1) Purpose of buying the house
Some people buy it as part of their investment. They
will rent the house to the potential tenant and may sell
it in the future.
Some people will purchase it and to stay at the house
for long term and most likely until they retired.
Depending on the purpose of purchasing the property, the
type and the location of the house may differ
significantly.
2) Eligibility of the housing loan
Most people are unable to afford to purchase a property
by cash. Hence most of them will turn to the banks to
apply for housing loan.
The banks will look at several factors prior approving
your loans. Those include;
a) CCRIS (Central Credit Reference Information System)
- this is a centralised database in Malaysia which can
be accessed by all of the financial institution
- the database will display all of your credit status
(loan amout, outstanding payment etc) for the past 12
months. Note that any record more than 12 months will be
deleted from the system. Hence, you need to make sure to
have good financial record 12 months prior to apply for
loan.
- if you have poor CCRIS record which means that you are
at high risk of defaulting a loan, it will significantly
affect your loan approval status
In the past, you need to go to branches of Central
Bank of Malaysia (BNM) to print out your CCRIS record.
Now, you can view your CCRIS record online (Requires you
to go to BNM branch once to get the pin number)
(https://eccris.bnm.gov.my/)
b) Debt Service Ratio (DSR)
This is a ratio used to calculate the percentage of your
income that can be used to pay the monthly installments.
Rough calculation: Sum of all your commitments (house
loan, car loan, personal loan etc) divided by your total
income multiplied by 100
Each bank have different way of calculating your DSR and
have different guidelines on the level of acceptable DSR
Bank A may accept up to 60% of DSR and Bank B may be up
to 70%. Hence, it is imperative to go to several banks
to check on your eligibility criteria for housing loan
c) Margin of finance (loan to value ratio, LTV)
This means that how much the bank will give you the
loan. Most banks can give loan up to 90% of the property
price for the first house and the percentage will get
lower as you purchase second or third house.
Hence, if your loan is only 90% of the price, you need
to prepare cash for the remaining 10%.
