{"id":7803,"date":"2014-08-25T14:20:43","date_gmt":"2014-08-25T06:20:43","guid":{"rendered":"http:\/\/www.imoney.my\/articles\/?p=7803"},"modified":"2015-12-08T11:49:26","modified_gmt":"2015-12-08T03:49:26","slug":"5-home-loan-myths-debunked","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/5-home-loan-myths-debunked","title":{"rendered":"5 Home Loan Myths Debunked"},"content":{"rendered":"<p><a href=\"\/articles\/wp-content\/uploads\/myths-debunked.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-10379\" alt=\"myths debunked\" src=\"\/articles\/wp-content\/uploads\/myths-debunked.jpg\" width=\"600\" height=\"361\" srcset=\"\/articles\/wp-content\/uploads\/myths-debunked.jpg 600w, \/articles\/wp-content\/uploads\/myths-debunked-300x180.jpg 300w, \/articles\/wp-content\/uploads\/myths-debunked-83x50.jpg 83w\" sizes=\"(max-width: 600px) 100vw, 600px\" \/><\/a><\/p>\n<p>Buying a house is an endeavour that requires patience, due diligence, and a tinge of luck. These elements however are only an addition to the cost involved in buying a property \u2013 a cost that a buyer must fully understand and be aware of in order to determine his or her affordability lest falling into financial distress.<\/p>\n<p>Here are five home loan myths we debunked:<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Myth-1-You-only-need-to-save-enough-for-the-down-payment-to-buy-a-home\"><\/span><b>Myth 1: You only need to save enough for the down payment to buy a home<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>It is true that one of the initial steps to buying a house is to be able to afford the down payment (usually 10% of the property\u2019s purchase price); but when accumulating funds, one must factor in these <a href=\"\/articles\/buy-house-in-malaysia\" target=\"_blank\">additional costs<\/a> \u2013 most of which are compulsory and must be paid upfront:<\/p>\n<ul>\n<li>Stamp duty<\/li>\n<li>Application fees<\/li>\n<li>Valuation fees<\/li>\n<li>Legal fees<\/li>\n<li>Mortgage insurance<\/li>\n<\/ul>\n<p>In addition to the above costs, it is advisable that the buyer maintain a buffer fund amounting to at least 3 months gross salary in the event of an emergency or loss of employment.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Myth-2-The-more-you-pay-for-the-down-payment-the-better-off-you-are\"><\/span><b>Myth 2: The more you pay for the down payment, the better off you are<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Putting down a larger down payment (more than what\u2019s required) naturally equates to a smaller loan amount which in turn leads to lower monthly repayments but doing so means that more money is tied up in the house leaving the buyer with less money for repairs or to service other debts. If paying more for down payment means less (or no) contingency money left for you, you are better off keeping the money for emergency.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Myth-3-Pay-more-monthly-to-shorten-loan-tenure\"><\/span><b>Myth 3: Pay more monthly to shorten loan tenure<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Unless you have a flexi home loan, paying more than what the required monthly repayment is, may have little benefit to you. Furthermore, with the lock-in period attached to most home loans today, you may even be penalised for settling your home loan within the lock-in period.<\/p>\n<p><a href=\"\/home-loan\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-7839 aligncenter\" alt=\"hl-620x100-en\" src=\"\/articles\/wp-content\/uploads\/2013\/12\/hl-620x100-en.png\" width=\"620\" height=\"100\" srcset=\"\/articles\/wp-content\/uploads\/2013\/12\/hl-620x100-en.png 620w, \/articles\/wp-content\/uploads\/2013\/12\/hl-620x100-en-300x48.png 300w, \/articles\/wp-content\/uploads\/2013\/12\/hl-620x100-en-150x24.png 150w\" sizes=\"(max-width: 620px) 100vw, 620px\" \/><\/a><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Myth-4-Refinancing-your-home-loan-is-a-bad-idea\"><\/span><b>Myth 4: Refinancing your home loan is a bad idea<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Refinancing is an act of taking up a new home loan to repay an existing one in full. Refinancing \u2013 assuming done after the lock-in period of the original loan can result in significant reduction in monthly repayments but may also have an adverse financial effect.<\/p>\n<p>When contemplating refinancing, it is important to weigh the savings in interest from the existing loan against the entry cost (if any) and the interest rates of the new loan. The latter is especially important as rates may be lower in the first year but higher in subsequent years. Find out more about <a href=\"\/articles\/home-loan-refinancing\" target=\"_blank\">home loan refinancing<\/a> before making the decision.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Myth-5-Waiting-for-the-right-age-to-buy-a-home\"><\/span><b>Myth 5: Waiting for the right age to buy a home<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Most people will advise the younger generations to wait before entering into a loan, especially a home loan that may take three decades to pay up, for fear of bankruptcy.<\/p>\n<p>While there is truth in that warning, one should not shun the idea of taking up a loan at a young age \u2013 assuming one can afford it.\u00a0 So, when is the right time to buy a home?<\/p>\n<p>Beginning July 5, 2013, banks are no longer permitted to offer a home loan of more than 35 years. This regulation coupled with the fact that most loan tenures only run up till the borrower reaches the age of 65 means that a borrower is only allowed a maximum loan tenure of 25 years if taking up a loan at the age of 40. A shorter loan tenure means higher monthly repayments, putting a strain on the borrowers financial status.<\/p>\n<p>Therefore, it is advisable for young professionals to start planning early to purchase their first home.<\/p>\n<p>&nbsp;<\/p>\n<p>With these myths busted and debunked, buying your first home will not seem as scary a prospect as before.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Still-thinking-about-taking-up-a-home-loan-Find-out-if-you-can-afford-one-here\"><\/span><b>Still thinking about taking up a home loan? Find out if you can afford one <\/b><a href=\"\/articles\/making-dream-home-reality\" target=\"_blank\"><b>here<\/b><\/a><b>. <\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"You-may-also-be-interested-in-finding-out-the-different-types-of-home-loan\"><\/span><b>You may also be interested in finding out the <\/b><a href=\"\/articles\/understanding-home-loan\" target=\"_blank\"><b>different types of home loan<\/b><\/a><b>.<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"If-you-are-really-considering-refinancing-ensure-you-are-not-doing-it-for-these-reasons\"><\/span><b>If you are really considering <a href=\"https:\/\/www.imoney.my\/articles\/3-wrong-reasons-refinance-home-loan\" target=\"_blank\">refinancing<\/a>, ensure you are not doing it for these <a href=\"https:\/\/www.imoney.my\/articles\/3-wrong-reasons-refinance-home-loan\" target=\"_blank\">reasons<\/a>.<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n","protected":false},"excerpt":{"rendered":"<p>Home loan refinancing and putting down a higher down payment &#8211; good ideas? Find out why these common beliefs about home buying may not be true.<\/p>\n","protected":false},"author":1,"featured_media":7804,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[239,226,229,21],"tags":[219],"class_list":["post-7803","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-home-loan","category-home-loan-refinancing","category-interest-rate","category-properties","tag-bi"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>5 Home Loan Myths Debunked | iMoney<\/title>\n<meta name=\"description\" content=\"Buying a house can be stressful. 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