Tuesday, January 29, 2008

The Whole Housebuying Process...

Yes.

I am so glad we made this decision when we are both young and child-less.

I can't imagine going thru this process when I am in my 40-ish, or 50-ish.

I'd die before I even step inside that house.

The agony my heart went thru when dealing with lawyers.

My headache last until today!

Atttention aspiring house owners - I have 2 useful tips to share with you all:

1. When dealing with lawyers, make sure you only believe 10-20% of what they say (unless you know them for years or they are your friends / family)
2. Make sure you do a thorough study of all the process and procedures of buying a house / securing loans / withdrawing EPF before you actually proceed to sign anything.

This is a true story of a friend of a friend:

She and her fiance are getting married. So they decided to buy a house. They applied for housing loan. Soon, they were approached by a man at the showhouse unit who claimed he was a lawyer who could help them to manage the whole house-buying process. He wanted to charge them RM10k for 'legal charges'. Without thinking, the then-happy couple borrowed RM10k from relatives, siblings etc. They thought this is part of the buying process. They met up with the 'lawyer' at a coffeeshop and gave him the money. Guess what happened after that? Yup, the 'lawyer' and their borrowed money were gone with the wind. They tried to call him, but he didn't answer. They went looking for him at the address on his business card - the office is just a block of empty shophouses. When they realized that they were cheated, the girl spent days crying in her room. She did not think that she want to go ahead with the wedding. I'm not sure whether she has changed her mind since then.

So you see, doing a thorough research before committing to anything is extremely important. If you don't know, check with relatives / friends who have gone through the process. Look up the guideline for homebuyers in Ministry of Housing and Local Government's website (www.kpkt.gov.my) which is a detailed and great reference. To check for competitive housing loans in the market and how to get a loan package that suits your requirement, you can also log on to www.bankinginfo.com.my.

Anyway, this is a summary of the process that Suami Terchenta and I had to go through to own our home sweet home:

1. We went to look at the show unit, paid booking fee (which is part of the downpayment) of RM100. The developer then issued a receipt (or you must ask for the receipt!)
2. Surveyed housing loan packages offered (usually you can find bank loan brochures at the show unit) and picked one.
3. We filled up loan application form. At this point, we were required to submit photocopies of our IC, latest 3 months' salary slip, latest income tax or EA form, latest six months' bank account statement, and the booking receipt (that's why you have to get the receipt)
4. Upon loan approval, we had to sign a few copies of letter of offer from the bank.
5. The bank informed the developer that our loan request has been approved, we then proceeded to sign the Sale & Purchase (S&P) agreement and Deed of Mutual Covenants. Before we can sign the SPA, we had to pay the downpayment as well as the disbursement fee (to pay for documentations to the developer's lawyer).
6. We proceeded to sign transfer of power document which basically means that as long as we have not fully paid our loan, the bank has the power over our house, including to sell it off in auction. This is done at the bank's attorney office. Oh, and the legal charges? Cost our arms and legs. We had to give the original copies of the S&P and the Deed to the bank's lawyer for the bank to proceed payment release.
7. We went to Kepong to settle our MRTA (Mortgage Reducing Term Assurance) policy -- you are required to apply for MRTA when buying a house. This policy is to cover the repayment of outstanding loan in the event of death / disability / critical illness of the borrower. The older your age at the time of applying this policy, the more expensive it is. So buy your house while you're still young.
8. Last but not least, we then made copies of our copy of S&P, the offer letter, IC and bank book, filled up EPF form and submitted all these to the EPF. People advised us that it is best to submit our EPF form at the their HQ in Jalan Raja Laut, as the withdrawal process is faster. We just have to wait...

It is also very important that we chase the appointed lawyers to submit or process several documents especially when the developer starts sending invoices for progressive payments. Oh, the hassles! All have to be done within 21 working days only or we have to pay 10% interest!

Please take note that you also need to have a bit of savings (more or less the amount needed for your wedding) before you actually decide to buy the house, to pay for downpayment and various fees the developer / bank charged along the way. Believe us, we are so broke now (tapi still ada hati nak pergi ke KK! Hahaha! That's called the power of credit card!) Again, climb Mount Kinabalu while you're still young & able! :p