There’s good news for people that want to buy house. The complexities of housing loan agreement have been stripped away as all commercial banks now have to follow a standardised template rule enforce by Bank Negara.
It is means that greatest transparency and easier understanding of the terms attached to what is arguably an individual’s biggest life investment – a home.
The template provides clear and consistent definitions of terms which are greatest concern to a home buyer, such as base lending rate, prescribed rate, default rate and margins.
The template can be downloaded from the Association of Banks Malaysia (ABM) website . The template makes complex home loan documents more ‘consistent, streamline and simplified’. The templates simplified the loan agreement to just 15 pages and highlights the key areas for the consumer.
The key areas include how much do I have to pay each month, how much is the interest, what happens if I default, as well as what is considered a default.
The standardised home loan documents are in a ‘bundle’ of three parts :-
a. Part A contains standardised provisions definition of key terms such as base lending rate, default rate, interest period and lock in period.
b. Part B contains other provisions and terms not covered in ‘A’ such as Indemnity for loss, Taxes and Withholdings and Consolidation and Combination of Accounts (these may vary from bank to bank)
c. Part C is the respective bank’s letter of offer.
However the standardised agreement is only applicable to a principal loan sum of less than RM 500,000 against the purchase price for individuals and for residental properties.
Nevertheless, a large majority of home buyers as based on a survey conducted by ABM in 2011 and 2012, 80% of loans for homes are under RM 500,000.
The standard template will also be applicable for existing home owners who wish to refinance their home loans or switch banks, although in this case, extra stamp duties may apply. It is also expedite the loan disbursement process as there will be better understanding between bank and customers.
Reference :- TheSundaily
Hope all people especially for those who don’t have house could grab this opportunity. Learn how to buy house and download the template. If it is too hard to understand, find expertise especially those who in law field. Maybe they will help you.
I’m also start learning the template because I’ve aim to buy second properties in the future. I’ve found many things that really help us to get a housing loan easily.
If you have any additional information or opinion about this template, let’s share it at the comment below.
p/s :- I’m sorry if this article not related to your country. The template is only available in Malaysia only.