Home Property Top 5 Residential Finance Questions of Home Buyers

Top 5 Residential Finance Questions of Home Buyers


No matter who you are and where you live, a home is a basic requirement and a necessity for life. Sadly, no necessity is available free of cost. If you want to buy a home, you need a home loan to finance the purchase. Don’t think applying for residential financing is difficult. It can be very simple after you finish this article. This article also includes the answer to the most common questions asked by home buyers.

① What Type of Residential Finance is suit/ available to you?

Today there are several types of loans in the field of residential finance.

• Owner Occupied Residential Purchase

• Residential Investment Purchase

• First-Time Home Buyer

• Renovations, Extensions and Construction Purposes

• Refinance of your Existing Loan

• Debt Consolidation of your Existing Home Loan Debts

• Home-Equity/Cash Out purpose

• Restructure your Home Loans with Current Lenders/Credit Providers

What are Features of Residential Finance?

Each lender/credit provider offers different interest rates and finance/loan conditions. Residential loan packages often incorporate many of the following options and features for you to consider:

• Variable or Fixed Rate Loans

• Interest Only or Principal & Interest Loans

• Combination (Split Loans)

• Line of Credit

• Offset Account

• Impaired Credit History

• Redraw Option and Access Availability

• Non-Conforming Loans

③ What is Home Equity/Cash Out? How can it benefit you?

A Home Equity/Cash Out can unlock relatively large amounts of money for borrowers who want to borrow against the value of their home or property. More and more consumers are finding this type of finance arrangement to be very attractive. Such loan programs are very easy to qualify.

The concept of how Home Equity/Cash Out works for you is best explained by the following illustration. The illustration also assumes that you have an existing residential finance loan on your home or property:

The value of your home or property is valued at: RM 800,000

Less Your current home loan balance owing: RM 350,000

Your home equity amount is: RM 450,000

From the example illustrated above you can clearly see that you have RM 450,000 equity in your home or property, which you can use to:

• Buy your second or third investment property

• Invest in shares or managed funds

• Renovate, remodel, or otherwise improve your existing home and property

• Purchase vacant land and construct a new home on the vacant land

④ Why Pre-Approval is better in Residential Finance?

With a pre-approval, you will have the peace of mind knowing that:

• You have a clear picture of what your borrowing limits are

• Your finance request has already been pre-approved and you will know the conditions of your pre-approval

• You have the upper hand when negotiating the sale price with the vendor, real estate agents, etc.

⑤ How to get Lower Rates on Residential Finance?

Getting lower rates on home loans is very simple. Take help of the internet. There are many online companies that provide residential finance opportunities. Because of heightened competition in the financing market, lower interest rates are offered. Also, web companies offer faster approval because of their online nature of business.

So, these are the questions that often trouble other home buyers. But, now that you have answers to them, finding an affordable residential loan will be easy for you.

—WMA Property