Tuesday, March 8, 2011

100% financing for new homes for young Malaysians

This is really good news for young Malaysians, looking for new houses.

In an effort to boost home ownership among young Malaysians, the government of Malaysia yesterday, 8 March 2011, announced a bountiful good news for them.

They can now buy themselves a new home without having to pay anything in down payment, i repeat, zero downpayment!!!

Those earning less than 3,000 ringgit (US$985) a month can obtain up to 100% financing to buy their first home under a new scheme launched by the ever popular Malaysian government.

The My First Home Scheme, launched by Prime Minister Datuk Seri Najib Tun Razak, will enable them to buy houses costing between 100,000 ringgit and 220,000 ringgit with a repayment period of up to 30 years.

The scheme sees the participation of 25 conventional and Islamic financial institutions including major banks like AmBank, CIMB, Hong Leong, Maybank, Public Bank, RHB and Standard Chartered.

To qualify for the scheme, which is for both houses under construction and completed properties, house buyers must be those working in the private sector and are confirmed employees with a minimum of six months in the job.

The self-employed do not qualify for the scheme while joint applications are allowed, provided that both are in the private sector and are family members, such as siblings or spouses.

The monthly financing repayment sum must also be not more than one-third of the applicants' monthly gross income.

However, this sum can go up to 50% of their income if additional credit is permitted under the banks' underwriting policy.

The Government through Cagamas Berhad -- a national mortgage corporation -- will bear the costs of the initial 10% deposit for the house while normal interest or profit rates for Islamic banks apply under the scheme.

The scheme does not cover refinancing of a home.

Prime Minister Najib said the scheme would enable young adults in the country to own their first home within a short time.

"This scheme is a government initiative to help the young citizens as well as to inculcate confidence and desire in them to own houses.

"It is also part of the Government's objective to provide affordable housing to all Malaysians in rural and urban areas," he said.

The Prime Minister had announced the scheme during the tabling of the Budget in October, 2010.

Later, Najib witnessed the agreement signing between the Finance Ministry and the participating institutions, which was also attended by central bank governor Dr Zeti Akhtar Aziz and Treasury secretary-general Dr Wan Abdul Aziz Wan Abdullah.

Also present were Second Finance Minister Ahmad Husni Mohamad Hanadzlah, Deputy Finance Minister Donald Lim Siang Chai and Cagamas Holdings Berhad chairman Ooi Sang Kuang.

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