 12 month loan, you save 21/78 of the total interest.
But the total price is already calculated right?
For eg 100k car, 3% interest. If it's 3 years, the total will be RM 109k.
If it's 5 years, the total will be RM 115k.
If it's 9 years, the total will be RM 127k.
The total amount will then be divided into your monthly installment amount. So even by paying early, it's still the same total....right??
The allocation of interest to the principal by the bank would be different I understand. But the total amount paid by the customer is still the same isn't it?
@@iherng installment calculated based on total amount with interest. But there is still a breakdown of interest and principal on each payment.
Wow education not in a book. Thanks for sharing
Thanks for watching Jerry!!
Hey Sean & Rena! Was wondering if you guys could cover the pros & cons for Mortgage Conventional Loan & Islamic Loan!
Thank you, for making this educational video about financing.
I Believe a lot of my peers do not get what i say somethings when I talk about about loan to them
unless they work in properties agent before or banker. Normal Wage Worker just do not get it .
Taking Loan to take owner ship of property is not worth I ended up paying more than I should for the interest rate. Why should I get a loan.
Its very heart breaking, I wish to educate them but they are not listening.
Keep up the good work.🥰🥰
now im clear thanks lot got lots of things to learn
hi boss, according to the banker, yes we can save a lot if can clear a fixed rate hire purchase early between first 1-3 years, the earlier the better but towards the end of the tenure, not much we can save…
Do you mean a 1-3 years loan versus a 9 years loan?
@@iherng hi, would like to know your opinion if I have 50k in cash. Would it be better if I pay and clear a HP loan with 50k outstanding which is currently at its 5th year (originally 9year HP) Or put it into my housing loan (550k loan amount @ 35 years) to reduce the interest rate? I thought of clearing my HP loan to ease my total monthly payments and give me some peace of mind to only focus on a single loan.
Thank you so much much for all your educational videos! It really help me gain the confidence in purchasing my first home ! Thanks to Rena as well for her teachings !
@@iherng if your HP is in early stage or 1-3 years from 7/9 years loan, the bank confirmed that we can get waiver of interest due to early settlement...as such no need to pay the whole amount balance calculated from total interest....
@@anap7268 Correct me if I am wrong, trying to do some comparison here with the examples that mentioned in the video. Let say our HP is 100k for 5 year tenure on 2% interest. If we settle the amount after 1st year, the total interest we will pay is 3,836.07 (as normally bank will charge extra when exit the HP earlier, but still better than letting the bank earn a full 10k interest). On the other hand, instead of settle the HP, we use the 100k settle part of the 500k loan, 35 years tenure on 3% interest after 1st year. And after the 5th year, we fully settle the home loan, i wonder how much are we actually save from the initial 100k early payment? 🤔
@@terencetcf for me I will still clear my HP since the basis of interest rate for HP is always higher than mortgage loan, but again everything back to the amount that you can save at that moment of time when you do the settlement....if the house is paying by other people says the tenant, and HP loan is not too burden for us, why not just enjoy keeping the cash right.....trust there is no definite answer without tabulating all the figures...
Thanks for sharing this session. Insightful and easy to understand 👍
Glad you enjoyed it Sherly! Thanks for watching=)
Learn so much after watching this! thinking back I was so foolish just simply sign HP loan and SPA 😂
Really learn alot.thx buddy,and tuition teacher
Great 1st episode Sean. Cant wait for the next. Great sharing from both of you.
Glad you enjoyed it Shane!!
This is very informative and something the general public does not know about. I was lucky enough to know and understand this when I attended one of the property investment courses and the guru spoke about this. Thanks for continuously making contents of such! Really enjoyed all the contents that you have made!
Very informative! Thanks
Thank you, learn new things
Glad to hear it Kenny=)
Very informative episode Sean!! Can we switch our plan from semi flexi to full flexi halfway of the loan tenure? Or its fixed??
Wrong info for Hire purchase bro. You can early repayment and the bank will still reduced your final payment. The bank will re-calculate based on reducing balance interest. You can ask your bank if you want to early settle your Hyundai.
Thanks Sean for the info appreciate it
:)
Omg the marker sound... 🫠🫠😵💫😵💫
Thanks for watching!!
Since u mention the more u borrow, the lesser the rate.
