Once again, to address the affordability issues of properties, MyFirst Home Scheme (My1st) was launched by government on 8th March 2011. Thanks for addressing the problem faced by young Malaysians working adults. But, does it really worth to even think about the scheme?
Of course, owning a house at young age is a good start to family planning. In fact, we're living in a society where buying a new house tights closely to starting a family. But, this is not necessary a MUST to everyone of us. We must do proper planning before committing for such a long-term loan with such huge amount. Buying a house is not buying an iPad or iPhone.
|Only apartments are likely with less than RM220,000 price tags in Klang Valley now|
Highlights of My First Home Scheme...
- For those earning less than RM3,000 monthly
- Working in private sector
- Confirmed employees with a minimum of 6 months in the job
- Joint applications are allowed (both in private sector and are family members)
- 100% loan financing for first house purchasing
- Eligible houses: Between RM100,000 and RM220,000
- Both under construction or completed properties
- Repayment period of up to 30 years
- Monthly loan repayment must be < 1/3 of applicants' monthly gross income
- 25 participating banks / financial institutions
Burning questions to participating banks...
- Does the participating banks offering the same rate as currently practiced?
- Does the banks really allocate sufficient funds for such loan?
- Would the bank perform stricter credit checks since many borrowers are young and categorized as higher risk group?
Burning questions to borrowers...
- Are there any houses out there you still think that is not overvalue? Still berbaloi?
- Assumed that you found one, does it fit into your desired picture? Safe surrounding?
- Assumed that you also found one, are you quick enough to snap it?
Assuming that loan rates as BLR-2.2% (BLR currently is 6.30%) and a 100% loan amount of RM220,000, the monthly loan repayment is RM1,063. If an eligible guy take the loan with maximum salary of RM3,000 allowed, the take home pay after EPF deduction was RM2,670 only. This translates into 40% of net income!
|Example calculations of monthly loan repayment|
Do not forget the legal fees, stamp duty, fire insurance, MRTA, cukai pintu, cukai tanah and renovations fees! I think most of our fresh graduates will buy a new car first. Assuming that the car loan installment is RM500 monthly, this would add up to 58% of net income!
To make trouble bigger, please take note of the changing interest rate environment, which means the BLR would possibly revised upward in the future. Then, your loan repayment will be adjusted higher accordingly. Can you afford your loan repayment then?