TAKING a bank loan to purchase a house may sound simple theoretically. At this moment, it is quite common to hear that the loan rejection rate is 50 per cent.
Property developers can vouch for it. The main reason for the high rejection rates is the debt service ratio and credit score of the applicant.
At MRP Advisory Services, we have clients with low debt service ratio and yet cannot qualify for a housing loan. In today’s banking environment, financial institutions are very selective in offering loans.
Congratulations to those who managed to get a loan to purchase your dream house. What’s next then? Most Malaysians take a 30-year loan or the maximum 35-year loan. This is a huge debt or liability in your personal balance sheet. Here are few questions for you to ponder:
1. Do you know there is a huge amount of loan interest you have to pay?
2. Are you going to pay the monthly installment for that long tenure of 30 or 35 years?
3. Are you overpaying your lender?
4. Do you know you can save a lot on loan interest?
5. Do you know you can finish paying off your loan in a shorter tenure?
6. Do you know what will happen to your housing loan due to the fluctuations of the base lending rate, base financing rate or base rate from time to time?
7. Is there a mortgage audit done on your housing loan? On a positive note, how about turning your debts into wealth through mortgage reduction planning (MRP)?
At MRP Consulting, there are few strategies to employ. In order to achieve that, we need the following documents:
1. Letter of offer
2. Loan agreement
3. Loan statement
With all the necessary information, you are able to know the exact amount of loan interest payable to your lender and the remaining tenure of your loan. With respect to Islamic financing, be it Bai Bithaman Ajil or Musyarakah Mutanaqisah or Tawaruq, you too are able to know the actual amount of the bank’s profit payable and remaining tenure.
The following are other MRP benefits:
1. SAVE UP TO 80 PER CENT OF THE TOTAL LOAN INTERESTS PAYABLE
2. SHORTEN THE LOAN TENURE BY FIVE TO 20 YEARS.
The beauty of the MRP service is the ability to finish paying off the loan in five years.
It can be achieved with multiple applications and strategies, ultimately turning your debt into wealth.
3. RETIREMENT PLANNING MATCHING.
4. CHILDREN’S HIGHER EDUCATION MATCHING.
5. OWNING MORE PROPERTIES.
In financial planning studies, individuals are encouraged to plan to have passive income for retirement. One of the ways is to own multiple properties. In general, most people in their live only own one or two properties.
This is due to poor financial planning and ignorance. Most people do not give a thought to having many properties, only to realise at their retirement age that they should have done it in their younger days.
In order to achieve this objective, borrowers should incorporate MRP in their financial planning. It is simple and efficient.
6. OWNING LARGER PROPERTIES
It is everyone’s dream to live or own a larger property, such as from single storey to double storey, from double storey to semi-detached bungalow, from semi-detached bungalow to bungalow, and from condominium to landed property.
Through MRP, you can have the option to live or own a larger property. The purpose is to finish paying off the loan earlier and have 100 per cent equity. With capital appreciation and the equity, you can use it to trade in for a larger property. This will also increase your personal net worth at your retirement age.
7. LIVING A DEBT-FREE LIFESTYLE
Some people may be risk-averse and wish to have a debt-free lifestyle. So through MRP, we plan according to the client’s desire. They may have a 30-year loan tenure and later realise that they want to be debt-free as soon as possible.
First-time home buyers and investors can expect to gain informative property insights during the MyRumah Property showcase to be held at The Curve, Mutiara Damansara from October 6 to 8.
Organised by the New Straits Times Press (Malaysia) Bhd (NSTP), the fourth series of the showcase will feature eight well-known property developers and non-developer exhibitors, 19 top property speakers and 14 forum panellists.
More than 10,000 visitors are expected to throng the three-day event that will be open to public from 10am to 10pm.
The main concept of the event is the “3E”, education, exhibition and entertainment. The public will be educated on property investments by top developers and speakers while also view the exhibitions.
MRP Advisory Services founder and chief executive officer Franciss Chin will be speaking at the NSTP MyRumah Property Showcase at The Curve, Mutiara Damansara, which will be held from October 6-8.