Monday, December 5, 2011

10 of the World’s Greatest Mansions and Grand Houses

We were thrilled to see that Cheong Fatt Tze Mansion, located in the Pearl of the Orient, Penang, also made the list.

1. Marble Palace Mansion, Kolkata, India

The extraordinarily grand 1853 Marble Palace Mansion is indulgently overstuffed with statues and lavishly floored with marble inlay. The house is a blend of neoclassical and traditional Bengali architecture, and filled with chandeliers, mirrors and clocks. Amid the eclectic jumble of objects you’ll find a mahogany bust of Queen Victoria and paintings by Rubens and Titian. There’s also a lake and an aviary with peacocks and cranes. Yet the mansion’s fine paintings droop in their dusty frames and the antique furniture is haphazardly draped in torn old dust sheets. It would make a great horror movie set. The Mansion is still a private residence and you can only see it by tour. You’ll also need a permit from West Bengal Tourism

2. Cheong Fatt Tze Mansion, Malaysia

Built in the 1880s, the magnificent 38-room, 220-window Cheong Fatt Tze Mansion was commissioned by Cheong Fatt Tze, a local merchant trader who left China as a penniless teenager and ended up as ‘the Rockefeller of the East’. The mansion blends Eastern and Western designs, with louvered windows, art nouveau stained glass and beautiful floor tiles, and is a rare surviving example of the eclectic architectural style preferred by wealthy Straits Chinese of the time. The house sits on the ‘dragon’s throne’, meaning that there is a mountain (Penang Hill) behind and water (the channel) in front – the site was chosen for its excellent feng shui. The building was rescued from ruin in the 1990s. You can visit it and also stay in the exclusive hotel.

3. Werribee Mansion, Australia

The 19th century was boom time for this corner of Australia; at one stage during the gold rush, Melbourne was the richest city in the world. The good times are reflected in the city’s lavish Victorian architecture. Werribee Mansion was built in the Italianate style by the Chirnside family, wealthy pastoralists, in 1877, and is a solid testament to colonial ambition. It sits in charming formal gardens with a lake, glasshouses, a grotto and a sculpture walk. The Werribee Park Shuttle runs return services from central Melbourne. Check www.werribeeparkshuttle.com.au for schedules and fares.

4. Villa d’Este, Italy

In Tivoli, near Rome, the High Renaissance Villa d’Este was a Benedictine monastery before Cardinal Ippolite d’Este (Lucrezia Borgia’s son) transformed it into a pleasure palace in 1550, and withdrew here to recover from his disappointment after a failed bid to be pope. It’s set around a courtyard, and has frescoed ceilings and a central room looking out onto the fantasyland of the gardens, with their hundreds of whimsical water features: fountains, pools, grottoes, nymphs, dragons, winged horses and a water organ. The villa is open from Tuesday to Sunday from 8am to one hour before sunset.

5. Castle Howard, England

Stately homes may be two a penny in England, but you’ll have to try pretty hard to find one as breathtakingly stately as Castle Howard, a work of theatrical grandeur and audacity set in the rolling Howardian Hills. This is one of the world’s most beautiful buildings, instantly recognizable from its starring role in the ’80s TV adaptation of Brideshead Revisited. It took three earls’ lifetimes to build; it’s still inhabited by the Howard family, but you can take tours of the house and grounds (18th-century walled garden, roses, delphiniums, temples, fountains and all). Castle Howard is 15 miles northeast of York, off the A64. There are several organised tours from York.

6. Fallingwater, Pennsylvania, USA

A Frank Lloyd Wright masterpiece from the 1930s, Fallingwater is a typically clean-lined, cantilevered structure that appears to float over a waterfall. It was built for the Kaufmann family, wealthy department-store owners, in the woods of southern Pennsylvania. The house is made of locally quarried stone, bringing it into harmony with the landscape – it’s almost like rocks have risen up out of Bear Run creek and shaped themselves into the house. Inside it has an almost Japanese minimalism, with the sound of the waterfall burbling in every room. It’s set in forested gardens that also blend seamlessly with the natural environment. To see inside the house you must take one of the hourly guided tours; reservations are recommended.

7. Château de Chambord, France

Chateaux don’t get any grander than Chambord, built in the 16th century by François I so he could hunt deer and hang out with his mistress. Its most famous feature is its ingenious double-helix staircase. Attributed by some to Leonardo de Vinci, the two helixes ascend three stories without ever meeting. Then there’s the Italianate rooftop terrace, where you’re surrounded by so many towers, cupolas, domes, chimneys, mosaic slate roofs and lightning rods that it’s like being in a small city. It was here that the royal court assembled to watch military exercises, tournaments and the hounds and hunters returning from deer-stalks. Chambord is in the Loire Valley. Get a train from Paris Austerlitz to Blois; there’s a Blois–Chambord shuttle from May to September.

