1. Home Loan Eligibility
First things first: eligibility. Think of it like a VIP pass to the housing loan party. To get in, lenders look at several things:
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Credit Score: Imagine your credit score as a report card for managing debt. The better your score, the more likely you are to get favourable terms. For instance, if your credit score is high, you might snag a lower interest rate.
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Income: Banks would also want to know if you have a steady income to cover your loan repayments. If you’re earning well, it’s like having a stable job that assures you won’t miss payments.
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Employment Status: Stable employment is like a strong anchor. It shows that you have a steady source of income.
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Debt Service Ratio (DSR): This is a ratio of your debt payments to your income. If your DSR is low, it means you have a good balance between your earnings and your existing debts. For example, if you earn RM10,000 a month and your total debt payments are RM3,000, your DSR is 30%, which is generally considered healthy.
You can also use an easy tool like Loanstreet’s Home Loan Eligibility Quick Check calculator to help you find out your eligibility.
2. Home Loan Interest Rates
Interest rates can significantly impact the overall cost of a loan. A higher interest rate means you'll end up paying more over time. For instance, if you borrow with a 4% interest rate, you'll pay more compared to a 3% rate. That's why it's important to shop around for the best rate, as it could save you thousands over the life of the loan.
Just a heads up, Bank of China (Malaysia) Berhad is currently offering competitive rates with their Flexi Housing Loan with interest rates as low as 3.88% p.a*.
3. Type of Loan
Here’s a quick overview of the types of loans you might want to consider:
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Term Loan: This is the classic option with fixed monthly repayments. It’s like a predictable monthly expense—easy to budget for and straightforward.
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Semi-Flexi Loan: Think of this as a mix of fixed payments with some flexibility. You can make extra repayments to reduce your interest but still have a consistent base payment.
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Flexi Loan: This one allows you to have the flexibility to withdraw and deposit into the deposit account as and when the customer pleases without incurring any additional charges or procedures.
For example, the BOCM Flexi Housing Loan is super flexible. It’s like having a loan with a built-in savings account. It t allows you to deposit excess funds anytime to save interest and withdraw excess funds anytime, giving you control over your finances.
4. Lock-in Period
A lock-in period is like a commitment phase where you’re tied to your loan terms. For example, if you sign up for a 3-year lock-in period, you’ll have to stick with the loan terms for 3 years. This can be great for stability but limits your ability to switch loans or repay early without facing extra fees.
5. Margin of Finance
The margin of finance is how much financing the Bank will offer. If you’re buying a home worth RM500,000 and the bank provides an 80% margin of financing, they’ll finance RM400,000, leaving you to cover the remaining RM100,000. Knowing this will help you plan your finances to purchase the property.
6. Legal Fees and Stamp Duty Charges
Don’t forget about additional costs like legal fees and stamp duty. These are the hidden fees you’ll need to budget for. For instance, if you’re buying a property, you may also face stamp duty charges based on the property’s value and legal fees for drawing up the loan documents. It’s smart to set aside extra funds for these expenses to avoid surprises. However, the Bank of China can assist you by adding property valuation fees and legal fees to housing loan financing.
7. Loan Terms and Conditions
Loan terms and conditions are the fine print you need to read. They include the repayment period, flexibility, and early repayment penalties. For example, some loans might have penalties if you pay off the loan early, which could affect your decision if you plan to settle the loan quickly.
8. Approval Process
The approval process is like a series of hoops you need to jump through. It involves submitting documents, undergoing credit checks, and more. Fortunately, the BOCM e-Mortgage Platform makes this process simpler and more efficient, so you can apply for your loan online anytime, anywhere conveniently.
All you need to do is submit the mortgage loan information online before the bank proceeds with the assessment. You can also digitally upload the application documents to apply for loans.
Ready to take the Next Step?
If you’re looking for a top-notch home loan service with great savings, explore BOCM Flexi Housing Loan. It offers benefits like flexi loan options and competitive rates from as low as 3.88% p.a.* (valid till 31 December 2024).
Don’t forget to begin your home loan journey with the BOCM e-Mortgage Platform today. Terms & Conditions apply. Good luck!
For more info about the BOCM Flexi Housing Loan, please call 03-23878232/03-23878815 or visit the BOCM corporate website www.bankofchina.com.my.
*BOCM Housing Loan Acquisition Campaign 2024 Terms and Conditions apply.
**The above article is intended for informational purposes only. Loanstreet accepts no responsibility for loss that may arise from reliance on information contained in the articles.
