Acceptance Letter
A letter from the applicant indicating his willingness
to accept the loan after the loan is approved by the
banking institution. |
Application Form
A form used to apply for loan.
|
Appraisal/valuation report
A written analysis of the estimated value of real estate
prepared by a licensed Valuer/Appraiser
|
Base Lending Rate (BLR)
A minimum interest rate calculated by financial
institutions based on a formula which takes into account
the institutions' cost of funds and other administrative
costs. |
Commitment Fee
A fee charged by the financial institution for setting
aside funding that are not utilised by the borrower.
Usually only applicable to overdraft facility.
|
Default
Failure to pay the monthly instalment/interest payments
to financial institutions when due. |
Disbursement Fees
Various type of fees such as registration of charge fee,
land search fee, bankruptcy search fee incurred by
financial institutions and solicitors attending to the
loan documentation in relation to the loan which are
payable by the borrower.
|
Documentation
A set of agreements, forms, and other documents to be
signed in connection with a loan. The documentation will
form a full set of records for the loan. |
Down Payment
An initial payment made by the buyer to the seller of
the house. |
Financial Institutions
All commercial banks and finance companies licensed
under BAFIA 1989 and Islamic banks licensed under the
Islamic Banking Act 1983. |
Flat Rate
A term used to describe interest that is charged as a
fixed percentage of the loan amount throughout the
tenure of the loan. The flat repayment amount is usually
determined before the commencement of the repayment
programme. For example, interest charged on a RM10,000
loan at a flat rate of 10% per annum is RM1,000 annually
until the loan is fully settled.
|
Floating Rate Loan
A term used to describe a loan, where the interest
charged fluctuates due to the rise and fall of a certain
indicator such as the Base Lending Rate.
|
Foreclosure
Legal action available to the financial institution for
recovering outstanding sums owed by a borrower who has
defaulted on his/her loan. The property pledfed by the
borrower to secure the loan is sold and the proceeds of
the sale used to settle the outstanding loan amount.
|
Graduated Payment
A scheme that allows the borrower the flexibility to pay
a lower instalment sum at the beginning of the loan
tenure before progressing onto a higher instalment sum
as the borrower's purchasing power improves.
|
Gross Monthly Household Income
The sum of gross monthly pay of all working family
members before deducting income tax, Sosco, EPF, loan
instalment or other deductions plus any additional
income from overtime, commissions and other sources.
|
Guarantor
Person or entity who is legally bound to pay a debt
incurred by the borrower if that borrower fails to pay.
|
Homeowners Insurance
An insurance policy that combines liability coverage for
a homeowner together with protection from damages caused
by wind, fire, vandalism and other risks.
|
Interest Rate
The amount charged by the lender to the borrower fo
borrowing a sum of money expressed as percentage of sum
borrowed. |
Late Charge
A penalty charged by financial institution for not
paying instalment due on time.
|
Letter of Administration
A Grant of representation issued by the High Court to a
person to allow him to administer the estate of the
deceased who died without a will.
|
Loan Tenure
Number of years taken to fully repay the loan principal
and interest as agreed under a specific repayment
programme. |
Margin of Financing
The loan amount granted by the financial institution,
expressed as a percentage of the value of property
pledged to secure the loan.
|
Mortgage Reducing Term Assurance (MRTA)
A term insurance which reduces over the tenure of the
loan. This form of insurance is used to provide cover
for the outstanding loan amount, in the event of death
or total permanent disability of the insured. MRTA is
normally calculated to meet the outstanding loan amount.
|
Outstanding Loan
Remaining loan not yet paid, including interest and
other charges. |
Overdraft
A type of credit facility granted to the eligible
current acount holder. The borrower is allowed to issue
cheques exceeding the credit balance in the current
account but subject to a certain pre-approved limit
granted by the financial institution.
|
Power of Attorney
A formal legal document giving authority to one person
to act on behalf of another person.
|
Prepayment
Payment of all or part of a loan before maturity
|
Prepayment Penalty
A fee charged by financial institutions for early
payment of loan in full. The fee charged is usually
based on a percentage of the loan amount or "X" months
of interest. |
Principal
The amount borrowed from financial institutions,
excluding interest and other charges.
|
Property
Refers to landed properties (like house, apartment,
condominium) and land (like bungalow lots).
|
Refinancing
The process of paying off a portion or the entire amount
of the existing loan with the intention of obtaining
another loan from the same or another financial
institution. |
Sale and Purchase Agreement
A written contract signed between the buyer and seller
stating amongst others, the terms and conditions under
which a property will be sold.
|
Security
Real or personal property that guarantees the repayment
of a loan. The borrower risks losing the property if the
loan is not repaid.
|
Term Loan
A loan which is repaid through regular periodic
payments, usually over a period of time, for example 10
years. |
Title
A legal document establishing the right of ownership on
a property. |