8. Catherine Palace, Russia

The baroque Catherine Palace was initially built by Peter the Great’s wife, Catherine I, as a summer pleasure palace. Elizabeth, her daughter, spent her life remodeling and extending the palace with the help of her architect Bartolomeo Rastrelli, who later designed the Winter Palace. In her day the entire exterior was picked out in gilt. Catherine II made slightly less flashy additions such as the Agate Room and a Chinese drawing room. The Catherine Palace was raided and gutted by German forces during WWII, but has since been largely restored. Don’t miss the stunning (replica) Amber Room with its solid amber panels and amber parquetry floor. The Catherine Palace is in the village of Tsarkoye Selo, an easy day trip from St Petersburg.

9. Sleeper-McCann House, Massachusetts, USA

The lavish ‘summer cottage’ of interior designer Henry Davis Sleeper has over 40 rooms and is also known as the Beauport House. Sleeper toured New England in search of houses about to be demolished and bought up selected elements from each: wood paneling, furniture, wallpaper, colored glass and china. In place of unity, Sleeper created a wildly eclectic but artistically surprising – and satisfying – place to live. The mansion sits on rocks overlooking Gloucester Harbor and has Arts-and-Crafts-style terraces leading down into a series of garden ‘rooms’. The house is in Gloucester, Massachusetts. You can visit the house between June and October, Tuesday to Sunday from 10am to 5pm. The last hourly tour begins at 4pm.

10. Powerscourt, Ireland

Powerscourt is a phoenix house, gutted by fire in the ’70s but now restored to its full Palladian glory. It started out as a 13th-century castle but was remodeled in the 18th century – additions included a stunning double-height Georgian ballroom. The house is set in the Wicklow Mountains amid 47 acres of Italianate gardens with fountains, grottoes, terraces, cascades, fish ponds, a walled garden and a mile-long beech avenue with 2000 trees. Visit the nearby village of Enniskerry, built in 1760 by the Earl of Powerscourt so his laborers would have somewhere to live.

© 2011 Lonely Planet

Popularity: 42%

The Power and Magic of Refinancing

The Power and Magic of Refinancing
Milan Doshi shows you how to recoup your original downpayment within 7 years and use that amount for the downpayment of another property via Refinancing
Posted Date: Oct 15, 2010
By: Milan Doshi

The Power and Magic of Refinancing

Milan Doshi shows you how to recoup your original downpayment within 7 years and use that amount for the downpayment of another property via Refinancing

In chapter 5 of my best-selling book “How You Can Become a Multi-Millionaire Real Estate Investor!”, I wrote on the five types of returns from property investment. There is a sixth and powerful return which I shall aptly call The Power and Magic of Refinancing! Unlike other returns like Rental Yield, Capital Appreciation, etc., it’s not possible to come up with a number or do an “apple-to-apple” comparison against other investments.

One unique feature of property investing is the ability to pull money out every few years via refinancing as the value of property increases due to inflation and the outstanding loans are reduced thanks to the rental income. In this article, I will highlight a simple example where you can take out your original down-payment in 7 years. Thereafter, you own a “zero money down” asset working hard for you that generates infinite returns.

Firstly, Some Assumptions:

Purchase Price = RM100,000 for a low cost apartment which most people can afford
Down-Payment = RM20,000 (20%)

Loan = RM80,000 (80%)
Interest = 5% pa
Tenor = 20 years
(the interest and tenor is on the conservative side as it’s possible today to get loans at BLR – 2.2% pa up to 40 years or age 70)

Yearly Installment = RM6,418 or RM535 per month

Rental = RM600 per month which is enough to pay the monthly installment and service charges.
Hence the Cashflow = Zero every month

Apartment Location: within 15 minutes walking distance to a nearby train station where the occupancy is more than 90%

For simplicity, other costs such as legal fees, stamp duty, etc are ignored

Other Assumptions: Interest rate remains unchanged, no rental increase and price appreciation over 20 years

Take a look at how the loan of RM80,000 reduces over time from the Loan Amortization Table below:

Under the column Total Principal Repaid in blue, take a look at the numbers highlighted in yellow. At the end of year 7, the total principal repaid is around RM20,000 which is the original down-payment amount. It’s possible (subject to the bank’s terms and conditions) to refinance this apartment and increase the loan quantum back to the original amount of RM80,000 and cash-out RM20,000.*

* Note: In reality, as property prices go up over time due to inflation, it’s even possible to refinance to an amount higher than the original loan amount. Alternatively, you can pull-out the RM20,000 in a shorter time, perhaps 5 years instead of 7.

