Financing is an inevitable aspect of your property buying process. Whether you’re buying your first property or upgrading to a bigger home, there are many factors to consider, such as downpayment, margin of finance, rates, tenure and instalments. Explore every option to find the best financial solution to suit your individual goals before you commit yourself to a financing package for the long run.
In Malaysia, most banks and financial institutions offer a margin of finance of up to 90% of the property’s price for your first two residential properties. If you are eligible for a margin of finance of 90%, you will still need to pay for the remaining 10% of the property’s price. This amount is paid upfront by buyers, usually with their savings, together with other entry costs including legal fees, stamp duties and valuations.
Here are three options to consider to help you finance your home:
Unless you have the financial muscle to buy a property with cash upfront, a home loan is your next best option to finance your purchase. A variety of loan packages are available to cater to the individual needs of buyers, so ensure that you compare rates, features, fees and charges in addition to the type and quality of services offered by each financial institution.
If you’ve been working for more than a few years, you would have accumulated a small amount of funds in EPF (Employees Provident Fund) that you can withdraw from your Account 2 savings to finance the purchase of a house. Withdrawals made can be used to purchase a house or to reduce or redeem a housing loan.
Malaysia My First Home Scheme
An initiative by the Malaysian Government to assist young adults to own their first home, the Malaysia My First Home Scheme allows buyers earning RM5,000 per month or less to obtain 100% financing from financial institutions, enabling them to own their first home without the need to pay a 10% downpayment.
This is an excerpt from the A To Z Property Buying Guide by iProperty.com, to be published in December 2015. Keep a look out for more sneak previews on iProperty.com.my.