PROPERTY - FINANCING / REFINANCING
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Following are some factors that you may consider when evaluating various sources of finance: |
FINANCIERS Monthly Installment Calculator
DOCUMENTS REQUIRED Documents required (Individual) Copy of NRIC (back and front) Letter of Offer (if signed) Sale and Purchase Agrement Quit Rent & Assessment Receipts Documents required (Company) M&A Director's Resolution for Loan Forms 9, 11, 24, 49 Information required Financier and Contact Person Title Details (if copy not available) Copy of Certificate of Fitness for Occupation Construction Loan Architect's Quotation Building Plans
INFORMATION . Financing Considering Options Rates of Interest Fixed / Floating Rate Margin of Financing Early Redemption / Exit Penalties Redrawal Facility Credit Evaluation Types of Facilities Term Loan Overdraft Construction / Renovation Loan BG, BA, LC, etc. (Corporate) Refinancing Existing / Another financier Penalties for redemption / settlement Property Valuation New / Subsale Property Bank Panel Valuers to conduct Accepting Offer Letter of Offer Terms and Conditions understood Financier Instructs Solicitor Loan / Facilities Agreement Signing Agreement Conditions Precedent Pre-Disbursement Conditions Opening of Accounts Insurance (if any, eg MRTA) Any other Payments Release Solicitor Advises Release Payment by Financier Post Release Servicing Loan Ensuring all insurance, quit rent and assessment paid |
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Selecting your Financier The following are points which you may consider when selecting your financier: - Rates of Interest (short and long term rates, and whether rates are floating (pegged to Base Lending Rate) or fixed, whether interest is charged on daily or monthly rest basis) - Lock-in Period and penalty (during which period you would be charged a penalty for early redemption / settlement / refinancing) - Types of Facilities required (Term loan / Overdraft / Construction Loan / other business & commercial facilities) - Whether financier has existing records of your daily transactions (this will save time and effort in compiling financial information) - Requirement to purchase MRTA or other types of insurance - Redrawal facility and charges (for term loan) - Whether processing fee and valuation fees are chargeable Refinancing Before refinancing your existing loan, you should consider the following: - The penalties for exiting (early redemption / settlement of) your current loan - Whether your new financier will cover moving costs (penalty, stamp duty, legal fees) - All pre-disbursement conditions in your new letter of offer, and whether all conditions can be fulfilled - Additionally, all factors you would otherwise consider if you were getting a new loan. Property Valuation For property purchases otherwise than from developer, you should obtain from an accredited valuer (preferably one which is on the panel of valuers of your financier) an approximate market value of your property. The loan amount to be approved (subject to proof of income) will be a function of the margin of financing and market value of your property. Financier's Letter of Offer Upon approval of the financial institution offering you the loan, you should receive a letter of offer, returnable to them signed within a certain period of time stipulated in the offer. Loan / Facilities Agreement After you accept the letter of offer, your financier will contact its panel of solicitors, who will commence preparation of the loan / facilities agreement and proceed with other loan documentation that would secure the financier's interest in your property. Very often, your financier will allow you to nominate the law firm to prepare the loan documentation on behalf of the financier. Release of Loan Sum Once the interest of your financier is secure, and all pre-disbursement conditions are satisfied, the financier's solicitors will advise your financier to release the loan sum according to the letter of offer, and/or other relevant agreement.
Take time to have a look at bankinginfo, which contains educational information provided by the Central Bank of Malaysia and The Asociation of Banks in Malaysia.
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