What Happens in this Example is:

1. An investor is able pull out his original down-payment or equity of RM20,000 within 7 years and put it to work somewhere else, preferable on a second property. Thereafter, none of his original money is left in the first property. The first property then becomes a “zero-money down” investment enabling him to enjoy infinite returns.

In fact, he can keep refinancing and pull out RM20,000 every 7 years for the rest of his lifetime. Even after he passes away, the apartment will still be around and his children will be able to withdraw RM20,000 every 7 years for the rest of their lifetime. Human beings will come and go whereas properties will always be around!

2. The investor enjoys a payback period of 7 years on his capital of RM20,000. This is not considered long considering the low risks involved as long as the property is in a good location that has high occupancy. In comparison, the payback period for new restaurants or retail outlets which are considered to be much higher risks is approximately 3 years.

For example, a good friend of mine today owns three franchises of a famous kopi-tiam chain. He told me that his investment in one outlet is approximately RM1 million. Each outlet is able to generate profits of around RM30,000 per month or RM360,000 per year. Within 3 years, he is able to recover his original investment of RM1 million which he then uses to open another outlet. On the surface, the returns and payback period may seem very attractive, but the risks he takes are also very high.

Keep Duplicating

If you are a full time employee, it’s possible for you to replicate my business friend’s success via property investments which entails much lower risk. You can easily recover your down-payment of RM20,000 within 7 years which you can then use for a down-payment on your second property. If you wish, you can then duplicate the formula 7 years later (in year 14) by refinancing the first and second property and pull-out RM40,000 which you then use to purchase two more properties.

An initial down-payment of RM20,000 in one property has enabled you to acquire four properties within 14 years. Another 7 years later or in year 21, you can refinance all four properties, pull out a total of RM80,000 and purchase another four properties! This is the Power and Magic of Refinancing that no other investments can offer!

If you have any comments on this article, please email to me at achievers88@yahoo.com. I would highly recommend that you sign up at our moderated getrichbook egroups at:

http://finance.groups.yahoo.com/group/getrichbook/

It's free for all my book readers and readers of this article. Only relevant emails pertaining to finance, property and stock investments will be approved for broadcast

Article Contributed by
Milan Doshi
Financial Trainer and Best Selling Author of
“How You Can Become a Multi-Millionaire Real Estate Investor!”
For more information, visit www.milandoshi.com

Housing Loan ( Malaysia )

Housing Loans
Introduction
Buying a house is an exciting event. It will probably be the biggest purchase you will ever make in your life. Understanding the steps involved in securing a housing loan will help you save time and avoid uncertainty and anxiety.

This information in the following pages will give you an insight into the various issues on financing a house and outlines the major steps in the overall process of financing a house. It guides you through the basics, explains the technical terms and gives you invaluable tips on financing a house.

Buying a House
Buying a house is a major step, so it deserves careful thought and planning. If you are buying a property under construction, you should check the background of the developer. You should ensure that the developer:
  • Has a valid licence issued by the Ministry of Housing and Local Government which is still in force (not expired)
  • Has a valid advertising and selling permit issued by respective local authority which is still in force
You have the right to enquire from the developer, information on licence and permit. You can also refer to the Ministry of Housing and Local Government for further clarification. A developer with a good track record reduces the risk of the project being abandoned.
What can I Afford?
Before you commit to purchase a property, you should first work out a budget to help you determine how much you can afford and the ceiling price on any property you may wish to buy. As a guide, your monthly commitments on paying instalments for your house, car and other payments should not exceed 1/3 of your gross monthly household income.

Your source of funding can be all or any combination of the following:

  • Savings
  • Withdrawal from Employee Provident Fund (EPF) account
  • Loan facility from a financial institution
Savings
You should have sufficient personal savings to pay for the downpayment and other related costs associated with buying a house. A good estimate would be about 10%-20% of the purchase price as down - payment and another 3%-5% for related costs, such as legal fees and stamp duties.
EPF Savings
You could also withdraw from your Account 2 to make the initial downpayment. Please contact your nearest EPF office to inquire about your withdrawal eligibility.
Choosing your Financial Institution
You should shop around before you decide on any financial institution. Remember that when you take up a housing loan, you will be dealing with the financial institution on a regular basis for a period of time. Therefore, you should also consider factors other than just interest rates. Below are some of the factors you should consider:
  • How professional is the financial institution in dealing with customers?
  • Does it offer quality service in terms of efficiency and reliability?
  • What are the available loan packages and which package suits you best?
  • What are the charges involved?
    For example, legal fees, related government fees and charges, disbursement fees and others. You should also be informed when and how often these charges are to be paid
An innovative financial institution may offer a more suitable loan package that suits your needs and their application process may be faster and hassle-free. It usually takes about one to two weeks for your loan application to be approved from the time you submit all relevant documentation.
Loan Applications: Documents Required
You need to provide the following basic documents before the financial institution can process your loan application:
  • A photocopy of identity card or passport
  • Your latest 3 months' salary slip
  • Your latest income tax return form (Form J) or EA form
  • Sale and Purchase Agreement/deposit or booking receipt/letter of offer from the housing developer
  • A photocopy of the land title (if any)
  • The latest bank statements (compulsory in the absence of salary slips and/or Form J/EA Form) dating back six months/savings passbook/fixed deposits
  • Valuation report for completed houses and/or
  • If you are self-employed, you need to provide your business registration documents, latest 3 months bank statements, latest financial statements and other supporting documents to support your income
However, some financial institutions may require additional supporting documents.

Upon acceptance of the letter of offer, you will need to appoint a lawyer to draw up the loan documentation for you. Normally, you would select your lawyer from a list of panel lawyers provided by your financial institution. Some of these documents need to be submitted to the relevant government authorities for registration and to the Stamp Office for stamping.

Upon completion of the above, these registered documents are then submitted to the financial institution and you will be given a copy of the Loan Agreement. In general, the timeframe for the completion of this legal process should not exceed 6 months.
Fees and Charges
There are also related costs such as professional fees and government charges that you would have to pay. Below are some of the common fees and charges you would expect to incur:

Sales & Purchase Agreement/Tranfer/Financing
First RM150,0001% (minimum fees of RM300)
Next RM850,0000.7%
Next RM2,000,0000.6%
Next RM2,000,0000.5%
Next RM2,500,0000.4%
Excess RM7,500,000negotiable (not exceeding 0.4%)


Please note that the type of charges and the amount charged might change in the future. You should meet with your financial institution's loan officer for further advice and discussion regarding any questions that you may have concerning the type of fees and legal services.
Assesing your Loan Repayment Capacity
A common criterion is that your monthly loan instalment repayment should not be more than 1/3 of your gross monthly household income. If you have savings or fixed deposits, they can be used to support your loan application as financial institutions may take them into account in evaluating your eligibility. Different financial institutions have different criteria in calculating the repayment capacity. In the case of a floating rate loan, you should also note that your monthly repayment may increase substantially when interest rates go up.

For example, when there is an increase in the Base Lending Rate (BLR), the interest rate on your loan will also go up, and your repayment would be higher. However, in most cases, financial institutions would allow you to pay the fixed amount of monthly repayment throughout the loan tenure and would make any adjustment caused by the variation in interest rate by increasing or shortening the loan tenure. You should check this out with your financial institution.
Margin of Financing
The amount of financing provided by a financial institution depends on the market value (for completed properties only) or purchase price of the house, whichever is lower. The margin of financing could go as high as 95% of the value of the house.
It is assessed on factors such as:
  • Type of property
  • Location of property
  • Age of the borrower
  • Income of the borrower
Loan Tenure
The length of a loan can range anytime up to 30 years or until the borrower reaches age 65 (or any other age as determined by the financial institution), whichever is earlier.
Loan Features
Each financial institution packages its housing loans differently. You should examine all the features of a loan package and not just base your decision on any single feature. Pricing is just one consideration; other features like flexible repayment terms could balance the scale or even translate into greater loan savings. Financial institutions generally offer housing loan packages either in the form of a term loan, overdraft, or a combination of a term loan and overdraft.
Common Housing Loan Packages Offered by Financial Institutions
  • Term Loan
    • A facility with regular predetermined monthly instalments. Instalment is fixed for period of time, say 30 years
    • Instalment payment consists of the loan amount plus the interest
  • Overdraft facility
    • A facility with credit line granted based on predetermined limit
    • No fixed monthly instalments as the interest is calculated based on daily outstanding balance
    • Allows flexibility to repay the loan anytime and freedom to re-use the money
    • Interest charged is generally higher than the term loan
  • Term Loan and Overdraft combined
    • A facility that combines Term Loan and Overdraft. For example, 70% as term loan and 30% as Overdraft
    • Regular loan instalment on the term loan portion is required
    • Flexibility on the repayment of overdraft portion
Daily Rests VS Monthly Rests
Financial institutions may charge you interest either on daily rests or monthly rests depending upon the products offered. In the case of daily rests, the loan interest is calculated on a daily basis, while in the case of monthly rests, interest is calculated once a month based on the previous month's balance. Under both types of loan, the principal sum immediately reduces every time a loan instalment is made.
Graduated Payment Scheme
A graduated payment scheme allows lower instalment payments at the beginning of the loan but this will gradually increase over time. This type of payment scheme will help house buyers to reduce burden of loan repayment for the first few years and allow them to allocate more money for other purposes. Over time, as earnings of house buyers increase, their repayment capabilities will also increase thus allowing higher repayment instalments at a later stage.

