Do you wish to buy property that you can call your home?
Feeling daunted by the thoughts of having to bear heavy expenses? Do you feel that it is something that is perhaps beyond your capabilities?
Fret not, my friend.
Thanks to the home loans, buying a home will never be a far-fetched dream for you anymore.
Types of home loans available
Mostly home loans in Malaysia available for application are categorized into 3 basic kinds depending on the duration. So you get to select from the term loans, flexible loans, and semi-flexible loans.
If you have relocated to Malaysiarecently and muddled over the type of loan that is best for you, this article will provide you with some quick and useful information.
- Standard Home Loans
If you earn a fixed salaried income every month, then term loan would be the best option for you. In this loan, you need to pay the loan amount that is calculated on the basis of either a constant or variable rate of interest on the principal amount that is borrowed. You need to pay back the entire amount via monthly installments in a stipulated span of time.
A standard home loan with floating interest rate can be advantageous since a lower rate of interest means that you have to pay a lower amount. However, with a fixed interest, you will need to pay the same amount for the entire term of loan repayment.
- Flexible Home Loans
As the name tells you, this scheme offers greater flexibility to the customer in terms of loan repayment options. The sole idea behind this loan type is that your interest rate is directly proportional to the amount you pay off. It allows you to pay additional amounts according to your affordability. If you can afford to pay a large sum as an overpayment, then your interest rate over the balance would be reduced.
- Islamic Home Loans
The Islamic financial system in Malaysia comes with a very different approach to lending money to people. The Islamic home loan schemes make use of the Base Finance Rate (BFR). This helps to determine the total rate of Profit at which the loan provider or bank is allowed to earn in lieu of the home loan that it offers to you. The rates offered are quite competitive and a new system called Ibra is implemented in case people wish to make advance payments for repaying their loan.
How to choose the best home loan?
Home loans are now offered in various forms and numerous financial institutions have sprung into action to make them more accessible to potential customers. But the interesting fact to note here is that choosing a home loan is harder than choosing the home you want to purchase.
You need to keep in mind some specific factors before ahead for a home loan. But the basic and most important thing is to always choose a home loan as per your affordability instead of risking all your hard accumulated wealth at one go!
So, before you make the big decision of your life, you should be sure enough to check all the differenthome loans in Malaysia available for applicationand understand the terms and conditions first. Only then can you figure out the one that suits your requirements to the T.