Let say I have cash 300k, if I loan 700k, my interest rate is 3.3%. And if I loan 400k, my interest is 3.4%. Can I take advantage of taking loan for 700k so that I entitle 3.3% of the interest and the following month, I put 300k to reduce the principle to 400k and the 400k balance will only charge with 3.3% interest? In this case, will the interest remain as 3.3%?
Most likely. Plus the 3.3% is on the difference you owe the bank which is on the RM 400k only. Great thinking Jason!! But I'm not too sure whether will you get such rates lah as that depends on your profile as well.
@@iherng thanks for replying :) appreciate your reply. One more question. If the SBR keep on rising, will there be any maximum or ceiling effective interest rate towards the loan?
How about offsetting House loan? The banker told me the more money in my account the more the offsetting effect on interest? And can take out the money anytime?
Most likely that would be the full flexi loan account. Apparently I just found out some banks decided to waive the monthly charges.
The example in the explaination kind of confusing the people. Your total loan balance (principal+interest) will be reduced when you do the full settlement (settle early) for the fixed rate loan. But yes, you cannot do partial principal payment on fixed rate loan to reduce the interest amount.
Want to know. If lppsa, it's a reducing loan but the interest rate is faxed at 4%.
If we pump in money earlier, will it be beneficial? From what I know it'll reduce total loan tenure, as monthly deduction has been fixed when sign loan agreement.
Just the insurance portion has been paid fully prior.
dont have 500k, 100k and 50k...also can watch kan
In the future you will have Mike. Plus it's not in cash, but credit.
when I use mortgage calculator, the amount stated there is 2462.32 or something. But in the bank offer letter, it straight round up to 2463 each month. is this normal? coz it means I am paying the bank excess of 68 cents across the entire tenure, no?
Really good video. Thanks.
Glad you liked it Izzad.
Hi Sean, i have a commercial property loan, which is a fixed loan. Wonder can i change to a full flexi or semi-flexi loan? is that advise to do so, if my end purpose is to save up more interest payment, if im willing to put in more money, example into a flexi loan account,
Not sure true or not, but it seems like currently seldom bank offer full Flexi, and even if there is, the interest rate is higher than the conventional loan. Is this true? If otherwise, hopefully there is sharing on which bank offer such products? TQ
If I get cashback from developer and put into the flexi loan account can I get lower monthly installment instead of a shorter loan repayment period
Hi. Let say if I want to make reschedule for fix car loan, is it possible? Like originally 9years to 5 years.
I don't think you can based on conventional loans. Maybe you can speak to your banker for better advice because I don't have the details to your details.
Very good info to know......can u do video explain about LPPSA ..gov loan
Let me discuss with Rena yea. Great suggestion!!
Look forward to epd 2.
Thanks for watching!
Hey sean, is flexi loan same with home equity line of credit ?
for full flexi/overdraft: to me the breakdown towards principal and interest amount in most time is irrelevant unless you have intention to calculate the total sum over your loan period.
for most people, you can just keep this things simple. since the interest rate is already an effective rate, your concern amount should be how much you still owing the bank at the end of every month.
if you owe the bank RM100 and your rate is 6% per annum, than bank will charge you interest of RM 6/ 12mth ~50cent a month. so next month your debt will grow to become RM 100.50.
thank u iherng!
Hi Sean, just discovered your very informative and educational channel after I started property hunt last week. I have went to 6 different projects and show units already, I realized there is different in these booking fee, I wonder how come all different projects have all these different types of booking fees, and then all promise full refund even you regret later, but hor when really ask them to refund hor, got a lot restrictions one ler, I now know because I impulse booked last week, then regret but immediately cancel loan application jor, but my booking fee not refundable. T^T
If there is black and white written for refund with no question asked, then they should refund. But many developers required one loan rejection letter from bank
@@jefftyt loan rejection letter will affect future loan application?
By law developers are not allowed to take in payment for residential property before the SPA is signed, you can file a complain to ministry of housing, ehome.kpkt.gov.my/index.php/pages/view/220 , soalan 5
Hi, if buy property condo though agent, must engaged agent's banker, mortgage consultant or just find own banker? pls guide Thx
Either one will be fine. But agents would sometimes get referral fees from bankers if their customers were to engage their services. It may also be familiarity and certainty or work ethics to ensure the deal goes smoothly. For the home buyer, the cost is the same. Sometimes higher if you don’t have a personal familiar banker to assist.
