One of my friend just brought a new town house. The developer managed to deliver the property on time. Now is under the property inspection and acceptance phase. She was so lucky that there is already potential tenant approached her for rent. She was excited as there is people (the tenant) helping her to pay her housing loan installment every month. Which release her from cash out big portion of her monthly salary income for other usage instead of installment.

As this is the first time become landlord, she is bit nervous. As a friend of her I shared my landlord experience with her. Oh dear, suddenly I realized that I haven’t document down the knowledge I have gathered!

Here some tips as a landlord.

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Popularity: 4% [?]

The much anticipated rise in mortgage lending rates has not happened as predicted and the Overnight Policy Rate remains at 3.5%, and Base Lending Rate for the time being, stays at 6.75%. However pundits maintain that an interest rates increase in the third quarter of 2008 is likely.

Regardless of the eventual movement in OPR, Malaysian lenders continue to compete, and September saw the launching new “discounted” home loan packages and some with innovative features.

For quite a long time, HSBC watched as Malaysian Banks slashed rates. Now the “world’s local bank” with a long history and reputation of service excellence, finally introduces a number of “winning” home loans. If you are not fussy about its 7-year lock-in, then check out HSBC’s Home Smart value Plan (Non Free Moving Cost, No MRTA) which starts with a first year rate of BLR-2.25%, followed by BLR-1.75% (years 2-5) and then BLR-1.95% from the sixth year onwards.

The bonus is that the said package comes with “flexi” features, allowing prepayments and withdrawals.

However, the attractive rates apply provided the Letter of Offer is accepted within 3 days of issuance, which is fair enough.

As far as Refinancing is concerned, smart money is with HSBC’s Home Smart Refinancing (min RM RM250,000) that starts with BLR-2.35% and ends with BLR-2% (years 2-5 interest rates vary depending on the loan amount). This is without a doubt the star amongst all refinancing packages out there…and as said earlier…delivered with a healthy dose of top-notch service.

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Popularity: 9% [?]

AFAIK, loan approving officers look at several things when they are approving your loan request:
1. The kind of loan you are requesting (unsecured or secured)
2. Debt ratio (whether you are ‘high’ geared – >50% of your gross income paying off debts, or ‘low’ geared)
3. Your previous loan payment record (this is where CCRIS and CTOS comes in)
4. Your income record (whether it is consistent)
5. Your demographical background (Age, Sex, previous employment, Education level, etc.)

If you have a debt of 8k and other monthly commitments of 2k and you are making about 2.5k, most probably a loan for a house valued at 200k might not get approval.
But if you earn 5k (lower debt ratio, higher gross income) you should have a fair chance.
If you have been starting-quitting-starting-quitting-starting jobs for the past 2 years, it will trigger a red flag to the lender (bank), and your chance would be lower.
But if you have an FD of 10% of the loan amount (semi-secured), some banks would take that as a sign that you are cash-rich and a worthy borrower.
The approval given is not just because of CTOS or CCRIS, as these are only a factor in approving the loan. Most banks would allow their loan officers to fight your cause, thus they will be looking at the applications on case-by-case issue to gauge as accurate as possible your credit worthiness.
In lending out money, the bank wants to be 100% sure that you would be able to service out your loan throughout the full tenure. They are not as interested in taking back the property what more dragging you all the way to the courts for some NPL from John Doe.
Your responsibility is to provide them the necessary documents and evidence that you are worth their gamble.

Popularity: 8% [?]