The Factors Influencing the Property Bank Loan

At the end of the five years, the buyer will then have two choices which is to keep the property or sell it. In circumstances where the buyer wish to keep the property, the buyer can actually pick to be in the scheme for another five years but with the condition that the buyer tops up with additional money to fulfil the 20% portion if the value of the property has raised. As for the investors which is the banks, they can decide to stay on or sell their 80% share to other institutions. The buyer can alternatively use the own money or take out a bank loan to buy off the 80% share from the investors.

When purchasing a brand new property from a developer, firstly, the purchaser need a booking fee receipt. This can be acquired after paying the booking fee to the developer. With the booking receipt, the purchaser can approach the bank and apply for a bank mortgage loan. The bank officer later on will need to check on all the documents submitted to ensure that every information and documentation is accurate. After ensuring all the documents are in correct order, the banks will have to begin with the approval process which will oblige approval from third parties such as, Income Tax Department (LHDN) and Employees Provident Fund (EPF). Upon getting approval from all parties, the loan approval will move quickly. The bank officer may then ask the borrower for sources of additional income to rescue the loan request. Other sources of income may include Fixed Deposit (FD). If all fails, the bank may then appeal the borrower to find a Guarantor of which extra Guarantor documents will be necessary.

A lock in period is highly related to early settlements. The banking industry is a competitive one, and many banks offer very good refinancing packages. Hence in order to prevent their borrower from transferring their loan to another bank, the acting bank usually makes the lock in period part of the agreement. This means that the borrower cannot terminate their loan within the lock in period. The lock in period is usually fixed at between 5 and 7 years at a rate of 3.5%. Balance purchase price means the rest of the amount that you need to pay for your property. When buyer decide to purchase a property, buyer will have to put down an agreed upon booking fee. The balance purchase price is the balance of the money that has yet to be paid for the property. In the event that the transaction cannot go through, the upfront payment will need to be refunded to the purchaser.

The term Charge is normally suitable to a secured loan such as a Mortgage Loan. In order to secure their place, the bank will take the property as security in case the loanee is unable to make their payment. In this case, as the property does not actually belong to the bank, the bank is known as the “charge” and the property owner as the “chargee”. Approval to Charge is the governing body’s law on conveying a property to another party. Every state has their own laws on conveying a property to another party. But required thru the board are the qualifying documents such as the identity cards of both parties and if the property is still under a banking loan, a letter of consent from the bank authorising the properties to be transferred is also compulsory. When the loan is settled, the financial institution through its solicitors, will release its charge on the property. The financial institution (chargor) will raise his claim on the property and the title to the property will be transferred to the buyer.

The Memorandum of Deposit is a safety degree for the bank. When signing up for a mortgage loan, the bank may need the loanee to open an account in the bank and put in a deposit in it where the bank is allowed to take the monthly repayment from the account if the loanee does not make their repayment on time. Disbursement of housing loan is the final stage of the loan. It is when everything has been agreed and the bank makes their first payout either to the loanee or the developer.

On the other hand, if the buyer has decided to sell the said property, the buyer has to leave the property and hand it over by the end of the fifth year or pay rental based on a 5% rental yield. In addition, for the first-time homebuyers who want to invest, under the scheme, there is space for buyers to rent out the house to get rental income but this only applies to buyers who are able to fork out 20% cash to purchase the house.