@@iherng "Sometimes higher if you don’t have a personal familiar banker to assist." Please help to elaborate more. Thx
Will the interest be reduced if i pay more for a semi flexi loan during the lock-in period of 3 or 5 years?
Most likely but you'll need to inform the bank on paying more.
Let's say I plan to sell the property for capital increment after 2 years upon purchase, any benefit for me to clear loan repayment asap?
Erm, I don't see any benefits though. The more challenging point is how do you guarantee capital appreciation after 2 years? Usually it takes way longer.
Bless yall istg
love ur show,
Wow thanks Glenn=)
Thanks Sean and Rena for the insightful video. Could you also enlighten more about Islamic loan? Cheers 😀
Let me ask her on the upcoming session!!
@@iherng thanks 😊
Now 4.2-4.5 this year for HL
Well then this is a great documentation of the interest rate of that period. When it was 2.9% people still complain it was too high hahaha;)
Very good sharing
I have semi flexi loan, and i have some amount in 'Advance Payment' but I did not do extra prepayment to principal... Question: Does the monthly interest rate calculate base on the monthly balance included minus the Advance Payment?
if no, what is the purpose putting money in Advance Payment?
The only purpose - in case you forgot to pay on time or on the trip to Mars, then it auto deduct from the advance payment
Interesting to know about HP. I recently took up a HP for 5 years but I told the banker I may pay off at 3rd year. The banker mentioned the 4th and 5th year interest will be credit back to me. Now I am confuse, whether what the banker told me vs Rena explanation, which is the correct situation?
For Hire P loan, usually the bank will credit back the interest to u if u go for fully settlement. However, the bank will charge u one month interest as a “fee for early settlement”.
Which bank is ur housing loan Sean? 2.9% is low
Affin bank, signed last year Nov.
Public bank semi flexi loan doesnt need to apply (write in or walk in). Just do it online like those full flexi.
You will have 2 accounts, saving and loan account. Make sure you transfer the extra money into loan account instead of the saving account.
Do note that however, the extra amount you paid will be carry forward to the next month.
Example monthly loan repayment rm2k. If you pay extra less than 2k, the money will go into your next month repayment. However, if you pay 4k extra, 2k will be next month repayment and the remaining 2k will go into your principle
Sifu.....meaning if my loan repayment is 2250 i transfer 2250 to saving acc for auto deduct and also pay more than 2250 to loan account for reducing the interest?
Or I can straight pay 2250 X2=4500 to loan account
All this without needing walk in PBank to tell them I want to pay extra every month. What about one lump sump of 20k end of the year.....need to let them know?
So fixed interest or fullflexi is better?
Depends on your preference and income method either you're a wage earner or business owner. Plus some banks are waiving the fees for full flexi dy.
Does Ms. Rena work as a loan/mortgage broker? Or mentoring? Thanks
She is the Head of Mortgage Department in Far Capital, a property investment consultant company:)
Hi can you make a video in Chinese for others as well ? Thanks
why is ep 2 not in the same series
Are you sure?
what about refinancing?
👍🏼 episode
Her: *explaining something
Him: hmm hmm hmm
😂😂😂
nowadays can put money into kwsp..better interest..😆
this one depends on the performance, if performance is bad, u may get low interest. if not mistake , the lowest is about 3+%. if u are lucky or know how, invest in stocks, way faster. i get 33% increase in just few month, i earn quite abit.. BUT, of course its abit risky with high capital
can you use a business as a housing loan?
Do you mean using business to qualify for a housing loan?
@@iherng using a business as evidence to support your income, also having a FD to support it. for example a 1.2million home and then you wanna loan 80% while having about 600k in FD
Very good explanation. Thank you for your sharing.
When episode 2 will be uploaded? How many episodes for this Housing Loan Series ya?
Just to share, the credit card interest is a myth. Please answer those bank promotion call, the interest offer by the credit card is way lower than HP loan, hence you can really use Credit Card to buy second hand car. If your credit score is very good, you can entitled 2.45% PA by cash advance.
malaysian have bnak to settle our loan for buy a house
Thanks for watching!!
Too low for her to write ....omg
Thanks for the video but the amount of times you guys were saying “hmmm” is damn annoying!