Mortgage Training Slides Single License 2013

8/10/2019 Mortgage Training Slides Single License 2013

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AIA confidential and proprietary information. Not for distribution.

AIA.COM

AIA Home LoanTrainingPresenters name : Qua Boon Leong

Contact No. : 012-372 0291


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AIA confidential and proprietary information. Not for distribution. 1

Today Outlines

Introduction To Mortgage Business

AIA Mortgage Packages

Why Sell AIA Mortgage

Features & Benefits

Loan Process Overview

Terms & Conditions

How To Start


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What Is Mortgage?

Mortgage =$$$ borrowed from AIA / Bank to buya house / property

Also known as HOUSING LOAN

Loan is secured by the house

Security / House = Collateral

If the customer does not pay back the bank for the loan, then thebank will sell the house to pay back the loan.


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AIA MORTGAGE PACKAGES

AIA Mortgage Rates Interest Rates

Non Zero Moving Cost (NZMC)Package 1 4.85% p.a.

Fixed for entire loan tenure

Non Zero Moving Cost (NZMC)Package 2

4.25%p.a. (1st 2 yrs) ,4.99%p.a. thereafter.

Fixed for entire loan tenure

Zero Moving Cost (ZMC) Package

5.25% p.a. Fixed for entire loan tenure


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HOW LOANS CANHELP YOU SELL

MORE INSURANCE


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MRTA

A single premium product make payable upfront at the beginning ofthe loan

Based on the concept cover the outstanding loan balance However, it only covers the borrower for an average interest rate(ie. 5%, 5.5%, 6.5%, etc)

If the purpose is to cover a BLR-loan, It would not ne able to offer100% coverage all the time due to the fluctuating elements in the

loan

RM500k

30 yrs

Covers for an averageinterest rate (ie. 5%)


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MRTA

In addition, banks does not offer cheaper MRTA, just lower premiumdue to lower coverage (ie. 4%)

A fluctuating BLR would result in the loan being under-protected. Inthe event of claims, the borrower would still need to continue to pay forthe portion not cover by MRTA

The basic MRTA only covers death and permanent disability. Adding in

CI (critical illness) would double up the premium at a minimum

RM500k

30 yrs

Actual curve when taken intoconsideration BLR fluctuations


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MRTA

In the event the loan tenure is extended further due to increase inBLR, the differential gap would be even wider.

Another limitation on MRTA is that it cannot be transfer from 1 loanto another.

What happens to the MRTA when your customer decides to buy abigger house in 5 years time?

RM500k

30 yrs 40 yrs

The gap widens further when theloan tenure is extended due toincrease in rates


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PREPAYMENT PENALTY

A prepayment fee of 0.62%p.a of the full prepaid amount togetherwith an Administrative fee of 0.40% of the full prepaid amount or suchother rate as may be imposed by AIA at any time or from time to timeshall be borne by the Borrower if the Borrower prepays the Facility infull within five (5) years from the date of first drawdown of the Facilityor half of the total loan tenure, whichever is shorter. The prepaymentfee will be calculated based on the remaining years of the first five (5)years of first drawdown of the Facility or half of the loan tenure of theFacility, whichever is the shorter.

There will be NO prepayment fee imposed if prepayment is done via own savings, Employee Provident Fund (EPF) withdrawal and/or saleof property except for refinancing.


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PREPAYMENT PENALTY How To Calculate

0.62% x Tenure Factor* x Full Settlement Amount plus

Admin Charge of 0.40% x Full Settlement Amount

* Tenure Factor is derived from: (Half of Loan Tenure minus Years with Payment AlreadyMade) or (Remaining Lock In Period), w hich ever i sshor ter .
http://www.google.com.my/imgres?imgurl=http://4.bp.blogspot.com/-1BMnea9tWI0/TcQHh0xizDI/AAAAAAAAAoc/9SgdDjQD5Ao/s400/Calculator2.jpg&imgrefurl=http://gmatmalaysia.blogspot.com/2011/05/no-calculator-please-we-are-gmaters.html&usg=__ymR2LZ7P9vBGqFY1q2ZqxhwQ6no=&h=300&w=400&sz=15&hl=en&start=1&zoom=1&tbnid=96eEAI-Xhgl7OM:&tbnh=93&tbnw=124&ei=m60BTvOTK4jSuwOm6eWgDg&prev=/images%3Fq%3Dcalculator%26hl%3Den%26sa%3DG%26gbv%3D2%26tbm%3Disch&itbs=1


