Malaysia Financial Blogger | Financial Freedom Ideas | imDavidLee.Com

Understand the Lock in Period for Your Home Loan

When you are applying mortgage to finance your house, I urge you to take some time to read every words in the offer letter and ask questions for thorough explanations from banker before you sign it. One thing you should aware of is the lock-in period. It’s the period when you do an early settlement of your loan in full for the first few years of your loan tenure; the lender can impose an exit penalty charge which ranges from 2-3% of the principal loan amount.

For instance, if your principal loan amount is RM300,000, when you choose to settle the loan or refinance it to other bank, the amount you need to pay for penalty is:

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Calculate How Much Interest You Can Save By Refinancing

I have created a mortgage refinance calculator that will help you to find out how much interest you can save if you refinance your housing loan.

Click here to calculate.

Refinancing a housing loan provides some significant benefits to many owners. With the lower interest rate, owners are able to reduce their monthly mortgage payments. It will results in significant savings over the loan term.

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Why Do We Need Mortgage Refinancing?

There’re a lot of reasons for you to refinance your home loan. Most of the people do refinancing is to reduce their monthly repayments; some might want to consolidate their outstanding balance; and some just want to quit from the current mortgage that’s costing them too much.

One of the reasons that I like the most is to save money. It can be achieved by:

• Getting a lower interest rate to reduce the monthly mortgage payment. It can increase your cash flow, so you will have more money available to do other things.

• Cash out money for debt consolidating, house renovation or child education. Besides that, the money also can be used for investment purpose as the housing loan interest rates lower than personal loans or credit card cash advances.

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Planning is the Key to Dream House

Today, our lifestyle is much more different than our parent’s era. Most people will now look towards aesthetic and stylish design house to suit their lifestyle preferences. Often, it can also burn a hole in our pocket.

However, you must ask yourself whether your budget is sufficient for such living? We must plan for some funds to make the dream comes true. Before getting any results, it’s good to have proper planning. It is a process when you would make your decisions, taking into account how you are living your life at that moment.

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My Investing Strategy for 2012

Although the market outlook is uncertain due to the European debt crisis but I will also plan to make minimal stock investments. I will only invest my savings in high yield dividend stocks when the market plunges. I think property is the best hedge against inflation. Therefore, I will invest in a medium cost apartment soon. Besides, gold is another option to preserve our money and diversify our portfolio. It would be great if you can plan to allocate some funds for gold of 20g to 50g.

My recent strategy is to invest for income and capital preservation in view of the market volatility. For my unit trust investment, I will try to diversify by allocating one third of my portfolio into medium term aggressive fund. Meanwhile, for my stock portfolio, I will try to minimize my risk by investing in defensive counters which also provide dividends consistently.

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