We have the Best Home Loan in Town! Reality or Myth?
I went to attend iProperty.com Expo talk called ”Banks vs Mortgage Brokers-A Better customer value proposition” on 26 July 2008 at KLCC Convention Centre, KL.
Here is a couple of tips shared by the Mr.Adrian Un, Sales Director of Mortgage Broker Sdn Bhd:
- It not uncommon to read “We have the Best Home Loan in Town!” Is this Reality or Myth? Always read the fine print and hidden cost of the advertisement offer. If the rates is low then maybe you have to fork out more on other things like legal, stamp duty fee etc. No matter how good the deal look like remember that Bank is a profit making business entity.
- Do not just take Verbal promises and always ask for written confirmation to avoid misinterpretation or mis-sell by sales officer. They may just highlight the good points and do not reveal the minus point about the package. If you work in Sales line before you will known what I am talking about.
- Read each and every word of the Loan letter offer and if not sure always check with your lawyer. If you just simply signed then you may sign YOUR LIFE AWAY! It will easily effect your financial health for another 10 years or more.
- The bank rates is always negotiable especially when your loan amount is high. Whatever advertise in paper is public rate. Ask the sales officer if you think you deserve a better rate. What is the cost of ASKING?
- Check the Penalty Clause which is normally located on the 3rd or 4th page of the offer letter. Penalty Clause means the bank will charges some fee if the loan is fully pay before the contracted period.. Most bank loan have 5 years penalty clause upon disbursement which mean if fully settle before 5 years then penalty would be applied. The rational is majority of your loan installment will be offset more on interest compare to the loan principal in the first 5 years. Make sure get a loan that the penalty clause start when the loan first disburse and NOT on full disbursement. Imagine if you home is under construction for 2 years and the penalty clause stated it will start after FULL disbursement then technically the Penalty Clause period is longer than 5 Years!
- Choosing a housing loan by its nature is difficult enough. Face it, how many of us can calculate your repayments given the loan amount, the tenure of the loan and the interest rates? How many of you can tell the advantage of one loan over the other based on the different applicable interest rates? Use Mortgage Brokers services if you wanna save time and not familiar with the process of obtaining loan. A mortgage broker is a match maker between a borrower who is interested in seeking loan and a lender, ie, bank or financial institution. The broker draws from a pool of various lenders to find the right match for the borrower.
The use of Mortgage Brokers services is FREE! Brokers are paid by their panel banks and financial institutions. The fee payable to the brokers does not increase the interest rates and fees payable by you to the bank or financial institution. You pay the same interest rate and fee, regardless whether you obtain the loan package concerned through a broker or direct from the bank or financial institution