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PREPAYMENT PENALTY

Example:

Loan tenor of 20 years.Borrower refinance out from AIA on the 4th year.The full settlement amount is RM500,000Lock In Period is 5 yearsFull settlement occurs on 4th year:

New Prepayment CalculationTenure Factor:Half of Loan Tenure (10 years) minus Years with Payment alreadymade (4 years) = 6 yearsor Remaining Lock In Period = 1 year

0.62% X 1 year X RM500,000.00 = RM3,100/- Admin Charge of 0.4% X RM500,000.00 = RM2,000/-Total prepayment charge = RM5,100/-* Previous prepayment calculation = RM20,000/-


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PREPAYMENT PENALTY

For Zero Moving Cost package, you will also be required toreimburse AIA for all fees, costs and expenses whatsoever includingbut not limited to valuation fees, stamp duties and legal costs on asolicitor and client basis incurred by AIA in connection with the loanin the event the loan is refinanced or fully settled within 5 years fromthe date of the 1st drawdown.

Discount Cost (Applicable only for tiered Fixed Rate Loan)If you choose to refinance the loan within five (5) years of first drawdown orhalf of the loan tenure of the Facility, whichever is the shorter you will haveto:Reimburse AIA for the difference between the original Prescribed Rate andthe discounted interest rate (First Fixed Rate Period) based on thenumber of years where the discount is given on the approved loan amount.


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Basic Mortgage Terms

Loan Principal

Interest (%)

Loan Tenure

LTV (Loan to value %)

PTI(Payment to Income %)

Amount of money lent to customer

Price of the loan charged to the customerRevenue and income earned by AIAUsually quoted in % to customers

Period of time to repay the loan

Value of loan against the value of the propertyFormula:

Total Loan Amount Total Value of Property

Loan Commitments over Net Fixed IncomeFormula: Total Loan Installments /

Total Net Fixed Income


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HELPING YOUR CLIENTS- MORTGAGE ADVISE

3 Ps 1) P roperty- Not negative list, no auction properties, no land, no land &

construct, not in panel developers, no shop apartment, no Malay

reserve land & bumi lot, no low & medium cost 2) P ayment to Income (PTI) / DSR All loan instalments + 5% outstanding Credit cardIncome (Employee: Salary incl fixed allowanceBiz owner: 2yrs income declared in Form B divide 24)

3) P ayment Track RecordCCRIS, CTOS


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Property Sectors Vs Types

Sector Commercial Residential

Segments OfficeSpace RetailShops

Completed UnderConstruction


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Why You Need To Promote AIA Mortgage

Multiple Income - 3 Birds with 1 Stone

Faster & Easier Door Opener (Loans vs. Insurance )

Good Insight on Customers Financial Position for Future Insurance Business

Build & Conserve Your Customers Base

Be An Outstanding Unique Financial Planner (vs. Great Eastern,

Prudential etc)

Easy Recruitment

Bottom Line More Clients & More Income!


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AIA MORTGAGE REFERRAL FEE

MLD

Subject to other terms & conditions and is at AIAs discretion. Please seek further consultation with AIA for more informatio n.

Product Referral Fee Home Loans

&

Shop Loans

Zero Moving Cost0.35% (Agent)0.10% (Total given to up-line)

Non-Zero Moving Cost 0.35% (Agent)0.10% (Total given to up-line)


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INCOME POTENTIAL

Based on : RM3,282 FYP for a traditional life policy Current market value of RM380,000

Loan Amount : RM 300,000

Referral Fee : RM 1050Life Insurance : RM 1148.70Houseowner : RM 47.52

TOTAL for 1 st Year

(yet to include renewal premium)


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Based on : Life commission (investment link) earned in 1 st year based on Male aged 30

(non smoker) with loan tenure at 30 years

Loan Amount : RM 1,000,000

Referral Fee : RM 3,500Life Insurance : RM 14,000Houseowner : RM 1,880

TOTAL for 1 st Year Only :

(yet to include renewal premium)

INCOME POTENTIAL


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AIA Mortgage



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Meet Customer Submit Application Loan Approval

Signing Letter ofOffer

Instruction to Lawyer Signing LoanDocumentation

Completion of LegalProcess

Advise AIA forDisbursement

Normally, the process will takeabout 2-3 months.

