All about Home Loan (HL)
Some of you have raised topics on homeloans, interesting package, lock-down/ lock-in period, refinancing, etc.
Purchaser Calvin leong has shared some useful tips on getting the right bank for a suitable package here. Some of you like Ewyong, Sim, wayloon, and perrin share your homeloan experience too. Thanks to you guys.
I find it useful to all other purchasers and potential buyers as a reference. Let me recap what they have shared:-
Calvin Leong said:-
- “As one of the early buyers, my interest is relatively higher compared to what is offered now (-2.2 at least offered by EON). I heard from relative that you could write in to have the bank revise it even before the 5 year lockdown period. I haven’t bothered coz the bank haven’t completely writedown the loan amount. In fact what I am looking for is changing my plan to a flexi mode. It would be great if anyone would be able to share their experience with their bankers.”
- “Usually bank will lockdown your HL for ~5 years. If you break it, you pay the penalty (usually 2-3% of the loan). After 5 years, you can shop for another bank to “refinance” your property and you can probably ask for the market price (not sure if the bank will actually call a realer to rate the market price). The HL these days are now most ZEC.I have plans to restructure my HL to a flexi pay so that I could have the money easily. My rates now are alot higher than what the market is offering but if it means restarting my lockdown period, it is not worth the effort.”
- “I don’t think it is worth while paying the penalty coz 2-3% is a lot of money and I only need to hold on to another 1 year before the lockdown period is over.”
- “I have a few formulas for HL. If you seek the lowest interest rates, look for the smaller banks. EON and Alliance have very good offers. EON advertise -2.3 at one point (whole tenure).I don’t like internationals banks. They are not really competitive.If you opt for fix rate, I doubt you can get good rate.After that look for convenience. Going bank every month can be quite a hassle.
- “Get flexi if possible if you’re planning long. Don’t under estimate how much you can save by holding off your Credit Card bills before the last day.”
- “Don’t forget that you can negotiate with your banker to counter-offer your rate.”
Ewyong said:-
- ” I am on HSBC HomeLoan. I have actually started the installment since last year because based on the agreement that I signed with them, the installment will start no matter what after 3 years. I did not realize that until the bank inform me because the as usual, these clause are written so small and you won’t notice until you face them.”
- “Anyway, about revising, you should try to write to the bank and request for that. My wife and I manage to request for revision but it is still not as good as those that is in the market now because the rate that we sign for was during 2005 time.”
Sim said:-
- “We signed our bank loan agreement somewhere in 2005 with BLR +0.25% but I managed to get interest revision after official write-in early of this year to the bank (CIMB). Now my rate is BLR -1.5% without switching to another bank.Not the best but still good deal for us without paying penalty.”
- “You may also write -in to request full monthly installment as mentioned by Ewyong to reduce the principal. With the full installment, next step is withdrawal money from EPF. Now I still waiting my bank statement for the EPF withdrawal application.”
- “For me, they “restart” the lockdown period, another 5 years.”
- “Refinancing will save a lots in long-term even we pay the penalty. If you plan to settle the loan faster(ie ,5-7 years), the saving will be reduced. So, it soley depends your plan.”
- “You can roughly evaluate the package using Excel. I will opt for the flexi loan package if available during 2005…”
wayloon said:-
- “I’m using semi-flexi from public bank. that banker telling me if wanted to start house installment, i need to straight pay the amount for the installment only. there is no anything or registration require.”
perrin said:-
- “i’ve called up several banks today
ambank –> blr – 2.00%
uob –> blr – 2.00% (for the first 5 yrs) and blr – 2.40% (from the 6th yrs onwards)
ocbc –> a bit lupa, but macam blr – 2.20%
public bank –> also a bit lupa, but macam blr – 2.15%” - “the sales agent told me if i were to get international bank, there are more changes that they have to do (which they should, since i’m buying a property from them!) and hinted that i might have to pay the lawyer fees for S&P.”
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Hi Sam,
Thanks for the new thread. It could be good for the new buyers who are seeking bankers and they can counter-offer against each other for the best deals.
It is even better for those who are (going)hunting for refinancing. Refinance have a better deal compared to UC because the banks gets to earn full installment interest instead of progressive.
On the market, I am quite sure you can easily get a -2.2% for a 300k HL deal (ZEC). EON have -2.3 (as advertise)
What I want to know is how low anyone got on a flexi plan.
There is one more trick you can pull on your banker, get the lowest (probably EON bank can do that) and ask the bank you preferred (probably PBB, Maybank and CIMB becoz they have branches all around) to counter the offer.
It’s good if any of you and post some templates of Official Letter about Interest Revision, Start Installment instead of Progressive Interest, Refinancing…..
This will be a good help for some ppl who r dumb when writting letters….juz like me… :P
hi guys. i’m new to this site. Would love to get a template of rates revision letter from you guys.
I’ve bought the house in end 2006.
The rates that I got from OCBC was
BLR – 1% for 1st 10years
BLR – 1.3% for subsequent years.
Mine is EON bank with -1.6% for 2-3 years and -1.8% for subsequent years.
I would advise you all to start paying installment now instead of servicing the bank interest though the house is still incomplete pending CF application and handover.
The CF and handover are imminent now, unless Bayan Villa really want to abandon it now, but very remote possibility.
This would probably be a bad advice now since BI is almost complete, but just to share my experience with paying principal in advance.
1) You have to write in to tell your banker you are paying advance or it will just be there without lowering the interest.
2) (This only apply to my contract & Bank). I cannot withdraw the money UNTIL the bank completely drawdown the loan amount. Kinda sucks if I needed the money.
Dear all,
If you have done your evaluation and found that savings from refinancing cannot compensate the penalty (if) and the lock-in period still far away from now, then we may consider to request interest revision from existing finance institution.
My first request in early 2008 rejected because the progress of the construction does not seem good. To increase chance to get the interest rate revision, I adapt another banker advice to write a simple letter to request start repayment (full installment) even BI under construction. Different financial institutions may have different T&C imposed on prepayments; some allow extra / flexible repayment without notice. So, you can check them further if any notice needed.
If your bank need letter, below is the simple example for your reference. I also dump to write letter: p
________________________
RE: REQUEST HOUSING LOAN INTEREST RATE REDUCTION. Account no : XXXXXXXXX
Refer to the above matter, we would like to request interest rate reduction for our house loan which we signed in April, 2005 with below rate, non- zero moving cost.
1st year : 0%
2nd year : BLR – 1%
3rd year and thereafter : BLR + 0.25%
2. Compare to current market rate offer ranging from BLR-2.2% to BLR 2.4%, the reasonable rate 4 years ago now seems extremely uncompetitive.
3. As a long-term customer with xxxx bank, we opt to remain relationship with XXXX if you can offer us better package on flexi payment mode. We also have been proven as a good pay master since we commenced our repayment.
Hope to get the best package from you sooner possible or we will are regret to consider refinancing with other financial institutions.
Yours faithfully,
_________________________________
Thanks a bunch Sim! I have already copied the sample letter. Save me the headache of cooking-up with my own wording.
Hello all, thanks for sharing your home loan experience. I believe the other purchasers can get a better offer after reading this thread.
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