Abstract:
Studies reveal that the effect of subprime mortgage crisis on Malaysia mortgage market and the economy as a whole was not much. The reason can be attributed to the fact that the country has a sound current account surplus, inflow of capital is strong, foreign reserves and liquidity.
Buying property in Malaysia may not be very troublesome in this part of the world. Varied types of establishments are available for an individual contemplating purchase of property. Sale of property is generally conducted by real estate agents. With regard to the foreigners, as much as 60% of purchase price is made available to the foreigners provided the value of property equals RM250,000 or more.
There are many loan program available in Malaysia but the success of the program depends on the capability to recognize as to which loan is best suited for an individual. The different categories of Malaysia mortgage loans are:
- ARM loans
- Fixed rate loans
When applying for a loan program there are many factors, which are required to be kept in mind. They are as follows:
- Information related to stability in family
- Information pertaining to pre payment penalty
- Details of liquid assets
- Details, if the individual is self employed
- Employment details
- Plans after retirement.
There are many such details, which need to be furnished prior to applying for loans.
However, it has been noticed that mortgage rate, which is fixed is the most beneficial. An ARM mortgage loan may prove to be beneficial only for so long as the fixed rate is applicable on the mortgage loans. Usually the fixed rate is applied for a period ranging from a year to 5 years. These categories of loans also have comparatively low rates of interest. Nevertheless, very few people opt for this type of mortgage loans in Malaysia because, it becomes uncertain after the fixed rate gets over on the mortgage loan after a stipulated period of time. In case of fixed rate mortgages or FRMs, the tenure of a loan is a year to 3 years.
Malaysia mortgage market offers ARM or adjustable rate mortgages for a duration of not more than 30 years.