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Things to Be Considered Before You Buy Home Loan

Things to Be Considered Before You Buy Home Loan

You can address a lot of people that would like to buy a home, but we cannot say that, all they have enough money to buy the home. If you earn a stable monthly income, you can buy a home with home loan. Here is the home loan guide for you to decide which loan is appropriate for your needs.

  • Choose Your Property

The banks and financial institutes will lend you money according to the market value of the property which you have chosen to buy. You should possess the following things when you apply for a home loan.

Buy a Sub-sale Property– You should pay 3% booking amount to the seller to get the receipt and you should handover this receipt to the bank to make the down payment.

Buy from the Developer– You should submit the booking fee receipt given by the developer to the bank while making down payment.

  • Study the Types of Home Loans

You have different types of home loans to choose from, which include government housing loan, refinancing, Islamic loan, overdraft, flexi loan, term loan and semi flexi loan. Among that, you should choose the home loan according to your income.

  • Types of Interest Rates

Banks offer home loans with two types of interest rate, which are,

Fixed RateThe rate of interest will be same all through the loan period.

Variable Rate– The rate of interest will vary according to the base lending rate.

  • Finance Margin

Banks stipulate finance margin from 80% to 95% on the property value. The finance margin will include the expenses of all such a mortgage level term assurance premium or mortgage reducing term assurance.

  • Early Statement

At times, you may want to settle the loan amount before your loan period. In such cases, the banks will ask you early penalty statement as they lose their income in the form of interest. Refinancing your home loan is also reckoned to be the form of early statement.

  • Stamp Duty and Legal Charges

A home loan includes charges,

  • Loan agreement fees—1% of the first RM150,000 + 0.7% of the remaining loan value under RM1 million.
  • Stamp duty—0.5% of the loan amount.
  • Legal disbursement charges.
  • Government tax on legal fees.

If a bank specifies zero moving cost, then the bank will handle all these charges.

  • Apply for Home Loan

You can apply for the home loan either online or offline.

Online Mode – visit the website of the bank or a Loan provider site, you can also refer to Home loan comparison sites. Compare different Home loan Schemes available, Check your Eligibility, fill the loan application form and submit the necessary documents.

Offline Mode – Visit the bank with necessary documents and fill and handover the loan application form with mandatory details.

  • Approval Period

You should wait for 2 to 7 working days for knowing whether or not your loan has been approved by the bank. If your loan is approved, the bank will contact you to let you know about the interest rate, approved amount and loan period. Mostly, the banks will approve your loan amount based on your credit score and personal details.

 

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