My home loan is blowing my finances! Help!!

15 01 2010

Whether you REALIZE this or not, MHL is still going to make this solid statement. Don’t worry if you don’t know, or you’re just a newcomer. We’ll help you sort things out. Seriously, it’s time to face the ultimate groundbreaking, heart-stopping, mind boggling, head smacking TRUTH. This statement do not apply to ALL the home loans out there, but to the common ones, this is it.

For your outstanding balance vs year chart of your home loan, you’re may be bounded to pay interest of more than 100% of your loan capital.

Meaning to say, if your home loan is RM100, you’re may just be paying more than RM100 of interest. Total sum = RM200++. And if this is going to knock you down and demotivate you, please, do not commit suicide. There are other ways of going around this problem.

Several of our favorite responses include:

1. “Don’t try to sell me la, brother.”
2. “What!?”
3. “This statement does not apply to OUR bank’s home loan. Let’s take a look at Bank X’s catalog…”
4. *Turns green, went green, and never saw his face again*

MHL does NOT make money by lying to her consumers. Honestly, we’re just making you realize of monetary facts and showing you opportunities around the problem that many people face.

Refinancing could be just the right option for you, we might say. Let’s take a simple calculation to further strengthen our stand:

After an outstanding loan of 5 years, you still have: RM230,963.00

1. Before Refinancing
1. Interest Rate: 300 months, BLR + 0.25% = 7%
2. Single installment payout: RM 1,662.44
3. Total interest paid: RM233,412.35
2. After Refinancing
1. Interest Rate
1. First 36 months, 5.25%
2. Thereafter: 5.15%
2. Single installment paid: RM1,370.45
3. Total interest paid: RM178,830.68
4. You save: RM54,581

Wah liao eh. Serious or not?

Refinancing may not be the best option for some people, due to the fact that:

1. They have a spending problem.
They spend way too much; disallowing them from making necessary payments at the beginning of each month.
2. They may just extend their loan tenure.
If you paid your home loan for 25 years already, what are you refinancing for? Do you want to add that small amount to another 20 years of your life? Forget it.
3. They borrowed more than 90% of the home’s value.
If their home loan is below 80%, it makes sense. Otherwise, forget it.
4. Cashing out of their refinance.
Honestly, cashing out is their thing, because they see money. They may just end up paying longer.

Does it make sense at all for you?
(You only have to pay your phone bill lah..)




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