Mortgage Loan Process
The table list below is the Loan Process
|2||Engage Mortgage Consultant|
|3||Check eligibility and Property valuation|
|4||Sign Booking Form|
|5||Sign letter offer|
|6||Letter instruction send to lawyer and valuer|
|7||client signed loan agreement with lawyer|
|8||valuer site visit on the unit|
|9||Lawyer then send loan agreement to the bank|
|10||lawyer then send loan agreement to land office for stamping|
|11||lawyer retrieve redemption letter from past bank|
|12||first disbursement happens|
|13||transfer of name occurred|
|14||2nd disbursement occurs|
|15||Vacant Possession receive|
Financing is a big complex jargon for everyone! Anyone whom purchase houses from borrowing process until vacant possession (Able to move in to new home) will have lots of hurdle need to gallop over, before they could finally have a piece of mind sleeping in their new home.
Here I am going to explain in depth details of the whole process from A-Z, because we are Mr Mortgage crew, and we like to share every nitty gritty details of Mortgage loan (Housing loan) Financing to the netizens out there!
Here We Go!
SEARCH for PROPERTY
1. You wished to purchase new property which is subsales (second hand house) whereby, the first thing you need to do is looking for a property first!
Go through www.Iproperty.com.my or any other websites or find a reputable agents to help you search for your dream House.
Then you will sign booking form with the seller to book the property you intend to purchase.
ENGAGE MORTGAGE CONSULTANT
2. Next, you will need a banker / mortgage consultant to help you with the loan. They will provide a professional service by assessing your profile, jotting down your incomes, debts and screening through CCRIS and CTOS, so to calculate your max loan eligibility. When your loan eligibility matches the loan you want to finance 90% with the property, you are good to start with the journey to the wild wild west!
This is an important stage, you need to get your profile due diligen done on whether bank could finance this property loan amount, before proceeding with any property signing. Else, without ensuring your profile eligible for this loan amount, there’ no reason to proceed with the purchase.
Mortgage consultant will provide a dude diligence on the profile and restructuring the debts if it needs to be done, in order for your profile to be accepted.
Check eligibility and Property valuation
3. For subsales (second hand house, purchases form seller)
Mortgage consultant/ Broker will help you check the property market value first, property must match the market value valued so to avoid overstating of the property selling price. Mortgage consultant / Broker will check your value via bank panel valuers to match the value. if it’s undervalue, buyer need to top up the outstanding amount.
| Property A selling at RM500K|
Valuation from bank panel valuer is around RM400K market valuation
Hence, bank could only finance on RM400K, 90%. Which is RM360,000 loan amount.
Buyer need to top up (RM500K – RM360K) RM140K to purchase this property, if selling at RM500,000.
Hence you could see the crucial in getting the valuation check first before proceeding with the purchase
Developer unit ( purchase from developer )
There’s no valuation checking needed for this, as the value definitely match. When developer sell their units to buyer, developer needs to search for bank financing for their project. When bank panel the project means financing the project unit, bank will do evaluation and due diligent on the project before deciding to finance the project.
Learn more about Valuation of property Here
Sign Booking Form
4. Before loan submission, Mortgage consultant/ Broker will meet up with you to discuss with you regarding the financing packages option, such as (SEMI or Full flexi, financing legal fees, loan tenure, lawyer, islamic or conventional etc). After signing the bank submission form, your loan will be submitted to bank. Then you are safe to sign the booking form with the seller. It could be wise versa.
Sign letter offer
5. Loan approval usually waiting time between 4-15 days. You will receive call from mortgage consultant/broker that your loan accepted and letter offer is prepared. You will need to sign the letter offer in agreement to take the bank’s loan offer, do check properly the stated package provided before signing letter offer.
Letter offer will be delivered to the bank HQ credit department for processing, in between lawyer will receive copy of the letter offer, title and SPA from mortgage consultant, so that lawyer can prepare loan agreement.
Letter instruction send to lawyer and valuer
6. Then on, bank will send out letter of instruction to the lawyer and valuer to give authority for them handling your case on your behalf.
Client signed loan agreement with lawyer
7. You will set a time with appointed lawyer to sign Loan agreement and the Sales Purchase Agreement once it is ready.
Read about the cost of the legal fees HERE
Valuer site visit on the unit
8. Valuer will give you a call for site visitation on the property that you intend to purchase, so that the property is in good shape with proper valuation report done. Valuer will submit the document to bank for banks further processing.
9 & 10. Lawyer will then send the loan document to the bank and SPA document tp land office for stamping and adjudication.
Learn more about Lawyer process HERE
Lawyer retrieve redemption letter from past bank
11. Subsales that still under bank financing
While in the meantime, lawyer will receive Redemption letter from previous seller bank to show the amount of outstanding owed by the seller, then bank can take over the correct outstanding amount to your current financing bank.
No such process required.
First disbursement happens
12. Subsales that still under bank financing
When bank confirm the amount owed by seller to previous bank financing, current bank will proceed with first disbursement (Money) will be released to the previous bank in 1-2 months time. To take over the outstanding amount from previous bank.
No such process required
Transfer of Ownership
Transfer of title ownership will be done by the lawyer to change the seller name to current new buyer ownership, after land office stamping and approval. Then Memonrandum of transfer (MOT) will be occured, you would need to pay for MOT fees.
2nd disbursement occurs
14. After the title has been successfully transferred, 2nd disbursement will be released to the seller in 1-2 months time. Means, the seller will receive the cash from their net sales from your current financing bank.
15. Hence the whole process will take 3-4months or less, if there’s no complication! Acquiring a house sounds easy, but the back end process is quite tedious and need focal attention thoroughly. Now with VP, you can get your key from the lawyer and enter your new dream house!
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