Instruction tovaluers


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AIA Mortgage

Terms&

Conditions


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TERMS & CONDITIONS

Who Can Apply

Minimum age is 18. For applicants age 23 and below, an older co-applicant is required

Maximum age is 70 years of age upon maturity

Open to:i.Malaysians & Permanent Residents

ii. Singaporeans & Bruneian Nationals

iii. Foreigners with a valid work permit / registered business in Malaysia /married with Malaysian spouse

iv. Participants of Malaysia My Second Home Program (documentaryevidence / approval from Malaysia Government under the MM2Hprogram ~ prior to loan disbursement)


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Location - Completed Properties

23

L a n

d e d Klang Valley

Penang, Seberang Prai, ParitBuntar, Sg Petani & KulimJohor Bahru, Batu Pahat, &MuarIpoh, Kampar & TaipingSeremban

MelakaKuantanKuchingKota Kinabalu

N o n

- L a n

d e d

Klang ValleyIpohMelakaJohor BahruPenangKuantanKota KinabaluKuching

With Permanent Certificate of Completion & Compliance (CCC)

Exclud ing - residential properties located at landslip/flood prone area/ oxidationpond/power station, T-junction, auction properties, negative factors and withinnegative list

Under con st ruct ion pro per t ies - available within AIAs approved list of panelof developers and projects


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Landed PropertiesMinimum Property Value: RM150,000Minimum Marketability Factor: 6

Non-Landed Properties (outside Klang Valley & Penang Island)Minimum Property Value: RM200,000

Minimum Marketability Factor: 6Minimum Features: 24 hour Security & Guarded

Minimum Loan Amount: RM100,000

Completed service apartments could be consider.

Leasehold titles are accepted subject to remaining / unexpired lease of at least 20years upon maturity. For East Malaysia, this could be at least 15 years.

Location - Completed Properties


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Guideline for Debt Service Ratio (DSR - based on net income)

Income - Calculation

All outstanding loan instalments, 5% credit card minimum paymentsand non-banks loan instalments (including those not covered by CCRIS)

Income after statutory deductions (ie tax, EPF, SOCSO)

For high net-worth customers (ie. customers with total net personal assets exceeding one millionringgit), flexibility is provided to consider the customers deposits, assets and/or investments inassessing the customers ability to repay the financing.

Net Income DSR

Above RM8K Up to 70%

Above RM5K to RM8K Up to 65%

RM3K to RM5K Up to 60%

Below RM3K Up to 50%

DSR =

* The percentage quoted is served as a guidelin e and var iati ons to it wil l be applicable tocustomer ' s prof il e and managements di scretion.


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Salary Earners / Employed


Type of Income Based on monthly average Basic Salary 100% of gross salary

Fixed Allowance 100%

Annual Contractual Bonus 100%

Rental 70% with tenancy agreement and 3-6 months bankstatement to show the crediting of rental income

Commission 50% if provide 6 to 12 months evidence(Taking out high & low Showing Consistency)

Non Fixed Allowance 50% if provide 6 to 12 months evidence(Taking out high & low Showing Consistency)


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Self Employed


Minimum 2 years income tax return will be the basis of income recognition.

Latest 6 to 12 months business bank statements may be provided as furtherestimation of business income especially for professionals such as Accountants,Specialists, etc.

Applicants who own more than one business entity may submit more than one business current account for computation of income consideration.

Personal bank account statements may be used as supporting documents.

Net income is derived after minus off tax (taxable amount is per latest Tax Scheduleavailable).


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Loan Tenure

Up to 40 years or age 70, whichever is earlier

Minimum loan tenor is 5 years.

Maximum is 40 years but borrowers age should not exceed 70 years old,whichever is earlier.

Borrowers age is based on the age as of the current year.

Applicants can only be deemed to be contributing to the repayment of the loan ifthey are employed or self employed with evidence of earning capability.

If the younger applicants income is sufficient to support the case, loan tenure can be solely based on the younger age.

