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RUMAWIP FULL FINANCING OPTIONS

This information is as of 10th October 2023.

This professional analysis focuses on full home financing for RUMAWIP called SJKP loan offered by 3 banks:

RHB 100% FINANCING

Maybank 100% FINANCING (main player in RUMAWIP financing). These banks provide full financing options for individuals seeking to purchase a home.

MBSB 100% FINANCING (least preferred option)

Applicants must not earn above a gross of RM 11,000 or joint income (spouse) RM 22,000 (Individual who earn more than RM 11,000 and after combine with spouse end up with the total income of less than RM 22,000 IS NOT ELIGIBLE)

RHB

RHB Bank offers a housing loan with an interest rate of 4.6%. This rate remains constant throughout the loan tenure. RHB’s debt service ratio has a maximum limit of 65% (T&C must have nett disposable income of RM 800, in other words money left after servicing all loan including the one you are applying). The debt service ratio is a crucial factor as it determines the percentage of an individual’s monthly nett income (after deducting EPF & SOCSO) that can be allocated towards debt repayments. RHB Bank’s maximum debt service ratio of 65% implies that the borrower’s total monthly debt payments, including the housing loan you are applying, should not exceed 65% of their monthly income. Kindly be aware that variable income will be recognise as 50% net amount only. As for full commission earner; it’s either recognise at 50% or 80% of the nett amount of the commission earned. Lock in period 3 years. (early settlement will have penalty). If selected loan is under Conventional and NOT Islamic; it is a full flexi loan (individual is able to deposit and withdraw advance payment)

For example

Commission earned recognized as 80% when monthly differences not more than 30%

Latest 6 months commision earned (sample for 80% income recognition)

RM 7,000
RM 7,300
RM 7,500
RM 6,990
RM 7,250
RM 7,800

TOTAL RM 43,840 divide by 6 (months) = RM 7306.6 X 80% = RM 5845 is the recognized nett income.

Latest 6 months commission earned (sample for 50% income recognition)

RM 7,000
RM 3,500
RM 7,200
RM 7,800
RM 7,500
RM 7,700

TOTAL RM 40,700 DIVIDE BY 6 (months) = RM 6783.3 x 50% = RM 3391.66 is the recognized nett income.

Maybank

Maybank provides a housing loan with interest rates ranging from 4.25% to 4.5%. The specific interest rate offered may vary based on factors such as the loan amount, tenure, and the borrower’s creditworthiness. Maybank allow a maximum debt service ratio of 60%. This indicates that the borrower’s total monthly debt payments, including the housing loan, should not exceed 60% of their monthly nett income. Maybank recognise all variable income at 70% (latest 6 months average) & take in share margin account into DSR calculation (the mechanism can’t be obtain). Zero lock in period. Non flexi loan (Individual is allow to pay extra to save on interest but won’t be able to withdraw it out again)

You may want to read more about DSR (debt service ratio) HERE

MBSB

MBSB term financing interest rates for RUMAWIP is 4.65% (as of 6th Sept 2023). DSR set at the maximum of 80% with condition of NDI per applicant of RM 1000 (Nett Disposable Income or in simple term, the left over cash after all loan payment is made inclusive of the current application instalment). Tenure of financing is limit to only 30 years and up to age 70. Variable income recognition is at 60% (latest 6 months average) but capped max at 20% of fixed gross income (salary before deduction of EPF & SOCSO). For example, if the individual salary is RM 3000; no matter how much commission that person has earned for the last 6 months; the variable income recognition will be capped at RM600. Advance payment to principal is allow; but individual need to inform bank 1 MONTH IN ADVANCE! Lastly the lock in period is 5 years.

Please take note that individual banks have their own scoring system which play factor before approving a loan application; this I won’t be able to find out. (For example, during the covid lockdown, loan applicants from the airline industry will most probably be rejected)

Summary

RHB Housing Loan

Pros

Higher DSR of 65% for loan approval (NDI RM 800 & above)

Slight chance of recognition of variable income up to 80%

Conventional loan option is full flexi

Cons

Most probably higher interest rates

Lock in period of 3 years

Variable income recognition may go as low as 50% only

Islamic loan is semi flexi (can’t withdraw advance payment made)

Maybank Housing Loan

Pros

Most probably lower interest rates (as low as 4.25%)

No lock in period

Standardised recognition of variable income of 70%

Maybank is offering a better package for SKJP loan (in term of financing rates) as of 6th September 2023.

Cons

Loan approval subject to DSR of 60% only (please take not that due to the lower interest rates, DSR outcome will be lower too)

Term Loan which allow advance payment of principal to save on interest (need to inform bank via phone call to branch or walk in after payment made)

MBSB Housing Loan

Pros

Easy Approval – DSR allow up to 80% (benefit income earner of RM 4000 & above due to prerequisite of NDI of RM 1000 per applicant). Most applicant of RUMAWIP usually have taken up a car loan.

Cons

High Interest Rates 4.65%

Advance payment to principal requires 1 months notice to bank.

Max Tenure of 30 years (normally 35 years)

Lock in period of 5 years

Elijah is an esteemed real estate agent who has dedicated his expertise to the RUMAWIP program since 2018. With a reputation for unwavering honesty, he navigates the real estate landscape with straightforwardness and analytical insight. Alongside his role as a real estate agent, Elijah shines as a marketing consultant, collaborating closely with RUMAWIP developers. His dual perspective and commitment to affordability make him a trusted figure in the industry, consistently guiding clients and stakeholders toward informed decisions and successful outcomes.

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