The mansion fiasco

Once upon a time in a land famous for its white coffee and pomelo, live a rich old man who earns his fortune selling taugeh chicken rice. He owns a big and luxury mansion where his two wives and two sons live in with him.

The eldest son, N, is smart and hard working while the other, Z, only love to spend time and money into gambling and girls. The rich old man had always mentioned that he wanted N to inherit his fortune. Then one unfortunate day, the old man had a heart attack and he pass away. He left the world without leaving a proper will.

Now, both N (son of the first wife) and Z (son of second wife) had never been on a good term. And so after the death of their father, both start fighting for the rights to the mansion. Initially N, being the son of the first wife and the eldest, assume control of the house and the family business.

But then one fine day Z suddenly rushed into the house and declared that he should be the rightful owner. He told everyone in the house that he had a dream the night before. In the dream, the dead father told Z that he wanted to pass his fortune to him. And so Z happily took control of everything and get his dogs to chased N out of the house.

N is of course not happy. He took the case to the court. At the trial, court found that N is the one who has the right to the fortune, not Z, as it was well known before the old man died that he wanted N to inherit his fortune.

But Z was not prepared to give up easily. So he appealed to the decision of the court. And not only does he makes an appeal, he also apply to the court that he be given the right to the fortune until a decision is made at the appeal. Court says ok. So for the time being, Z maintain control of the mansion and the family business.

As for now, everyone will have to wait till court of appeal comes out with a decision. Who is going to win in the end? Who do u want to win? N or Z? Why can't they allow sms voting to decide on the issue? Haih......

High time to refinance your loan?

"Two years ago, banks were charging home buyers base lending rate (BLR) 'plus' interest rates for their housing loans.

Today, the BLR for mortgages has fallen to a 'minus' level. In addition, then, the average BLR was about 6.75% which was later adjusted to about 5.55% currently."

The competitiveness in housing loan sector among banks has created a situation where the interest are so much more lower than what it used to be just more than 2 years ago. Read the statement above. It was taken out of an article from StarBiz (read the full article here).

To those of you who has taken a housing loan more than 2 years ago and you are still servicing the loan, you should really just go to your bank and tell them you want to refinance your loan. However, it may be difficult to make a choice on how to make the best deal out of the favourable condition of the housing loan market out there. To make things easier, I have made some simple guideline.

• If you are out of your lock-in period and are have principal balance of more than RM200K.

You are in the best position of all. There are so many interestingly low rates out there for you to choose from. Banks offer rates that are as low as BLR – 2.2%. But you should also look at loan provided by insurance companies where the interest rates are fixed, i.e. it does not depend on BLR. I heard that they are offering as low as 4+% for the whole tenure of loan which is very very low.

• If you are out of your lock-in period and are have principal balance of more than RM100K.

You are in a position where you can choose the bank which offers you the lowest interest rates. You do not have to pay any compensation for your existing loan and all banks are giving out loan with zero-moving cost. That means you do not have to pay any fees in getting the loan, saving you many thousands in legal and other costs.

• If you are out of your lock-in period and have principal balance of less than RM100K but your house is worth more than RM100K.

Most banks do not give out loan with zero-moving cost if the loan amount is less than RM100K. In this situation, you should consider refinancing with a loan amount of at least RM100K. I know many people do not want to owe banks more than they already have after paying so much interest to the banks in the past. However, do not worry about paying more interest to the banks that you have to because you could get a loan with a flexi account. To put it simply, lets say you have a principal balance of RM80K. You get a new loan for RM100K, u will have extra RM20K of cash. Just put the RM20K in the flexi account. The RM20K will reduce your principal amount to RM80K. You pay interest for just the RM80K, just like your previous loan but with a lower interest rate and the best thing is you can use the RM20K you have in the account in case u need the money.

• If you are still in your lock-in period.

In this situation, you can negotiate with your bank to get a lower rate. They will give you a better rate though it will not be the same as the market rate. Or else you will have to compensate them to save more in the long run.

So go and make a better deal for yourself now. Do not let the banks earn more of your hard earned money than they already are.