GIVEN a chance, most of us would want to purchase a house within a few years after securing our first job. However, shopping for your first dream home is actually easier said than done.
Upon selecting your preferred home unit, you will have to go through the process of securing home loan financing. This means that you have to look for a bank which can offer you the best margin of financing, with the best interest rate in the market.
Above all these, you must also be able to fork out the initial down payment for the house, which could easily lead to tens of thousands of ringgit. As house prices continue to rise, more Malaysians find it difficult to come up with the down payment.
There is a new homeownership solution offered by Maybank Islamic named #HouzKEY which aims to address those who are affected by the difficulties in buying their own home.
Key benefits of this new solution are many. First, you do not need to come up with the 10% downpayment, and second, you can lock-in today’s property price and purchase at lower than today’s property price from one year from now, and third, you can gain from market appreciation on the property based on future market value should you decide to sell to a third party.
The minimum requirements are very simple. The customer must not have more than one home financing at the point of application and he/she must have at least a minimum household gross income of RM5,000 and above. You can also bring along your family members as guarantors to support your financial assessment.
This effectively means that the #HouzKEY solution allows you to enter into homeownership with much ease and also buffer you from the ever-rising real estate inflation!
How is #HouzKEY different from the ordinary mortgage loan options in the market?
Under the #HouzKEY "no downpayment required" benefit, you only need to come up with three months rental as refundable security deposit when signing the lease agreement with the Bank and you can move into the home as soon as the completion date under this rent-to-own scheme.
Even the additional transactional costs associated with home purchase such as legal fees and stamp duty are not required to be paid by you upfront under this scheme, as it is already included in the monthly rental payment to ease your cash flow from the beginning.
Hence, the #HouzKEY scheme is expected to be more affordable at the outset compared to securing an ordinary mortgage financing. As per the calculations in the table below for a property valued at RM500,000, #HouzKEY is able to provide 100% margin of financing as well as embedding the initial incidental costs such legal fees, stamp duty on memorandum of transfers and lease agreements, etc into the financing portion to reduce upfront costs that you have to bear. Net position over the first five years shows that you can have cash savings of about 16% compared to mortgage financing as per table below.
On top of these, #HouzKEY’s renters will not be bogged down with long-term debt repayment. You can simply walk away from the contract, with zero penalty charges after five years rental period, if you are no longer interested to continue under the lease agreement. However, there is a better option than just walking away.
The scheme offers “Cash Out” benefit for renters who wish to terminate the lease agreement, after a minimum tenure of one year. Whereby Maybank allows flexibility for the customer to choose not to purchase the property and request the Bank to sell the property at market value, and 100% gains from the sale would belong to the customer (RM170,026 is the gains for the customer based on the same scenario as table 1, as depicted in table 2 below). The gains are based on the difference between the current market value of the house and its current option purchase price pre-agreed at Day 1.
For those who are thinking about capital appreciation of your respective house units, #HouzKEY provides this benefit throughout the whole tenure even without getting customer bogged down in a long term financing. Real Property Gain Tax is calculated from Day 1 of signing lease agreement, and based on the above scenario the customer is able to enjoy the gain tax-free.
As shared by managing director Sally Lye: “Through the novel #HouzKEY scheme, Maybank Islamic aims to alleviate concerns on securing a financing as normally experienced under traditional mode of financing, as well as to help Malaysians own their dream homes with much ease. We will help our customer get ready financially to move to a mortgage based on their preferred timing.
"The scheme was launched in November last year for Maybank staff and recently in mid-January to the public, and we have received an overwhelming response from the public. Currently, the scheme covers 13 developers, with 25 projects in its portfolio. We are working hard to bring on-board more residential developments that are diversified to meet the customers’ demand in the near future."
With higher expectation on customer experience in this digital era, the bank has enabled #HouzKEY applications to be entirely on a digital platform where applicants will also get their results within just one working day.
For more information, go to www.maybank2own.com.
This article is brought to you by Maybank.