You may be wondering how much salary to buy a house in Malaysia in the current financial and economic situation. Basically, the first home buying process with a small salary such as RM1,500 can be made if done properly. This article will help you to identify how to buy a home and tips you can practice to buy your first home.
Buy a Home with RM1500 Salary: Home Loan Through Housing Credit Guarantee Scheme (HCGC)
If you are not a civil servant who can enjoy the LPPSA Housing Loan Scheme and you do not have a fixed job or have a small salary with a minimum gross income of RM1,000 a month without a pay slip, you can consider housing loans through Housing Credit Guarantee Berhad. Malaysians, especially the B40 and M40, can now have their own homes as the government is ready to help facilitate housing loans through the Housing Credit Berhad (SJKP).
3 Things About Housing Credit Guarantee Scheme You Need to Know
What is the Housing Credit Guarantee Scheme (SJKP)? Basically, the SJKP is a financing scheme aimed at helping those who do not have fixed income such as gig and free economic workers, business owners, traders or small entrepreneurs own their own homes. It allows Malaysians such as fishermen, farmers, small traders, taxi drivers and other jobs to apply for a first home of up to RM300,000 with a financing period of up to 35 years or a 65-year-old borrower.
In general, all Malaysians who do not have a permanent income are eligible to apply for this financing scheme. The following are the eligibility requirements set by the Government to qualify you to apply for this scheme:
- Malaysian citizens aged 18 and above (Joint loan allowed);
- Purchase of a new home or a subsale or the first auction house in a low or medium -cost home category, or affordable housing for your own home;
- Open to new homes, Under construction houses, subsale or auction houses;
- The total refund for all applicants’ loans does not exceed 65 percent of the monthly gross income;
- No CCRIS records outstanding (over two months for the latest 12 months) as well as other negative credit records within 24 months.
2. Documents are required
To facilitate your application process, the following is a document required to apply for a Housing Credit Guarantee Scheme:
- Original Sale Purchase Agreement/Home Downpayment/Receipt Form;
- Statement of Bank Account or Deposit Fixed Sixth Month (if any);
- Income Tax Statement/Latest EPF Statement;
- Job confirmation letter;
- Copy of Applicant’s Identity Card;
- Employer confirmation letter (if any);
- Business license; or fisherman registration card; or taxi permit (any relevant);
- Self -employment letter or income statement certified by JKKK or Category A Government Servant, Head/Village Head or Bank Branch Manager.
3. Application Process
If you are interested in applying for this housing loan scheme, you can follow the following steps:
- Applications must be made at any branch of the Financial Institutions (IKPs) that participate and not directly at the SJKP office;
- Borrowers will need to identify the desired residence in advance, before applying and submitting the relevant documents to the DPP;
- The financial institutions involved will provide financing facilities to eligible borrowers;
- The Bank will evaluate and review the Borrower’s application and submit an application to the Housing Credit Berhad (SJKP) for protection guarantee;
- The SJKP will review the application and provide the protection guarantee (if it meets the specified criteria);
- Financial institutions will submit an offer letter (LO) to the customer after successfully obtaining guarantees from the SJKP;
- Borrowers who receive Lo may have a dream home after financial institutions issue financing.
The following table is a summary of the Housing Credit Guarantee Scheme (SJKP) to help you better understand this scheme:
|Purpose of Financing
|Loans up to RM400,000 (including principal financing amount, MRTA or MRTT, LTHO, legal fees and appraisal fees
|Types of Financing
|Up to 35 years or until the end of the financing period or whichever is earlier (two generation loans are allowed).
|100 percent guarantee on the amount of principal financing (including MRTA or MRTT, LTHO, legal fees and valuation fees) obtained from the Financial Institution involved.
|Subject to the interest rate set by the Financial Institution involved.
|Mandatory deposit equal to 3 months of monthly payments.
5 Buying First Home Strategies You Can Try
Basically, there are several strategies and ways you can practice buying a home with a small salary (1500 salary). Here are five common strategies that you can try:
1. Government Housing Scheme, Affordable Houses
Government or affordable housing schemes are introduced to help low -income people, especially the B40 and M40, have their own homes. In Malaysia, many affordable housing projects are offered such as Johor affordable houses and Sarawak affordable houses, my houses and more.
2. Government Housing Loans (LPPSA)
For civil servants, you can consider a public servant or LPPSA loan scheme. This government housing loan scheme focuses on home ownership, especially low -income and medium -income civil servants.
3. Buy an Auction House
If you have a small salary, you can also have your own home by buying a auction house or secondhand home. Although it sounds easy, it is advisable to study the shortcomings and advantages of buying this kind of home to prevent you from suffering losses.
4. Joint Loan or Loan with Spouse/Family Member
A joint loan combines your home loan eligibility with your spouse. This means that if you have a small paycheck, you can combine a loan eligibility with your spouse to allow you to buy a home with higher qualifications and home prices.
5. Withdrawal of EPF Account 2
You can also consider making an EPF Account 2 withdrawal to buy a home. Authorization of Withdrawal Account 2 for the purchase of this home allows members to have at least one home to refuge in the future.
How Much Salary to Buy a House in Malaysia: 2022 Home Buy Salary Eligibility
Basically, no minimum wage is set to qualify for a home. It depends on the price of the home you want to buy and evaluate your financial level. The bank will use the debt service ratio (DSR) to calculate your loan eligibility. For those of you who may not know what the DSR is, DSR refers to the debt financing ratio of gross household income taking into account your current commitment, debt and financial performance.
This means that the DSR will determine whether you are eligible to apply for a home loan with the bank. In Malaysia, your DSR rate cannot exceed 70 percent to qualify for a home. However, it depends on the policies of each bank as each bank has a different DSR value and some banks set a lower DSR rate eligibility requirement.
Hopefully this article can help you know how much salary to buy a house if you want to buy a home. Also, if you are considering buying the best home insurance, visit the Qoala website for more info. Qoala is an insurance platform in Malaysia that provides insurance from a variety of best insurance companies with the guarantee of safe, affordable and easy insurance process.