How does Wahdah Home Financing work?
Bank Islam Wahdah Home Financing adheres to the set rules of Tawarruq (Commodity Murabahah). Tawarruq is the act of buying an asset with a deferred price and subsequently selling it to a third party to get cash.
Bank Islam can finance up to 90% of the value of the completed property for tenures as long as 35 years or up until 70 years old, whichever is earlier. But of course, it all entirely depends on your creditworthiness and Bank Islam's approval.
This loan is applicable only for completed property and strictly for refinancing purposes only. So if you're thinking about jumping ship to another bank, maybe this mortgage is a good place to start.
Here are the profit rates and the eligible property value for your reference.
Property Value | Profit Rate |
RM300,000 and below | Standardised Base Rate (SBR) 3.00% p.a. + 1.10% p.a. = 4.10% p.a. effective profit rate |
Above RM300,000 | Standardised Base Rate (SBR) 3.00% p.a. + 0.90% p.a. = 3.90% p.a. effective profit rate |
What are my obligations?
As with any Islamic home loan your monthly instalments are calculated based on the Profit Rate, which in turn is determined by the Islamic Base Rate (IBR). Luckily for you, the profit rate is capped at a ceiling rate to hedge you from any sudden hikes in the IBR.
Bank Islam can offer you a choice of fixed-tier financing periods for your completed property. For the first couple of years, you can enjoy a low-interest rate, which will increase in the subsequent years.
This might be a big help for folks struggling to cope with the cost of repairs or refurbishments when refinancing.
Do I need Takaful coverage?
By taking up MRTT or MLTT takaful, you will be covered should any unexpected event occur. In the event of your death or Total Permanent Disability (TPD), the said Takaful coverage will pay the reduced sum covered as per schedule.
You also have the option to subscribe to the Houseowner/Householder Takaful Plan. Fire insurance, on the other hand, is compulsory for most mortgages. Bank Islam should be able to furnish you with more details if you require it.
What documents are needed when applying?
This is a complete list of acceptable income documents to be used when applying for the Bank Islam Wahdah Home Financing with your loan officer:
Salaried applicant:
- NRIC photocopy
- Sales and Purchase Agreement
- Latest 3 months salary slips
- Latest 3 months salary crediting account statements
- Employer's confirmation letter
- Annual income statement/ BE form/ EPF statement
- Any other supporting income document
Self-employed applicant:
- NRIC photocopy
- Company/Business registration
- Latest 6 months bank statement
- Latest 3 years financial statement
- Latest B Form
- Any other supporting income document