How does this mortgage work?
Bank Islam Baiti Home Financing is based on the principle of Tawarruq (Commodity Murabahah). Tawarruq is defines the purchase of an asset with deferred price, then selling that asset to a third party to get cash.
Subject to credit check and approval Bank Islam will be able to finance up to 90% of the value of your new house, whether complete or under construction. As opposed to other loans, for a property in some residential projects that are under construction you can enjoy No Payment During Construction for up to two years.
What are my monthly commitments?
Following conventional Islamic banking, your monthly installments are calculated based on the Profit Rate at which the bank is entitled to earn money for being a lender. The rate is determined by the IBR (equivalent to BR) and is variable, subject to change in the market.
Thankfully, the profit rate is capped at around 10.5% to hedge you from any sudden hikes in the IBR that might result in higher repayments. Bank Islam also offer a fixed multi-tier home loan in this financing package. You can enjoy interest rates from as low as 2.5% for the first year, increasing incrementally up to 7.5% for subsequent years.
Be reminded that if you are unable to service your repayments, it would be wise to contact Bank Islam to negotiate an alternative for payments and avoid foreclosure.
And the insurance? Do I need any?
By taking up MRTT insurance you will be covered should the unexpected occur. Takaful coverage will also have your back in the event of your death or Total Permanent Disability ( TPD). Fire insurance is compulsory.
What do I stand do gain from Baiti Home Financing?
- Greater flexibility - you have the option to defer the payment of two monthly installments with a Payment Holiday every November and December.
- Enjoy No Payment During Construction for up to two years for selected residential projects
- Better costs savings with the exclusion of a processing fee and 20% discount on Stamp Duty for Perfecting The Bank’s Securities Documentation
What documents do I need to make a home loan application?
If you are an employee earning a salary
Sales and purchase agreement
Photocopy of title head
Latest financing or loan statement
Latest 3 months salary Slips
Latest 3 months salary slips crediting account statements
Employer's confirmation letter
Annual income statement/ BE form/ EPF statement
If you are self-employed
Latest 6 months bank statement
Latest 3 years financial statement
Latest Borang B