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Loan Tenure

For joint applicants, the average age of the applicants who are contributing to

the repayment of the loan will be used to determine the loan tenure. Example isas follows:

Bo rrower 1 = age 25, income 10,000(max age for income earning 70) 70 25 = 45

Bo rrower 2 = age 50, income 70,000(max age for income earning 70) 70 50 = 20Total Inc om e = 80,000

Ag e calcula t ion = 25 * (10,000/80,000) + 50 * (70,000/80000)

Weighted average age = 47

Maximum tenor = 23

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LTVs breakdown in accordance to the nature of the loan:

Loan to Value (LTV) / Margin of Finance

Purpose LTV / Margin

Purchase from Developer Up to 90%

Purchase from Subsale Up to 90% (Open Market Value or Purchase

Price, whichever is lower)Refinance Up to 90% (with or without cashout)

Investment Up to 80%

Foreigners Up to 70% to 80%

3rd Housing Loan Up to 70% (as per BNMs guidelines)


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5 Cs of Credit :

Character

Capacity

Capital

Condition

Collateral

- habits - good paymaster.- income/revenue to support.

- commitment in investment.

- market / industry outlook.

- movable/immovable propertyas security.


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Legal Documentation Process :

Fees incurred :

Legal Fee : 1st RM150K- 1%; Bal. loan - 0.7% (upto RM1mil)

Stamp Duty : Stamp 0.5% of loan amount;

Disbursement : Disbursement RM1,500.

For refinancing cases to add the followings:

Discharge : RM600

Valuation Fee : 0.25% on value + RM100;


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FEES STRUCTURE LEGAL FEES

Sale & Pur chaseAgreement

% Loan Agreement %

First 150K 1 First 150K 1

Subsequent up to 1M 0.7 Subsequent up to 1M 0.7



Subsequent up to7.5M

0.4 Subsequent up to7.5M

0.4

Stam p Duty % Stamp Duty %

First 100k 1 Loan Amount 0.5

Subsequent up to500K

2

Subsequent onwards 3


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Average BLR for 32 years : 7.88Average Lending Rate for 32 years : 8.83

AIA HOMELOAN AT 4.85

ANALYSIS OF LENDING RATE (source: Bank Negara Website)

AIA FIXED AT 4.85%

11.51

6.72

10.33

8.24

6.83

11.51

10.33

6.456.99

8.70

12.80

12.25

6.414.92


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AIA Mortgage Packages

Historical

Lending Rates & SRRWhat is the

Trend?


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Historical Rate of the Statutory Reserve Requirement

SRR Rate Effective Date 3% 1 June 2011

2% 1 April 2011

1% 1 March 2009

2% 1 February 2009

3.50% 1 December 2008

4% 16 September 1998

6% 1 September 1998

8% 1 July 1998

10% 16 February 1998

13.50% 1 June 1996

12.50% 1 February 1996

11.50% 1 July 199410.50% 16 May 1994

9.50% 3 January 1994

8.50% 2 May 1992

7.50% 16 August 1991

6.50% 16 January 1990


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HISTORICAL BLR & AVERAGE LENDING RATES IN MALAYSIA

YEAR BASE LENDING RATE AVERAGE LENDING RATE

1980 7.75 10.131981 8.50 11.89

1982 8.50 12.40

1983 11.02 11.78

1984 11.35 12.21

1985 11.54 12.551986 10.69 12.23

1987 8.19 10.36

1988 7.25 9.30

1989 7.00 8.90

1990

7.16 8.79

1991 8.02 9.35

1992 9.22 10.16

1993 8.85 10.03

1994 7.29 8.76

1995 7.44 8.73


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Source:BNMWebsite

YEAR BASE LENDING RATE AVERAGE LENDING RATE

1996 8.89 9.941997 9.53 10.62

1998 10.61 12.13

1999 7.29 8.56

2000 6.77 7.67

2001 6.66 7.13

2002 6.39 6.61

2003 6.13 6.30

2004 5.99 6.05

2005 6.00 5.95

2006 6.61 6.49

2007 6.72 6.41

2008 6.70 6.08

2009 5.62 5.08

2010 6.02 5.00

2011 6.45 4.92

2012 6.53 4.78


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AVERAGE LENDING RATESOver last 5 years = 5.17%Over last 10 years = 5.71%

