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What You Need To Know About My First Home Scheme

What you need to know about

My First Home Scheme?

The scheme is one of the measures announced by the Government in the 2011 Budget aimed at assisting young adults to own a home. The scheme allows homebuyers to obtain 100% financing from financial institutions, enabling them to own a home without having the need to pay a 10% down payment.

 

Cagamas SRP Berhad will guarantee the banks on financing above the 90% level i.e. if a borrower obtains 100% financing, Cagamas SRP will guarantee 10% (from 90% to 100%) of the financing.

My first home scheme

LOAN   FINANCING AMOUNT Some   banks (not all) in town are offering 100% financing based on Purchase Price   or Market Value, whichever is lower.Example   1:If purchase   price is RM300,000 & Bank valuation is RM300,000.

Bank   are willing to give financing up to loan amount RM300,000.

Provided   customer able to fulfil the banks and cagamas criteria under this   scheme.

Example   2:

If your   purchase price is RM300,000.

Bank   valuation is RM280,000.

Bank   are willing to give financing up to loan amount RM280,000.

Provided   customer able to fulfil the banks and cagamas criteria under this scheme.

Why   RM280,000 and not RM300,000?

Because,   bank will not finance anything above the market price. Banks will not take   risk to finance such property.

It’s   just mean you are buying the property on the higher price.

PROPERTY   Financing   property for Market Value or Purchase price  ( whichever is lower) to be   from RM100,000 to RM400,000.Completed   Residential PropertiesThis   simply means any residential property in whole Malaysia and it is completed.

This   included if you are buying from owner, developer or real estate agent. Property   Type including terrace houses, townhouse, bungalow house, apartment and condominium.

Under   Construction residential properties.

This   means any residential property in whole Malaysia which under   construction.

For   under construction property, not all the banks are able to give financing.   You have to check with the respective banks whether they are the project   financing bank.

If they   say yes, then you have to check with the banks whether they are offering My 1st   Home Scheme Package. If yes, for both, then you can apply with the   banks.

Please   take note, if you are buying leasehold property:

Normal   leasehold property is up to 99 years. However, the leasehold   balance will be reducing from year to year.

If the   property you are buying, the leasehold years balance less than 60 years, then   the bank may need to get Cagamas SRP approval before offering this scheme.

How   long will Cagamas takes to approve?

While,   unsure…and Cagamas may have right to decline too.

Therefore,   please try to avoid any leasehold property less than 60 years balance.

PURPOSE   OF LOAN/FINANCING My First   Home Scheme only for the purpose of purchasing a residential property.DO NOT   applicable for REFINANCING.
LOAN/FINANCING   FACILITY/PRODUCT & RATES For   banks packages, normally only conventional product.Interest   rates will be in the range of BLR-1.00% to BLR-2.10%.Note: You   are not encourage to shop around for interest rates if you would like to   opt for My First Home Scheme, because to get approve is difficult,

You may   want to try few banks at the same times. To avoid any disappointment.

LOAN/FINANCING   TENURE Max 30   years tenure, subject to not exceeding borrower’s age of 65 (based on younger   borrower’s age, for joint application) at loan maturity
BORROWER   /CUSTOMER *Malaysian   Citizenship only.*Young   Adults not exceeding 35 years of age.*First   Time Homebuyers only (defined through CCRIS checks) and declaration in   Application form and letter of offer. To confirm this is your first house.

*Preferable   Joint borrower is spouse and follow by sibling.

Note:

If you   do not have a house but you have a joint housing loan with someone, just to   assist someone to get loan, you may not able to apply for this scheme.

EMPLOYMENT *Only   Private Sector.
*Not for self-employed and government staff.
INCOME   /LIQUIDITY RESERVE *Max   salary of up to RM5,000 per month per individual borrower/customer*Spouses   Joint application with combined gross income of up to RM 10,000 with single   borrower’s gross income not exceeding RM5,000/month( Bonus to be excluded   from calculations.)*Other   joint applicant (other than spouses’ relationship) still bound to maximum   RM6000.
DOCUMENT   REQUIRED 1. NRIC   copy
2. Property Booking Receipt
3. Vendor Sales and Purchase Agreement / Title copy / New Sales and Purchase   Agreement
4. Latest 3 months pay slips
5. Latest 3 months personal bank statement (To show salary credited as per   pay slip)
6. Employment Letter ( on letter head or bearing company chop) confirming job   title and income details.
7. Latest From B/BE with payment receipt acknowledgement
8. Latest KWSP statement/Latest EA form
9. Deposit Statement e.g. Fixed Deposit, ASB or Bonds .
CREDIT   CRITERIA *If you   have other loans, please make sure the payments are prompt.If it   doesn’t, the chances your application to be declined is definitely high.Go and   print your CCRIS Report with Bank Negara before buying any property. After   print, you can email to us or you can consult the bank negara officer on the   spot.