A graduated payment scheme is also suitable for a house buyer who wishes to purchase a more expensive house but is restricted by his/her repayment capability during the initial years.
Prepayment Flexibility
Different financial institutions may have different terms and conditions imposed on prepayments. Check the loan package to see if it allows you the flexibility to make prepayments or extra payments. Flexibility to make prepayments and paying interest on a daily rest basis, may help save considerable interest charges. It is also possible to start repayment of the loan during the construction of the house, thus saving more interest charges. What is important is to make prompt monthly repayments.
Partial Prepayment of the Outstanding Loan
Many borrowers find it useful to shorten the loan tenure by making partial prepayments with surplus savings or annual bonus. Partial prepayments can be in any amount. However, some financial institutions may impose restrictions on the amount to be pre-paid while others may impose a penalty. It is extremely effective in reducing the interest charges you would have to pay if prepayments are made during the early years.
Early Termination Penalty
Financial institutions may impose a penalty on full repayment of loan. Generally, the penalty imposed can either be a flat rate or an 'x' number of months' of interest (e.g. 1 month's interest). This is because when a loan is granted for a certain term, the financial institution would expect the loan to be repaid over the period agreed and has planned their cash flow on this basis. An early termination of the loan would therefore disrupt the financial institution's cash flow planning. As such, some financial institutions do not charge a penalty if sufficient notice is given (as stated in the terms and conditions of the loan) or if the settlement is made after the required minimum period to maintain the loan with the financial institution has passed.
Documentation
The primary documentation involved in applying for a housing loan is the loan agreement.

A Loan Agreement is a contract signed between the buyer and the financial institution. A Loan Agreement contains major provisions such as the terms of the loan, principal sum of the loan, interest rates, default interest rate, penalty charges and repayment terms. It also sets out the duties of borrower and the lender and in the event of default, the rights and remedies of each party.

The other common legal documents that you may need to sign are Deed of Assignments, Charge documents and Power of Attorney.

Remember that throughout the tenure of the loan, your property is charged to the financial institution (i.e. the financial institution has a claim over your property). Whether you are buying a completed property or a property under construction, you should obtain an explanation from the attending lawyer on the major clauses of the agreement and the implications of each clause.
Valuation Report
This documentation may be required if you purchase a fully completed property from a houseowner. The financial institution will appoint a property valuer from its panel of valuers to appraise the property. The valuation fee for this service starts from a few hundred ringgit upwards, depending on the value of the property and you will be charged for this service.
Insurance
It is extremely important to take insurance coverage when you purchase a house. The most important factor is that it gives you and your loved ones peace of mind, in the form of financial security if an unfortunate event should occur.
There are two important insurances to consider:
  • The House Owner/Fire Insurance policy
    This policy provides coverage for your property against natural disasters such as flood, fire, riot, strike and malicious damage. For properties with strata titles such as apartments or condominiums, you need not buy the insurance because the Management Corporation (MC) would have taken up insurance on the entire building. You should ensure that you obtain the sub-certificate of the Master Policy issued by the insurance company from the MC and present it to the financial institution. This is necessary so that the financial institution is aware that the property has been insured and will not buy another fire insurance on your property. In such a case, you will be required to assign your rights under the policy to the financial institution.
  • The Mortgage Life Assurance or MRTA
    This type of policy provides for full settlement of the outstanding balance of the housing loan with the financial institution, in the event of total permanent disability or death of the borrower. Premiums can usually be included in the loan amount, and the repayment period of the premium is usually spread over the loan tenure. The premium is only incurred once. There are no monthly or yearly premiums to be paid. In the event of early termination of housing loan, you will generally have the option to request for a refund of the premium for the balance of the unexpired period or to continue the insurance coverage.
Financial institutions have their own panel of insurers and most of them can arrange insurance on your behalf with the annual premium charged to your loan account.
Loan Disbursement
The financial institution disburses (pays out) the loan once it has received advice from its lawyer that the legal process has been completed and the loan documents are in order. At this time you will be informed of the date and amount of the first instalment you have to make.
Rights and Duties of the Borrower and Financial Institution
Both borrower and financial institution have certain rights and duties during the course of the loan. Some of the more important ones include:

RIGHTS
  1. Borrower
    • Right to have access to all information that would affect your borrowing decision
    • Right to be treated professionally, courteously and without prejudice
    • Right to be consulted on changes to the terms and conditions of your loan
    • Right to have accurate information on a regular basis on your loan account
    • Right to enforce legal action in the event of a breach of contract

  2. Financial Institution
    • Right to have full relevant disclosure of information on borrower's credit standing
    • Right to correct and truthful information on the borrower
    • Right to timely repayment of interest/ instalments of the loan
    • Right to enforce legal action in the event of default/breach of contract
DUTIES
  1. Borrower
    • Duty to read and understand all terms and conditions of the loan
    • Duty to observe the terms and conditions of the loan at all times
    • Duty to enquire and get clarification on all aspects of the loan to their satisfaction
    • Duty to make prompt payment on the fees, charges, interest and instalment of the loan

  2. Financial Institution
    • Duty to discharge borrowers' obligations as described in the loan agreement
    • Duty to consult borrowers on any changes made to the terms and condition, fees charged and other relevant information
    • Duty to attend to all queries made by borrower
A Loan Officer can provide invaluable assistance, and clarify issues which you are unsure. Take the time to discuss your housing loan questions with a loan officer at length so that you can choose a loan facility that best suits your needs.
Source by:



Home Loan Frequently Asked Questions

Home Loan Frequently Asked Questions
What can I afford
Before you commit to purchase a property, you should first work out a budget to help you determine how much you can afford and the ceiling price on any property you may wish to buy. As a guide, your monthly commitments on paying instalments for your house, car and other payments should not exceed 1/3 of your gross monthly household income.

Your source of funding can be all or any combination of the following:
  1. Savings
  2. Withdrawal from Employee Provident Fund (EPF) account
  3. Loan facility from a financial institution
Choosing your Financial Institution
You should shop around before you decide on any financial institution. Remember that when you take up a housing loan, you will be dealing with the financial institution on a regular basis for a period of time. Therefore, you should also consider factors other than just interest rates. Below are some of the factors you should consider:
  • How professional is the financial institution in dealing with customers?
  • Does it offer quality service in terms of efficiency and reliability?
  • What are the available loan packages and which package suits you best?
  • What are the charges involved?
    For example, legal fees, related government fees and charges, disbursement fees and others. You should also be informed when and how often these charges are to be paid
An innovative financial institution may offer a more suitable loan package that suits your needs and their application process may be faster and hassle-free. It usually takes about one to two weeks for your loan application to be approved from the time you submit all relevant documentation.
Loan Applications: Documents Required
You should shop around before you decide on any financial institution. Remember that when you take up a housing loan, you will be dealing with the financial institution on a regular basis for a period of time. Therefore, you should also consider factors other than just interest rates. Below are some of the factors you should consider:
  • How professional is the financial institution in dealing with customers?
  • Does it offer quality service in terms of efficiency and reliability?
  • What are the available loan packages and which package suits you best?
  • What are the charges involved?
    For example, legal fees, related government fees and charges, disbursement fees and others. You should also be informed when and how often these charges are to be paid
An innovative financial institution may offer a more suitable loan package that suits your needs and their application process may be faster and hassle-free. It usually takes about one to two weeks for your loan application to be approved from the time you submit all relevant documentation.
Fees and Charges
There are also related costs such as professional fees and government charges that you would have to pay. Below are some of the common fees and charges you would expect to incur:



Please note that the type of charges and the amount charged might change in the future. You should meet with your financial institution's loan officer for further advice and discussion regarding any questions that you may have concerning the type of fees and legal services
Assesing your loan repayment capacity
A common criterion is that your monthly loan instalment repayment should not be more than 1/3 of your gross monthly household income. If you have savings or fixed deposits, they can be used to support your loan application as financial institutions may take them into account in evaluating your eligibility. Different financial institutions have different criteria in calculating the repayment capacity. In the case of a floating rate loan, you should also note that your monthly repayment may increase substantially when interest rates go up.