Over last 15 years = 6.61%Over last 20 years = 7.36%Over last 30 years = 8.42%

Source : BNM Website


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WHAT DO I GAIN IN SELLING HOME LOANS?? ANALYSIS OF LENDING RATE

5

6

7

8

2004 2005 2006 2007 2008 2009

Average BLR

6.75%

5.55%

6.00% (1.20%)


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IN THE NEWS INTEREST RATES INCREASES FURTHER

Series of Rate Hikes1) OPR before the financial meltdown 3.50%2) OPR reduced to 2.00% last year 2009

OPR increases in 2010i) 0.25% hike in March to 2.25% BLR:5.80%ii) 0.25% hike in May to 2.50% BLR:6.05%iii) 0.25% hike in July to 2.75% BLR:6.30%

OPR increases in 2011i) 0.25% hike in May to 3.00% BLR:6.60%ii) Next rate hike in.?

IS THIS THE END OF RATE HIKES???


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EFFECT ON INCREASE IN BLR

LOAN AMT MONTHLY INSTALMENT(30yr loan at BLR 2.40%)

ADDITIONALINTERESTS

(30yrs)

IF INSTALMENT REMAINUNCHANGED

3.15% 4.2%

500,000/- 2149 2446 106,920 30 yrs increase to 40 yrs & 3 mths(additional RM264,327 in instalments)

1,000,000/- 4298 4891 213,480 30 yrs increase to 40 yrs & 3 mths

(additional RM528,654 in instalments)

EFFECT OF BLR INCREASE FROM 5.55% TO 6.60% (Increase by 1.05%)

Disclaimer : Whilst every care has been taken in compiling this publication, AIA Bhd. and its officers are unable to accept any liability whatsoeverfor the accuracy of its contents or for the consequences of any reliance which may be placed upon the information contains.

The increase in BLR by 1.05 % will have-increased instalment by RM300 pm (RM500K loan)-increased loan tenure by 10 yrs and 3 months ! (if instalmentunchanged)

What if ratesincreased further?


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EFFECT ON INCREASES IN BLR

LOAN AMT MONTHLY INSTALMENT(30yr loan at BLR 2.40%)

ADDITIONALINTERESTS

(30yrs)

IF INSTALMENT REMAINUNCHANGED

4.2% 5.2%

500,000/- 2446 2746 108,000 30 yrs increase to 41 yrs & 11 mths(additional RM349,778 in instalments)

1,000,000/- 4891 5492 216,360 30 yrs increase to 41 yrs & 11 mths

(additional RM699,413 in instalments)

EFFECT OF BLR INCREASE FROM 6.60% TO 7.60% (Increase by 1.00%)

Disclaimer : Whilst every care has been taken in compiling this publication, AIA Bhd. and its officers are unable to accept any liability whatsoeverfor the accuracy of its contents or for the consequences of any reliance which may be placed upon the information contains.

An increase in 1% will extend your loan tenureby 11 yrs and 11 months ! (if instalment unchanged)

What if rates increase further?


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IN THE NEWS OPR MAY INCREASE TO 3.25% BY 2011

.. 2 series of 25 basis point hike is hardly anormalisation in the OPR given the previous 150basis point cuts..

..most countries in emerging Asia signalled readinessto normalize interest rates

Scour ce: StarBiz Week 6 th March 2010


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IN THE NEWS

Artic le Star Bi z 24 th Marc h 2011

..borrowers would also be stressed - tested in the event interest rates w ere tor ise by 100 to 200 basis p oints f rom thetime the loan is applied..

Meaning:

BORROWERS SHOULD B E PREPARED IFTHEY ARE A BL E TO AFFORD AFURTHER RATE HIKE OF 1% TO 2%.


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New Guideline from Bank Negara

Banks are now obligated to perform a stress test for each loanapplication to show the impact of an increase in increase rate (1% and2%) on the total repayment amount.


