Financing Your Property in Malaysia

Financing for your property assets is one of the best lesser known tools of leverage which can increase your networth. To own a house is no longer a dream or illusion and now everyone can have your own dream house easily. In Malaysia, the house owners only have to come up with a minimum of 10% or even less of the purchase price and the balance can be financed by the banks.

First of all, you may want to shop around to look at the different housing loan packages offered by banks. Different banks offer different mortgage packages. The borrowers have to choose the most suitable packages for themselves, according to their financial needs. Bankers would decide on the loan approvals based on 5 C's, which stands for Characteristic, Capacity, Capital, Condition and Collateral.

Characteristic refers to the repayment record of the borrower. This is given the heaviest weightage by the banks in deciding the loan approvals. The borrower's payment track record can easily be obtained from the Central Credit Reference Information System (CCRIS). Bank Negara Malaysia has a Kiosk Counter to allow the public to check their CCRIS. This is a free service provided by the Malaysian Central bank.

Capacity refers to the Debt Income Ration (DIR) of a borrower. The total debts and new housing loan installment divided by the total borrower's income must not be more than 40% in ratio. Capital refers to the networth of the borrower. Condition refers to the economy and borrower's condition. Collateral refers to the property that the borrower going to finance. The fair market value, marketability factor, and the condition of the property are always taken into consideration while considering the loan approval.

After your housing loan has been approved, the next step is to check the conditions of the letter of offer issued by the bank, which includes the interest rate, the holding period starting from first drawdown or last drawdown, installment amount, and other details.

Choosing a responsible lawyer is another vital issue. An irresponsible lawyer might drag the processing of the Sale & Purchase Agreement and Loan Agreement. The Purchaser might end up having to pay the penalty to the Vendor if the housing loan has not paid before the expired date. Hence, choosing a good, reputable and responsible lawyer will expedite the whole process.

As a purchaser and borrower, is important to follow up closely with the bankers and lawyers in order to get things done on time.

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How To Finance An Apartment Purchase In Malaysia

If there was a contest to determine the most popular business in Malaysia, mortgage lending could certainly compete. Just about any institution with cash i.e. banks, or access to someone else's cash i.e. insurance companies, wants to be in the residential lending game. It is a fact one can easily confirm with a quick glance at the local newspapers. You will see pages after pages of mortgage lending offers.

There are many lenders in the market, and the first time apartment buyer should talk to as many people as possible. The reason for this is to find the best mortgage lending offers available. In additional to the newspaper, good mortgage lending offers can also be found in the yellow pages, real estate directory and by asking real estate lawyers, real estate brokers and agents, and people who have bought apartments recently.

For many years the best known mortgage lenders were Malaysian local banks such as Maybank, Public Bank and Hong Leong Bank. In the recent years, the insurance companies have jumped on the mortgage lending business bandwagon. Even tough the insurance companies are not primarily in the mortgage business, they have managed to packaged mortgage plan bundled with their insurance product. In some cases, first time apartment buyers can obtain access to insurance funds only through mortgage bankers and mortgage brokers.

Mortgage bankers are individual and organizations who loan their own funds and the funds of others to real estate purchasers. Once a mortgage is made, the mortgage banker typically sells the loan to an investor. A mortgage broker, unlike a mortgage banker, does not have capital to lend but instead loans money that belongs to others. He makes his money on fees, charges and points. In addition, a mortgage broker may also service loans.

Just like in any country, to finance an apartment purchase in Malaysia can be a daunting task. A typical mortgage payment term for the average Malaysian is from 15 to 30 years. The best thing for a new apartment purchaser to do is to get advice from the right people before signing on the dotted line of a mortgage agreement.

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How To Find The Right Property Location In Malaysia

In the strategic property locations such as Kuala Lumpur and Petaling Jaya, you'll be surprise that even traffic congestion there has not lessened the values of these areas. Their attraction sometimes has to do with tradition. Generally, people are naturally drawn to certain areas and are not drawn to others. This has been the town planners nightmare. They draw plans proposing certain areas for development and those areas fail because they are not attractive enough to people.

If a property location is so important, that should be our primary concern when we are doing our investment research. To find the right property location in Malaysia, firstly the location should be good. One that is popular and has a lot of amenities. However, the location may be a new one and untested in the market. So what should you do in this case? In such a case, you have to look at the surroundings. Avoid if you can places such as ex-mining land, ex-dump sites and hill slopes.

Those are places with hidden problems for if the developer does not take precautions and do a good job on the foundations. You could have problems with sinking floors, cracked walls, unstable roofs and landslides. Retaining walls have been known to crumble and roads to collapse. You could also be subjected to unwanted smells and diseases in the case of ex-dump sites. Other undesirable locations are the surroundings occupied by squatters, graveyards and sludge ponds. Of course, there are those who will not like house located at T-junctions, near busy roads or other nuisances such are petrol stations, restaurant and next to a school.

Finding the right property location in Malaysia will depend largely on what the public prefer. The "ideal" location should be one which is attractive to most people acting as a natural magnet drawing people naturally to the area.

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