For example, when there is an increase in the Base Lending Rate (BLR), the interest rate on your loan will also go up, and your repayment would be higher. However, in most cases, financial institutions would allow you to pay the fixed amount of monthly repayment throughout the loan tenure and would make any adjustment caused by the variation in interest rate by increasing or shortening the loan tenure. You should check this out with your financial institution.
Margin of financing
The amount of financing provided by a financial institution depends on the market value (for completed properties only) or purchase price of the house, whichever is lower. The margin of financing could go as high as 95% of the value of the house.
It is assessed on factors such as:
  • Type of property
  • Location of property
  • Age of the borrower
  • Income of the borrower
Loan Tenure
The length of a loan can range anytime up to 30 years or until the borrower reaches age 65 (or any other age as determined by the financial institution), whichever is earlier.
Common housing loan packages offerd by financial institusions
  1. Term Loan
    • A facility with regular predetermined monthly instalments. Instalment is fixed for period of time, say 30 years
    • Instalment payment consists of the loan amount plus the interest

  2. Overdraft facility
    • A facility with credit line granted based on predetermined limit
    • No fixed monthly instalments as the interest is calculated based on daily outstanding balance
    • Allows flexibility to repay the loan anytime and freedom to re-use the money
    • Interest charged is generally higher than the term loan

  3. Term Loan and Overdraft combined
    • A facility that combines Term Loan and Overdraft. For example, 70% as term loan and 30% as Overdraft
    • Regular loan instalment on the term loan portion is required
    • Flexibility on the repayment of overdraft portion
Daily rests vs monthly rests
Financial institutions may charge you interest either on daily rests or monthly rests depending upon the products offered. In the case of daily rests, the loan interest is calculated on a daily basis, while in the case of monthly rests, interest is calculated once a month based on the previous month's balance. Under both types of loan, the principal sum immediately reduces every time a loan instalment is made.
Graduated payment scheme
A graduated payment scheme allows lower instalment payments at the beginning of the loan but this will gradually increase over time. This type of payment scheme will help house buyers to reduce burden of loan repayment for the first few years and allow them to allocate more money for other purposes. Over time, as earnings of house buyers increase, their repayment capabilities will also increase thus allowing higher repayment instalments at a later stage.

A graduated payment scheme is also suitable for a house buyer who wishes to purchase a more expensive house but is restricted by his/her repayment capability during the initial years.
Prepayment flexibility
Different financial institutions may have different terms and conditions imposed on prepayments. Check the loan package to see if it allows you the flexibility to make prepayments or extra payments. Flexibility to make prepayments and paying interest on a daily rest basis, may help save considerable interest charges. It is also possible to start repayment of the loan during the construction of the house, thus saving more interest charges. What is important is to make prompt monthly repayments.
Partial prepayment of the outstanding loan
Many borrowers find it useful to shorten the loan tenure by making partial prepayments with surplus savings or annual bonus. Partial prepayments can be in any amount. However, some financial institutions may impose restrictions on the amount to be pre-paid while others may impose a penalty. It is extremely effective in reducing the interest charges you would have to pay if prepayments are made during the early years.
Early termination penalty
Financial institutions may impose a penalty on full repayment of loan. Generally, the penalty imposed can either be a flat rate or an 'x' number of months' of interest (e.g. 1 month's interest). This is because when a loan is granted for a certain term, the financial institution would expect the loan to be repaid over the period agreed and has planned their cash flow on this basis. An early termination of the loan would therefore disrupt the financial institution's cash flow planning. As such, some financial institutions do not charge a penalty if sufficient notice is given (as stated in the terms and conditions of the loan) or if the settlement is made after the required minimum period to maintain the loan with the financial institution has passed.
Documentation
The primary documentation involved in applying for a housing loan is the loan agreement.

A Loan Agreement is a contract signed between the buyer and the financial institution. A Loan Agreement contains major provisions such as the terms of the loan, principal sum of the loan, interest rates, default interest rate, penalty charges and repayment terms. It also sets out the duties of borrower and the lender and in the event of default, the rights and remedies of each party.

The other common legal documents that you may need to sign are Deed of Assignments, Charge documents and Power of Attorney.

Remember that throughout the tenure of the loan, your property is charged to the financial institution (i.e. the financial institution has a claim over your property). Whether you are buying a completed property or a property under construction, you should obtain an explanation from the attending lawyer on the major clauses of the agreement and the implications of each clause.
Valuation report
This documentation may be required if you purchase a fully completed property from a houseowner. The financial institution will appoint a property valuer from its panel of valuers to appraise the property. The valuation fee for this service starts from a few hundred ringgit upwards, depending on the value of the property and you will be charged for this service.
Insurance
It is extremely important to take insurance coverage when you purchase a house. The most important factor is that it gives you and your loved ones peace of mind, in the form of financial security if an unfortunate event should occur.

