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Back |
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| MAA Mortgage Care
Loan
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| Mortgage Care Loans (MCL) has features such as
revolving credit and redraws which can assist you manage cashflow. The loan
tenure of MCL is also longer than other financial institutions making the loan
more affordable in terms of monthly instalment payments.
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| Product
Features |
MCL consists of a Term Loan facility and Revolving Credit facility. The term
loan operates like a normal term loan but with an added advantage that
borrowers are allowed to have a loan tenure up to age 80. In addition Borrowers
are permitted to redraw up to the principal balances in the original term loan
schedule.
The revolving credit operates like an overdraft account where customers have
the option to service the interest component only. The revolving credit account
also acts as a payment gateway for the entire MCL facility where installment
payments are made. While the maximum tenure on the term loan portion of MCL is
up to age 80 and the maximum tenure of the revolving credit portion is up to
age 100. In most cases, Borrowers over the age of 65 are considered not
eligible for credit.
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| What's good
about it? |
The most compelling feature of MCL is its long tenure
that extends well into a borrower’s retirement. Hence, MCL positions itself as
a Lender that recognizes that we all need to keep spending after we retire and
that during our working years, a lot of our income goes into mortgage
repayments, leaving little to save for retirement. MCL allows the Borrower to
re-use what he/she has paid into the loan during the retirement years.
Does that mean that a Borrower will never clear the loan repayment? MCL
encourages that Borrowers take up a corresponding insurance policy that will
clear whatever is outstanding in MCL upon the Borrower’s passing in the old
age. Added advantage is that a Borrower need not buy any new insurance from MAA
if he/she is able to assign an existing policy from any insurer to the Lender.
Another advantage of a longer tenure is lower monthly repayments. Lower monthly
payments allow you to have additional cash to spend or save.
The second advantage of MCL is that this loan does not bind borrowers to a
certain lock-in period where a fee or percentage of loan penalty is charged to
the borrower if the borrower prepays or settles the principal outstanding.
Therefore this loan is suitable for investors or those intending to settle the
loan early by selling house with spare cash or by selling the property.
The revolving credit line acts like a bank overdraft and provides additional
credit as and when you require. The benefit of this revolving credit line is
that for a monthly fee of RM20.00 per month and no other commitment fee, you
can withdraw and payback into the account to manage your cashflow and you can
opt to service interest of the facility only.
Additionally, since term loan installment payments are debited from the
revolving credit line, a borrower can theoretically take a payment holiday
provided that he or she has available credit in the revolving credit line.
Under MCL, the upfront costs associated with a Mortgage Reducing Term Assurance
(MRTA) is not necessary. The product is built with a monthly premium group
insurance plan but this is not compulsory. Whilst insurance is not compulsory,
MAA often impose a condition that borrowers purchase a life insurance policy or
pledge an existing life insurance policy for part or all of the loan amounts.
The benefit of purchasing especially an endowment-type of life insurance
policy, is it is also a savings instrument which could assist you to settle
part or all of your loan in future.
An added feature in MCL’s revolving credit facility is for a small fee of
RM2.00 per transaction, customers can opt for standing instructions to make
adhoc or fixed monthly payments to external parties for example monthly
payments for your Astro bill. |
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| Limitation |
This loan is not for those who want a simple and
straightforward loan where borrowers make monthly installment payments in a
definite loan schedule. To use this loan properly, a borrower should monitor
their loan balances, particularly in the revolving credit account to make use
of the available credit yet manage the interest charged.
MCL also has slightly higher interest rates. Whilst variable rate loans go as
low as BLR-1.9% (current effective rate of 4.85%), MCL rates are KLIBOR+3.15%
(current effective rate of 6.76%) on its term loan facility and KLIBOR+4.15%
(current effective rate of 7.76%) on its revolving credit facility.
Additionally, the longer tenure could mean that in the long run, you pay more
cumulative interest.
MCL does not come with a non-ZEC option. A 1.25% of the total of the term loan
and revolving credit limits is charged and payable upon signing of letter of
offer. This fee covers the scheduled legal and valuation fees for the loan but
customers still have to bear legal and valuation disbursement and service tax.
Occasionally and depending on strength of the applicant a partial or full
waiver of this fee can be offered.
This loan is for residential property only. Additionally, as MAA is not a bank,
a borrower cannot issue cheques to withdraw money from the revolving credit
account. A special request has to be made by fax to the Mortgage Loans
department and monies will be transferred by direct debit into borrowers’ bank
accounts or a banker’s cheque will be issued. Payment into MCL is also less
convenient than banks with Internet banking or many branches as currently, MCL
payments can only be made by direct debit through a bank account, by cheque to
MAA’s head office or by cash or cheque to MAA’s MCL partner bank Deutsche Bank.
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| Other
Conditions |
| The minimum loan amount for this loan is RM200,000.00
and it is limited to properties in the Klang valley. Maximum margin of finance
is 90%. Insurance on MCL is not compulsory but preferred. MCL interest rates
are KLIBOR+3.15% (current effective rate of 6.76%) on its term loan facility
and KLIBOR+4.15% (current effective rate of 7.76%) on its revolving credit
facility.
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Disclaimer All home loans, features, charges, benefits and
other information listed here represent the most recent information
available at the time of writing. Every effort is made to keep the site
accurate, however we cannot guarantee that a lender has not increased or
decreased one or more of the home loan rates or fees/charges
associated with a loan deal or changed its features, obligations or benefits. |
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