A Personal Finance Blog for Malaysian: New rule from Bank Negara to cool property market, on loan for 3rd house.

Thursday, November 4, 2010

New rule from Bank Negara to cool property market, on loan for 3rd house.

New rules to cool property speculation

国行:即日起生效 第三房贷顶限70% 


Lets analyse this.

If you are buying 3rd house with loan, you may be caught by the LTV (Loan-To-Value) of 70%.

Example:
Seller asking for RM105
Final agreed price RM100
However, bank's valuer give only RM90
Based on LTV of 70%, max loan you can if only RM63
Therefore, you still need to pay cash upfront of RM37 (effectively 37% on the Purchase Price)

Can a potential speculator (aggressive property investor) overcome this issue?

Mortgages For Dummies, 3rd Edition

Home Buying For Dummies, 4th Edition

Reverse Mortgages For Dummies