Now, you have understood the Sale and Purchase Agreement (read here if you miss the article ( ) , which is a written contract in which the seller and buyer(you) represent themselves in a real estate transaction. It includes all of the agreed-upon terms and conditions that bind both parties throughout the transaction. This is done in the presence of a lawyer, who will explain the contract's terms to you. Before signing the Sale and Purchase Agreement, make sure you read and understand all of the terms in the document because you will be bound by them once you sign.
Excellent. Now, you are ready for your next move - to buy your dream house.
How to buy a house in Malaysia?
When you are ready to become a homeowner, it is critical to identify the most important factors to consider when buying house in Malaysia.
There are several factors to consider, including your readiness, local market conditions, and ensuring you understand the key components of the home buying process. As a first home buyer, you are an individual who has never owned all or part of a property before purchasing a home. A first home buyer like you may qualify for financial assistance programs or initiatives to help you buy your first home. Before purchasing a home, you should be aware of the key terms as a potential homeowner.
Master the property buzzwords below and you will be more confident in your journey towards owning your dream home.
Why do you need to know
Base Lending Rate (BLR)
It is a reference lending rate set by Bank Negara Malaysia, based on the cost to lend money between financial institutions.
BLR is pegged to BNM’s Overnight Policy Rate (OPR). The OPR is the minimum interest rate at which banks lend money to each other. Hence, when the OPR is cut, banks will lower their BLR accordingly. When BLR is reduced, so will the cost of borrowing for us consumers.
This means that for average Malaysians like you and me, we get to enjoy lower interest rates on our loans. This would then be the best time to take out a loan or refinance an existing one.
The length of time that the mortgage contract terms, including the interest rate, are fixed.
The longer the term of your mortgage, the lower your monthly payments will be because the cost will be spread out over a longer period of time. However, in addition to taking longer to pay off the balance, you will pay more in interest over the life of the mortgage.
A Central Credit Reference Information System (CCRIS) report is a credit report created by Bank Negara Malaysia’s Credit Bureau to provide a review of credit of a potential borrower.
It is critical to understand that this report will be used to determine the approval of your home loan application.
A home deposit is the initial 10% down payment from the total purchase price of a property. This payment signals your commitment to completing the purchase.
Before obtaining a mortgage, the buyer must make a down payment from his or her own funds or other eligible sources.
Certificate of Completion and Compliance
A document that is required as part of the property transfer process when purchasing a home.
A Certificate of Completion and Compliance is issued when a newly constructed property is certified as complete and fit for habitation after being assessed and submitted by a professional.
Fixed / variable mortgage interest rate
A fixed mortgage interest rate is a rate that will not rise during the term of the loan. The interest rate on a variable mortgage can change depending on market conditions, but the mortgage payment remains constant.
With a fixed-rate mortgage, your interest rate will remain constant throughout the term. If interest rates remain constant or fall during your term, you will pay less interest with a variable-rate mortgage than you would with a fixed-rate mortgage.
Debt to service ratio (DSR)
DSR is the ratio of total debt to household income. The DSR meaning can be put simply as "a method used by banks to calculate whether or not you can afford the loan you're applying for". In terms of a home loan, this formula essentially helps the bank estimate how much you can afford to fork out for your monthly instalments.
Banks use DSR to indicate how much of your income is being used to pay off debt or meet financial commitments. If you wish to own a home, your DSR usually must not exceed 70% of your total commitment, but it may vary among banks. The formula for DSR is DSR= Debt/ Net income x 100%.
A named party on a loan agreement who serves as a payment guarantee if the primary party (buyer) fails to meet their financial obligations.
A guarantor agrees to be responsible for meeting the payment terms if the primary party (you the buyer) fails to do so.
Mortgage protection plan
These are the types of insurance that most banks will require home buyers to purchase as part of the housing loan package. This is to protect the value of the property. Mortgage Level Term Assurance (MLTA) is a type of life insurance often used to cover the value of a home loan, covering death or permanent disability. The MLTA is a level value of cover, with the total amount insured remaining the same throughout the course of the plan.
Mortgage protection plan is aimed at providing security to your loved ones from being burdened by home loan repayments if you pass away or are afflicted by permanent disability. However, if you do not have anyone to leave your property to and money is tight, getting a mortgage life insurance may not be your highest priority.
Memorandum of Transfer(MOT)
A Memorandum of Transfer (MOT) is a document that stipulates the transfer of ownership from the developer or seller to the buyer. The MOT consists of the details of the buyer, seller, and land title details for the land authorities’ reference.
In most cases, the MOT is prepared alongside the Sales and Purchase Agreement (SPA) and relevant loan documents when a bank loan is taken out to purchase a property.
However, it is important to note that if you are purchasing from a developer and the property is still under construction, the developer may not issue this MOT at the time of purchase until the land titles have been issued.
The buyer is responsible for the stamp duty fee, and not the seller. If the stamp duty is not paid, the transfer of ownership cannot be executed.
When it comes to buying a house in Malaysia procedure, there is a lot to consider. This includes a vast ocean of property buzzwords and house-buying terminology, which you must master! Property buzzwords can quickly become perplexing, especially for first-time homebuyers. With the housing market becoming more competitive and expensive—home sales and median prices are both increasing year after year—a better understanding of property buzzwords could potentially save both buyers and sellers money.
Now that you know these 10 property buzzwords, it is time to choose a home from https://www.seripajam.com.my/onlinesale. There is more exciting deal which offered by Seri Pajam Development that you wouldn't want to miss.