A home loan is a sum of money that you apply for or borrow from a bank to assist you in purchasing your dream home. Each loan will be charged an interest rate determined by the loan amount and the repayment period. So, keep in mind that each bank will have a different interest rate, and you should do some research before applying for a home loan.
The best timing to apply for a home loan is when:
In general, certain banks in Malaysia offer 3 types of home loans:
A term loan has a predetermined repayment schedule. You need to pay the same amount per monthly instalment for the loan duration. Furthermore, if you make any additional payments, you will not be able to withdraw the other payments with this term loan.
A semi-flexi loan allows you to make an advance payment of your loan amount, and make your total interest is also reduced due to the advance payment. You can, however, request to withdraw the additional costs you have made, but you will be charged a processing fee. Please keep in mind that processing fees may differ from one bank to another.
A flexi loan allows you to make additional payments or withdraw excess funds from your current home loan account without going through the complicated approval process. In which case, the instalment amount will be deducted automatically from your existing account each month. Not just that, you also have the option to withdraw your additional payments at any time you want.
Secured loans that you (borrower) will obtain from a lender (bank) to purchase a property as collateral.
An unsecured loan obtained from a bank, credit union, or online lender.
A sum of money borrowed to finance postsecondary education or higher education expenses.
You only have to pay the interest rate on this loan, which will be deducted directly from your current account. There is no repayment period for the loan. However, the interest rate you must pay is higher than usual.
Al-Bai’ Bithaman Ajil
An Islamic home loan based on the buy-and-sell principle. The bank will pay the current market value for the property on your behalf. They will then sell it back to you at an agreed-upon price in monthly instalments.
An Islamic home loan in which you and the bank agree to purchase a home. You will become a bank tenant, and your monthly payments will cover both your loan and a portion of the bank’s ownership stake in the property.
The common eligibility criteria are:
Each bank has its own set of eligibility requirements. As a result, consult with a representative bank to obtain accurate information.
Once you have submitted all of the required documentation to the bank of your choice, the application usually takes 2 days to a week. The loan amount, loan term, and eligibility will all influence how fast the process will take. However, once again, it is dependent on the bank you select.
You can choose and apply for the home loan that you want by going to the selected bank branch or by visiting their official website.
There could be several reasons why your home loan application was rejected, some of which are as follows:
There are other reasons why your home loan application was rejected.
In Malaysia, home loan interest rates are determined by Base Rates (BR), which specify the lowest interest rate that banks will offer on home loans. The average annual interest rate is between 1.75% to 2.75% p.a.
Yes, you can refinance your home loan based on new terms and conditions according to the bank you choose.
A period during which you will be penalised if you pay off your home loan earlier than agreed. The fine ranges from 2% to 5% of the total amount.
“Margin of Finance (MOF)”
The amount of money that a bank will lend you for your loan determines how much cash you must pay upfront for the property.
It is the amount of money you paid to the bank in addition to the principal amount.
An estimate of the property’s worth and the stamp duty is calculated based on its value.
The base rate is the interest rate charged by Bank Negara Malaysia to commercial banks for loans.
“Base Lending Rates (BLR)”
A rate set by each bank based on the cost of borrowing the money to be lent to borrowers.
Repaying an existing loan and replacing it with a new one with new terms and conditions.