Tag Archives: Home Loan

Calculate How Much Interest You Can Save By Refinancing

refinancing-mortgage

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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Taking a Loan Before Retiring

For retirees, it is best to live with cash. Wherever possible, try to pay with cash. Normally, a loan is taken to finance something that you cannot afford. So, for the retirees who do not have a steady income should avoid this kind of situation.

Sometimes, unforeseen events or emergencies may compel you to borrow. For example, an offspring may encounter financial problems and most of the parent may find it difficult to support. Or may be you start a business or invest in properties. It’s not surprising to find them applying for business or personal loans to finance their desire path. Apart from that, they might need to get housing loans from bank if they are quite active in the property market which encourages them perform buy and sell.

housing_loan

Most of the retiree nowadays will take loans to buy new cars or refinance their homes. Some of them may prefer to get a loan when purchasing big ticket items although they can afford them. This is because they think that they will be audited by the Lembaga Hasil Dalam Negeri (LHDN) if the items are paid in cash.

Generally, financial institutions deny loans to those who are not earning an income. Here are few tips to increase your chances of getting a loan before retirement age:

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Budget 2011: 100% Housing Loan For First Home Buyers

Great news for first time home buyers! For those incomes below RM3000 no need to make 10% down payment on house purchased as they can obtain 100% full loan. It brings more benefits to those low income group and fresh graduates who face difficulties in buying their house.

my first house scheme

Under this My First House Scheme (Skim Rumah Pertamaku), the 10% down payment will be guaranteed by Cagamas Bhd for houses purchased below RM220,000.

Another good news is house buyer will enjoy 50% on stamp duty exemption for house priced below RM350k. So, basically our government increase it from RM250k-350k. Refer to my previous article 50% Stamp Duty Waiver For House Purchased. However, I’m not sure whether this initiative will speed up the bursting of the housing bubble or not, so we will see.

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Difference Between Housing and Car Loan Interest Calculation

I believe still many people do not know how the housing loan and car loan interest are calculated differently.

car loan

Car loan is not like housing loan. Car loan interest is calculated based on the total amount of loan that you have and the interest is fixed. So, car loan is flat and if you settle the loan payment early, you still have to pay the interest for the rest of the agreed loan tenure.

My Personal Advice:

Do not take car loan for longer period. If you can’t afford the monthly payment due to the short tenure, then try to work backwards and set a target of shorter loan period, and save up a sum of money so that you can put a bigger downpayment. In the end, you’ll save a lot of money in the long run.

Imagine: if you loan 40k, 40k x 3.75 %(9 years loan interest) = RM1500. So, your final interest would be RM13,500.

Let say if you put in a bigger downpayment 20k, 20k x 3.5%(5 years loan interest) = RM700. So your final loan interest would be RM3500 only.

That’s saving of RM13k++, not to mention paying a car loan for 9 years is just so ridiculous…I can see most of the people will start cursing after 3-5 years time that they still have to pay the bank another 4 years when their car value is less than half the original value.

Car is a liability not an asset. But if you invest in properties, the price might goes up 10 years later.

For me, with less commitment on a car, then your money can be put elsewhere in other investment vehicles to make the money grows. This is the reason why I don’t think of buying a fancy car at this moment.

How About Housing Loan?

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