Miichael Yeoh is the founder and CEO of GM Training Academy. With his many years of experience in the mortgage banking industry, Miichael has helped thousands of loan borrowers by providing comprehensive mortgage advisory and solutions. He has also trained many real estate agents with regards to mortgage financing. Miichael is also a regular columnist in the property section with New Straits Times Press, Property Guru and also Property Hunter magazine. He has been invited to numerous public talks in Property Exhibitions, Seminars and also developers.
1) I m buying my second property. Should I take MLTA instead of MRTA?
Whether a person buys either MLTA or MRTA depends on a lot of factors. It is not fair to say that one is better than the other one.
Borrowers will take up MRTA depending on
1. If they only need basic protection
2. Depending on their budget. MRTA is cheaper and you can also finance into your loan.
3. If you are thinking to flip your property and wants some form of protection in short term you can opt for MRTA. Minimum tenure is only 5 years and is much cheaper.
Borrowers who will take up MLTA…
1. Wil Have More budget and wants more than the basic protection.
2. Will be able to use as financial planning. No need to repurchase after you sell your property as you can bring over to your next purchase. Save on the premium and also cheaper when bought at younger age.
3. Will get their premium paid back upon loan completion. This can be a form of ‘force’ and at the same time protection.
Choose the one you are most comfortable with before making a decision.
2) With the potential of interest rate increase should I take a fixed interest loan instead? Why?
If the BLR increase is very significant such as 2-3% then you might consider fixed rate. I remember more than 10 years back when BLR is very high I use to sell Islamic Package as an alternative as the interest rate is fixed throughout the whole tenure. Today, we even have Insurance companies such as AIA and ING offering fixed Interest rate. These company are offering at an average of 5-6% fixed.
For those who are worried about BLR fluctuations in future can consider these alternatives. Currently borrowers taking up fixed rate are still a small handful. Do read the terms and conditions of the Letter of Offer before signing as the terms might be different than a conventional loan..
3) Should BNM let banks determine the maximum loan repayment period instead of the maximum of 35 years? Would this cause potential bubble?
I think BNM is doing the right thing. I fully support their tightening of lending policies. Loan repayment of 30 – 35 years is fine. Most borrowers will be able to afford the installment. 10 years back the maximum tenure for most banks is only 30 years and nobody complained. This is one of the ways BNM is using to manage Malaysia’s increasing debt ratio. Else we will be experiencing sub-prime crisis which struck US badly. The signs are already showing.
4) Ringgit has been on a downtrend vs US dollar. Are there any effect for this to Malaysia property market?
Since January our Ringgit has depreciated more than 9% against US dollar. This make our properties cheaper to foreigners. I think most of you also notice that there are more foreigners buying Malaysian properties as compared to previous years. I was at a property launch recently and I saw investors from China coming in buses. Cheaper property prices as compare to other countries couple with favorable exchange rate makes our Malaysian Properties very attractive.
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