*Debt   Service Ratio (DSR) under this Scheme must be 1/3 of your income.

Exceptional   cases up to 50%-60% with evidence of good saving habit.

How to   calculate Debt Service Ratio (DSR)?

Please   refer to following example:

Nett   Income : RM3500

Existing   commitment( Monthly instalment) :

Personal   Loan : RM300

Credit   Card outstanding : RM1000 x 5% ( 5% is the min payment) =RM50

Total   Existing Commitment: RM350

New   housing Loan instalment : RM1000

Total   Commitment: RM1000+RM350= RM1350.00

Debt   Service Ratio ( DSR) :

RM1350   (Total Commitment) / RM3500 (Nett Income) x 100 = 38.57%

OWNER   OCCUPANCY One of   the borrowers must use the property as primary address.While,   not sure how banks going to check it… but just to be safe make sure one of   the borrower going to stay at the house.
LAWYER   FEES  When   buying a house with loan financing.You   will enter 2 agreements.1) 1st   agreement will be between Purchaser (You) and Seller/Developer. This   agreement name Sale and Purchase Agreement ( SPA )

* If   buying from seller, you have to pay the lawyer fees by yourself. Estimated   about 3-4% of Purchase Price.

* If   buying from developer, you have to pay some small fees only. But, definitely   cheaper than buying from seller. Some developer, even absorb this fees.

2) 2nd   agreement will be between Borrower (You) and Bank. This agreement name Loan   Agreement ( LA )

This   lawyer fees will be around 2-3% of loan amount.

If you   are applying for 100% financing, bank normally will not finance these fees.   You will have to pay by your own.

 

STAMP DUTY For   completed property SPA, you will have to pay stamp duty for this.Please   refer to our Lawyer Fees and Stamp duty Article  on the calculation.For   under construction property, normally, you do not need to pay. Please check   with your developer.

50%   stamp duty exemption on purchase of first residential property of up to   RM400,000 extended to Dec 31, 2014.

For   example :

Property   price : RM300,000

Stamp   duty calculation :

1st   RM100,000 x 1% = RM1000

Balance   RM200,000 x 2% = RM4000

Total   Stamp duty : RM5000

After   50% rebate stamp duty payable : RM2500

 

For 50%   stamp duty exemption on loan agreement , the example as below: 

Loan   Amount : RM300,000

Stamp   duty : RM300,000 x 0.5% = RM1500.00

After   50% rebate stamp duty payable : RM750

 

 

VALUATION FEES Only   for completed property.Valuer   will have the scale fees.All   scale fees is based on property price. We’re only able to provide estimation:

RM100k-RM200k   = RM600-RM700

RM200k-RM300k   = RM700-RM800

RM300k-RM400k   = RM800-RM900

For   under construction property, valuation report is not required.

 

DEPOSIT   TO SELLER OR DEVELOPER For   normal cases, when you purchase a property. You will be paying upfront 10%   upon signing of SPA.Balance   90% will be pay by your approve bank.For   100% financing, unless seller or developer agree to wait for your bank to   release the 10% deposit which normally will take 2 months onwards (depending   on your property, some up to 6 months), then you do not need to pay.

However,   if they insist upfront for 10% deposit, you still need to come out first and   the bank will reimburse to you.

Therefore,   bear in mind you still need to prepare the 10% deposit.

SPECIAL   REMARKS To   summary up, if you are buying a property and would like to apply my 1st   Home Scheme, you will need to prepare for the following cash :1)   Lawyer Fees for Sales and Purchase Agreement2)   Lawyer Fees for Loan Agreement

3)   Valuation Fees for completed property4) 10% deposit of Purchase Price ( will   be reimburse by bank)

For   Example :

If   property Price : RM300,000, you have to prepare the following fees ( Based on   the maximum calculation):

1)   Lawyer Fees for Sales and Purchase Agreement (4%) = RM12,000

2)   Lawyer Fees for Loan Agreement (3%)= RM9000

3)   Valuation Fees for completed property = RM900

4) 10%   deposit of Purchase Price = RM30,000

Total   Cash needed upfront : RM51,000

(Yet to   less 50% stamp duty. So about RM47,750.00 after deducted)

 

 

* Note: The above criteria and information are for illustration only. We will not be liable for any losses or damages cause by it. The final approval still subject to bank’s decision and terms and conditions apply. While every care has been taken in compiling and preparing the contents herein, neither the company & nor its consultant(s) guarantees the accuracy, completeness and/or applicability of the information provided nor is the information meant to be final and binding.

 

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By | 2016-11-01T10:40:13+00:00 September 5th, 2013|1st Time Home Buyer, Housing Loan, Latest Article/News, My First Home Scheme, Purchase From Agent/Owner|Comments Off on What You Need To Know About My First Home Scheme