Housing Loan Al-Rajhi ??? Why???

Most people take caution in choosing their banker or their loan in financing their future home. Actually most of them focuses solely based on interest rate given by the bank but there are other accounts that we must consider on buying our desired home. Why we must choose al-rajhi?? 

1)   1)  No Lock-in Period 

Lock-in period means that after certain time or years, then u can only sell or refinance your house. Lock-in period is the time frame when you do a full settlement of your loan in the first few initial years of your loan tenure, the lender (or the bank) can impose a penalty. This is a sample of the full redemption clause.

Image: Full redemption term in a home loan offer letter.

       Notice that if I settle the loan within five years from the first draw down date, I will have to pay 3% to 5% from the original loan amount or RM5000 whichever is higher. For example, if my original loan amount is RM200,000, when I choose to settle the loan or refinance it to other banking institution, the amount I need to pay for penalty is:

RM200,000 x 3% = RM6,000

     Refinancing  your house can benefit you in certain ways; reduce your interest rate, reduce  your monthly instalment and can also give you instant cash.

Case Study: Chan bought a single storey house in 1990 for RM180,000 and he had taken a loan for 20 years with RM150,000 financing. In 2005, his loan had around 5 years to go. His outstanding balance was approximately RM60,000. Chan went to the bank and he learned that his property had appreciated in value to RM400,000. Chan was also eligible to borrow  RM280,000 minus-ing  his outstanding balance of RM60,000, he gets a WHOOPY cash of RM220,000 for his pocket.

 2) High Margin of Finance 90%

For al-Rajhi Bank, the Margin of Finance is 90% financing for salaried income and for businessman we can give up to 80% financing. 90% financing includes, MRTT and also Zero Entry Cost.

 

3)No Hidden Charges

Beware of hidden charges, these charges can give surprises, worse shocks later on. For that, be careful of what you are signing in whatever contract especially contracts related on money. Firstly you must ask the banker thoroughly about matters that you don't understand listed in the offer letter given by the banks. How can we detect whether the contract have hidden charges or not??

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3. Terms & Condition Applied


 4) No Late Payment Charges

al-Rajhi Bank is the ONLY bank that doesn't have any charges for this matter. Compared to other banks, they will be additional charges to customer at least 1% on their monthly installment if they fail to serve the monthly installment on due date. For al-Rajhi Bank, in case of the customer cannot serve the monthly installment at all or default payment for more than 6 months without informing the bank about their status or problem, the al-Rajhi Bank have the right to appoint their exclusive property agent to sold the said property at the current market value. They will use the money to cover back the remaining outstanding balance and the excess money from it will refund back to customer.

5) No Default Rate

Normally if a customer is unable to serve the monthly installment from any bank for 1 to 3 months, bank has the right to change the interest rate without informing the customer due to customer already signed the Letter of Offer. (This is stated in General Term & Condition  of LO). For example, let say current rate offered is BLR/BFR minus -2.40% and suddenly the customer failed to serve the monthly installment for 1 to 3 months, bank suddenly will change the interest rate from BFR/BLR -2.40% to BLR PLUS +1.5% to plus +4% for the remaining balance of their loan tenure with that bank. So the effect is monthly installment will be higher than agreed before due to the interest rate already been changed. With al-Rajhi Bank, we will not change the interest/profit rate even customer failed to serve the monthly installment. This is what we call NO DEFAULT RATE.

6) Zero Entry Cost Absorbed

Cost for laon documentation i.e. stamp duty, legal fee, disbursement and documentation is absorbed by al-Rajhi Bank. In other words, customers don't have to pay for ZEC/ Moving Cost. Why on earth we should pay for ZEC if we cold get it free with al-Rajhi Bank.

7)No Early Settlement Charges

In al-Rajhi Bank it is up to you, when you want to settle your loan without any charges. Certain banks charge you certain amount if you pay in advance or lump sum. With this feature you can reduce your interest and also reduce your tenure.

 8) 100% Fully Syariah Compliance

In al-Rajhi Syariah Board takes caution in dealing matters about economic that's why you see that in al-rajhi there are no penalties for late payment charges, interest rate and so on. With al-Rajhi Bank, self assured that this bank is FREE from riba'(interest), gharar(uncertainty), and maisir(gambling).