It’s always sounds good to be true, if some one can get 100% loan, without come out with a cent to buy a property !! But believe it or not, there are many buyers or investor are practicing this, and benefit from it!! Of course secretly~~
Normally, there are few reasons why buyer looking for 100% loan , or others call it as Full Loan!
- Difficulties to come out with 10% Down Payment, but they still prefer to purchase their own property rather then keep renting, and serving installment for house owner.
- Buyer has only prepared 10% Down Payment for the property, but lack of fund for renovation, Full Loan will save them 10%, so they can at least touch up the house before move in.
- For Investor, who wishes to take up Full Loan, so they can leverage more on Bank Loan, and buying more units!! Make more money from Property Investments!!
Essentially, Key point of getting 100% loan or even higher finance margin, is depends on the Bank Value of the Property, the more difference between the Bank Value and real transaction price, the more likely one can get 100% loan.
Here is how the calculation looks like:
For example, if you are looking to buy a property, which price at RM500,000, in order to get 100% loan, you have to make sure that the Bank Value of the said property is at least RM560,000. You can request owner to mark up the Sales and Purchase(SPA) Price to RM560,000. If you are eligible for 90% loan, bank will lend you loan amount of RM504,000, you still have extra RM4,000 to pay for part of Stamp duty.
If you are targeting for Margin of Finance more then 100%, then you have to make sure the Bank Value can go higher. Lets say, if Bank Value of said property can hike up to RM600,000, probably you can ask to mark up SPA price to RM600,000, so you can have extra RM40,000 in hand.
But….But…..But…..In the first place, why should owner agree with the 100% loan, IF there is no benefit for him/her at all?! Well, to enjoy the 100% loan, the property shall not be in a HOT area, which owner was normally spoilt by market. Or the timing shall be Buyer’s Market, which buyer is the Caller in the market. Another key point, owner shall not be entitled to pay Real Property Gain Tax (RPGT, tax payable if the property bought less then 5 years), whereby mark up on SPA price will incurred more tax to be paid out by owner.
Here is another way, if you are 1st time home buyer, monthly income less then RM5,000, and property price less then RM500,000, you are eligible for My First Home Scheme, refer HERE for details.
P/S: Even though we called it as Full Loan, most of the time, buyer still have to come out with minimal cash, to pay for SPA legal fees and Stamp Duty.