before getting a house loan :
- affaordable loan repayment is 1/3 from salary @ 33%
- 30% for housing loan + 20% for non-mortgage loans ,
so maximum is 50% from salary just to pay loans.
- reserve. at least 3 months salary in cash for emergency
- Look for flexibility ( flexi ) loan instead of just loan with low interest.
pay extra per month with the flexi loan to reduce the interest and principal
- look for syariah compliance Al Bai Bithaman Ajil but with flexi scheme
instead of fixed payment monthly.
the key is to pay more , and pay early .
- pay as soon as loan approved , even before maturity period.
- pay extra per month , to reduce the principal faster.
instead of RM1000 per month , pay RM1100 monthly.
loan period will reduce from 20 years to 15.5 years
* not an actual figure , just to put things into perspective
- pay on two-weekly basis. split the monthly amount into two ,
then pay every two weeks.
because in a year , there are 12 months , but 26 of two-weeks
instead of 24 . so we pay 26 times instead 24 times a year , making
the principal reduce faster.
- pay extra when we get extra money e.g bonus.
save at least 10% from extra income to pay house debt
- withdraw from account 2 KWSP to pay house loan
- maintain the same amount of payment even though
the interest rate has reduced.
- increase repayment amount when salary increases.
maintain a 30% ratio from salary for housing loan.
why pay more and pay early ?
" when the interest part of the loan repayment has been paid ,
any extra amount paid will reduce the principal for that month.
subsequently the lesser pricipal leads to lesser interest for
the next payment "