Things You Should Do When Applying For A House Loan

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Buying your first own property to be called home is another milestone achieved in your life. Whether it is for investment purpose or own stay, most people are still confused with the steps of buying a new house in Malaysia, or a home. Buying your own property may seem easy but when it comes to going through the procedures of buying a home, you then realize that you have missed out on many steps and wished you know the steps earlier so you could avoid the unnecessary troubles.



Before you apply for a house loan, there are some loan terms you need to know. This article will guide you through the few things that you should do when applying for a house loan.
1. Best housing loan rates
First of all, you need to know that different banks offer different interest rates. Therefore, you will need to do your research and find out which bank offers the best rates for housing loans. The interest rates offered by the banks differ based on several factors, such as the loan tenure, loan amount, your credit history and etcetera.

With the best rates for housing loan, you will also need to understand the terms and conditions that come with it. There are some guides on home loans out there that you could check out on.
2.  Flexi loan serviceIn addition, many applicants have missed checking out the flexi loan service that is available. A flexi loan is a loan that allows you to place additional money that is withdrawable in the loan account. It is a flexible loan service that allows you to draw out money without any charges. As for semi flexi loan, there is a charge if you withdraw money from the account.

However, it is recommended to go with a full flexi loan if you have the extra money that you could use to make advance payment and reduce the outstanding balance. In addition, your cash balance in your account is excluded from outstanding balance for the interest calculation. This will then give you more flexibility and you will be saving on your interest payable as you will be paying for lesser interest when you opt for a full flexi loan.

Although there are benefits that come with a full flexi home loan, it is perfectly fine to opt for a non flexi loan if you are tight on your cash or you do not have any intention of putting your money into the loan to reduce interest payable. Furthermore, you might also be able to get better interest rate if you opt for a non flexi loan.

Make sure you make a housing loan comparison from different banks before you decide on which loan service to engage with. If not, engage with a banker to seek for professional advises.

3.   Lock in period
Many home buyers neglect the importance of lock in period for their housing loan package. It is an important aspect that people should learn before applying for a housing loan. Lock in period is a factor that you should pay attention to. Lock in period is the period where penalty fees will be imposed if you plan to clear the loan earlier. In any event of breach of contract, there will be penalty fees applied to the applicant along with the conversion and cancellation of loan agreement. Typically, the penalty fees are approximately 2% to 5% of your outstanding loan balance. Therefore, it is advised to go for loan package that offers the shortest lock in period and comes with a low exit penalty. Do note that bank loans that come with no lock in period often have a higher interest rate as compared to those bank loans with lock in period. However, some banks do not charge penalty fees if the applicants give advance notice.

4. Bank approval
Buying a property can be a tedious process, but waiting for your bank loan to get approved by the bank is even more of a daunting process. All banks have their own ways to deal with the procedures and their own policies. Different banks also have different requirements and process when it comes to bank loan application. Normally, it would take approximately 1 week to 2 weeks to process and get the bank loan approved. Therefore, prepare a checklist for documents that are needed by the bank and always get your supporting documents ready to prevent the delay of approval for your desired bank loan.

In conclusion, getting your home loan approved is not as daunting as it seems to be, as long as you start preparing and planning earlier. Be sure to read through the conditions on the bank agreement before you sign the loan agreement. The procedures of getting your home will be much easier after you secure a bank loan.

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