There are two important insurances to consider:
  • The House Owner/Fire Insurance policy
    This policy provides coverage for your property against natural disasters such as flood, fire, riot, strike and malicious damage. For properties with strata titles such as apartments or condominiums, you need not buy the insurance because the Management Corporation (MC) would have taken up insurance on the entire building. You should ensure that you obtain the sub-certificate of the Master Policy issued by the insurance company from the MC and present it to the financial institution. This is necessary so that the financial institution is aware that the property has been insured and will not buy another fire insurance on your property. In such a case, you will be required to assign your rights under the policy to the financial institution.

  • The Mortgage Life Assurance or MRTA
    This type of policy provides for full settlement of the outstanding balance of the housing loan with the financial institution, in the event of total permanent disability or death of the borrower. Premiums can usually be included in the loan amount, and the repayment period of the premium is usually spread over the loan tenure. The premium is only incurred once. There are no monthly or yearly premiums to be paid. In the event of early termination of housing loan, you will generally have the option to request for a refund of the premium for the balance of the unexpired period or to continue the insurance coverage.
Financial institutions have their own panel of insurers and most of them can arrange insurance on your behalf with the annual premium charged to your loan account.
Loan disbursement
The financial institution disburses (pays out) the loan once it has received advice from its lawyer that the legal process has been completed and the loan documents are in order. At this time you will be informed of the date and amount of the first instalment you have to make.
Rights and duties of the borrower and financial institution
Both borrower and financial institution have certain rights and duties during the course of the loan. Some of the more important ones include:

RIGHTS
  1. Borrower
    • Right to have access to all information that would affect your borrowing decision
    • Right to be treated professionally, courteously and without prejudice
    • Right to be consulted on changes to the terms and conditions of your loan
    • Right to have accurate information on a regular basis on your loan account
    • Right to enforce legal action in the event of a breach of contract

  2. Financial Institution
    • Right to have full relevant disclosure of information on borrower's credit standing
    • Right to correct and truthful information on the borrower
    • Right to timely repayment of interest/ instalments of the loan
    • Right to enforce legal action in the event of default/breach of contract
DUTIES
  1. Borrower
    • Duty to read and understand all terms and conditions of the loan
    • Duty to observe the terms and conditions of the loan at all times
    • Duty to enquire and get clarification on all aspects of the loan to their satisfaction
    • Duty to make prompt payment on the fees, charges, interest and instalment of the loan

  2. Financial Institution
    • Duty to discharge borrowers' obligations as described in the loan agreement
    • Duty to consult borrowers on any changes made to the terms and condition, fees charged and other relevant information
    • Duty to attend to all queries made by borrower
A Loan Officer can provide invaluable assistance, and clarify issues which you are unsure. Take the time to discuss your housing loan questions with a loan officer at length so that you can choose a loan facility that best suits your needs.
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Bank Loan Contact in Malaysia

Local Bank Telephone
ABN AMRO Bank 603-2169 4672
Affin Bank Bhd 603-2055 9898
Affin Islamic Bank Berhad 603-2055 9000
AIA CO LTD
Al Rajhi Bank 603-6204 3350 / 1 300 82 6000
Alliance Bank Bhd 1 800 38 3123
AMBank Bhd 603-2612 6888
AMFinance Bhd 03-2612 6888
Asian Finance Bank
Bangkok Bank
Bank Islam (M) Bhd 603-2690 0900
Bank Kerjasama Rakyat
Bank Muamalat 603-2697 7077
Bank Of China
Bank Of Nova Scotia 603-2148 1881
Bank Simpanan Nasional 03-2162 3222
CIMB Bank Bhd
CIMB Islamic Bank Bhd
Citibank (M) Bhd 603-2383 8800
EON Bank 603-2771 8860
Hong Leong Bank 03-7980 7843
HSBC Bank 603-2050 7878
ING Insurance Bhd 1 800 88 0303
Lloyds TSB Asia
Malaysia Building Society Bhd
Malaysian Assurance Alliance Bhd
Maybank 603-2074 7776
OCBC Bank 1 300 88 5000
Public Bank Berhad 603-2176 7021
RHB Bank 603-9206 8118
RHB Islamic Bank Bhd
Southern Bank 603-2071 7118
Standard Chartered Bank 603-7720 4033
United Overseas Bank 603-2772 6658