Find The Best Home Loan For You

What is a Home Loan?

A Home Loan, also known as a Mortgage, is a type of loan specifically designed to help individuals or families purchase a property, such as a house or an apartment. It is a long-term financial arrangement where the borrower (the homebuyer) obtains funds from a lender, typically a bank, to finance the acquisition of a residential property.

How does a Home Loan work?

The way a Home Loan works is that the bank provides the necessary funds to the borrower, who then uses the property as collateral for the loan. The borrower agrees to make regular payments, usually on a monthly basis, to the lender over a specified period, typically ranging from 10 to 30 years. These payments include both the principal (the amount borrowed) and the interest charged by the lender. The property remains as security for the loan until the entire debt is repaid.

How to get a Home Loan?

To obtain a Home Loan in Malaysia, the borrower typically needs to go through the following steps:

1. Determine the loan amount and eligibility: The borrower should assess their financial situation, including income, existing debts, and savings, to determine the maximum loan amount they can afford.
2. Choose a lender: The borrower can approach various banks or financial institutions in Malaysia to compare their Home Loan offerings, interest rates, and other terms and conditions.
3. Submit the loan application: The borrower will need to provide the lender with various documents, such as proof of income, identification, and information about the property they wish to purchase.
4. Obtain loan approval: The lender will evaluate the borrower's creditworthiness and the property's value before approving the Home Loan.
5. Complete the legal and financial processes: Once the loan is approved, the borrower will need to complete the necessary legal and financial processes, such as signing the loan agreement and completing the property transfer.

What is the difference between a First Home Loan and Refinancing Loan?

A First Home Loan is designed for purchasing your first property Aimed at first-time homebuyers who are just entering the property market. Interest rates can vary depending on the financial institution and market rates, but first-time buyers may have access to special programs with lower rates.

A Refinancing Loan is meant for an existing homeowner who wants to replace their current mortgage with a new one, often to take advantage of better terms. Homeowners who already have a mortgage but want to lower their interest rate, reduce monthly payments, switch from a variable to a fixed rate, or cash out equity. Refinancing is often done to secure a lower interest rate, shorten or lengthen the loan term, or cash out home equity.