What Should You Do After Booking Your Unit?

Worried about loan applications? We’ve got you covered. Here is a short guide for you to prepare your home loan application documents with confidence!

After successfully booking your unit, the first step is to apply for a loan. You should select a bank offering the lowest interest rates to reduce your overall payment in the long run. After this, the next step would be preparing the required legal documents.

1. Preparing your personal documents

These are used to show your credit-worthiness. Note that documents differ whether you are an employee, self-employed, running a business or working abroad. 

1.1 Malaysian Employees

• Identification Card – NRIC (copy)
• Property Booking Receipt
• Vendor Sales & Purchase Agreement/Title (copy)/New Sales & Purchase Agreement
• Latest 3 months pay slip (for Basic Salary)/Latest 6 months pay slip (for Basic + Commission Earner)
• Latest 3 months personal bank statement (for Basic Salary/Latest 6 months pay slips (for Basic + Commission Earner) which show your salary credited as per pay slip
• Latest EA form
• Latest KWSP statement
• Income Tax – Latest Form B/BE with payment receipt acknowledgement
• Deposit statement eg. Fixed Deposit, ASB or Bonds (if any) – to show how strong your emergencies fund it is

1.2 Self Employed Malaysians

• Identification Card – NRIC (copy)
• Property Booking Receipt
• Vendor Sales & Purchase Agreement/Title (copy)/New Sales & Purchase Agreement
• Latest 6 months Company Bank statement
• Latest 6 months Personal Bank statement
• Deposit statement eg. Fixed Deposit, ASB or Bonds (if any) – to show how strong your emergencies fund it is
• Business Registration

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2. Know your Property Terms

After submitting your loan application, you’ll need to wait around a week for the Letter of Offer. The next step during this time would be learning technical terms such as:

2.1 Loan Types

• Standard Home Loan - their interest rates are calculated based on fixed or floating rates. Advantages of fixed interest rates: you will not be affected by the market’s fluctuations. Advantages for floating rates: if the market rate were to drop, your interest rates would also reduce.
• Flexi Home loan - this is for you if you have extra cash in your hands. You can put additional cash into your mortgage loan account, which will in turn reduce your interest rates. However, you can still withdraw your money at any given time, giving you flexibility to use your funds as you wish. 
• Islamic Home Loan - similar to the Standard Home Loan, this loan uses the Base Finance Rate (BFR) to determine how much your bank earns from lending out the money.

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2.2 Loan Amount

After getting your Letter of Offer, it will state the amount of loan you are entitled to, and you will have to pay off the rest of it yourself. 

2.3 Purpose of Loan

Your Letter of Offer will also state the purpose of the loan. In this case, it will be for a property purchase. 

2.4 Description of Property 

Whether it is a single storey terrace house, single storey semi-detached or other kind. The description will note down all details including land area and size.

2.5 Duration of Loan

Note that the longest term for a property loan is 35 years. Your Letter of Offer will state how long the bank is giving you to complete the repayment, and your monthly repayment amount will depend on this duration. 

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3. Processing/Set Up Fee

All legal documents require processing fees (also known as set up fees). Your Letter of Offer will state all the charges for setting up the loan.

3.1 Monthly Service Charge

A small fee from the banks. The amount is usually not high.

3.2 Prevailing Interest and Repayment

The repayment schedule and interest rates you have to pay will be stated in the Letter of Offer.

3.3 Instalments 

These are the fixed monthly payments you have to pay to the bank.

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4. Security Documents

For residential properties with title:

• Charge Annexure
• Facility Agreement
• Charge instrument in Form 16A

For properties without a title:

• Power Attorney
• Deed of Assignment
• Facility Agreement
  

For those with a weaker financial background, banks may ask for additional security documents such as an assignment of rental proceeds, guarantors or charge over the fixed deposit.

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5. Prepayments

This occurs if you make an excess payment and your Letter of Offer will state what you are entitled to. 

For a Flexi Home Loan, your interest rate will decrease accordingly. For a Standard Home Loan, you have to check whether you are entitled to any benefits if you partially or fully settle the loan early. 

6. MRTA/MLTA

Housing insurance - and these two are the most common. You can choose to make them part of your loan if you wish. If applied through the bank, the Letter of Offer will state the amount and entitlement. 

And that’s it! The next steps after booking your unit are to prepare your documents for a loan application and await your Offer Letter. The above terms are some of the most commonly used terms you’ll find in it, so you can now pay attention to them when going through the terms and conditions with confidence.