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New Guideline from Bank Negara

BLR Rates 2010s Rate(4.20%) After BLR goes up

1% (5.20%) If BLR goes up 2%

(6.20%)

MonthlyInstalments RM3,083

RM3,356(increase by

RM273 )

RM3,641(increase by RM558 )

Total interestcost at end of 20

years RM239,795

RM305,126(increase byRM65,331 )

373,418 (increase by RM

133,623 )

Total repaymentat end of 20

years RM739,792 RM805,126 RM873,416

Impact of further increase in BLRWould anyone want a further rate hike of 1% to 2% in their home loans?Whether we like it or not, it has already happened and the financialimplications can be seen below based on a loan amount of RM500,000 for a20 year tenure.


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IN THE NEWS

RAM SAYS CLOSE MONITORING NEEDEDHousehold Debt rose 77% (2011) of GDP

mortgages 45% - largest componentRAM-We do not discount additional prudent

regulations to be imposed..

Implication of new capital requirementunder Basel III in 2013 will impact consumers!Quote:Although these new capital measures would

elevate banks funding costs, which may in turnbe passed on to consumers it would ensure the

banking sector was safeguarded againstunexpected shocks Net Interest margins (NIM) under pressure for loans

such as residential mortgages.Will this give pressure to banks to increase

interest rates in longer term?NIM- difference between interest income less interest paidto depositors.


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In The News 4 th July 2012

Real CapitalGains

We expect the overnight policy rate to be held at3.00% until end-2012, and up towards 3.0-3.5% in2013.

CIMB Research Paper


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In The News 10 th May 2012

Real CapitalGains

expects to resumetightening* no laterthan next year. * raising interest rates~ Director of Economic Research ~

AmResearch Sdn Bhd

odds of a rate hike

would start to increasefrom end 2012 and2013

~ Citigroup Economist


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IN THE NEWS

Art icle 4 -

ht tp : / /www.starproper ty.my/Proper tyGuid e/Finance/9134/0/0 UNBIASED VIEW FROM RENOWNAU THOR & PRO PERTY CONSULTAN TAZIZI A LI :_Quote ..take a fixed interest ratem ortg age. While the interest rate ch argedfor a f ixed in teres t ra te mortgage m ay besl ight ly h igher than the in teres t ch argedfor a variable interest rate mo rtgagetoday, you shou ld be paying a lower to ta lrepayment in the long run .

Next , the f ixed repaym ents m ean that yo ucan plan yo ur cashf low bet ter, reduceyour w ork load and a lso yo ur p rob lems .Most im portant of a l l , you w il l beprotected f rom interes t ra te r isesthroug hou t the per iod. And oh ya , it wi l lhe lp you sleep better at night.
http://www.starproperty.my/PropertyGuide/Finance/9134/0/0http://www.starproperty.my/PropertyGuide/Finance/9134/0/0http://www.starproperty.my/PropertyGuide/Finance/9134/0/0http://www.starproperty.my/PropertyGuide/Finance/9134/0/0


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IN THE NEWS

The higher the loan amount, thehigher the quantum of increase

Borrowers are concern of what theycan do to protect themselves

If you cannot handle the extrapaym ent , i f tenure is longer than tenyears, convert yourd to fixed rates

Why? (1) Be protected from raterises (2) avoid m uc h p ain (3) be able

to m ake paym ent on a regular basis(4) be able to keep th e ho us e (5) sleepbet ter at nig ht

Most impo r tan t poin t : It is a worthwhile sacrifice that Ive done myself

Article Points To Consider


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Article Points To ConsiderWhen Buying A House To Avoid Future Complications

Clauses in the loan agreements give the lenders the abso luter ights to a l ter both the Base Lendin g Rate (BL R) and/or them argin of in terests ( the minu s X%).

One canno t m ake a special low in terest o ffer in th e salescamp aign and then co ntractual ly (throu gh the loan agreement)creates a claus e to allow th at special offer interest rate to b einval idated.

Chang K im Loong , secre tary-general of The Nat ional House Buyers A ssocia t ion(The Star Biz, 25 Augu st 2012)


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COMPARISON BETWEENAIA FIXED RATE VS BLR


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Impact on BLR packages

Loan RM400K, for 30 years,

Bank BLR 2.4% => 4.20% ; AIA Fixed rate 4.85%Instalment is RM1,957 ; Instalment RM2,111

Total interest payment RM304K ; Total interest RM359K

Save RM55K.

If interest rate goes up by (1yr later)

0.32% only (4.20% to 4.52% )

If instalment remain the same,

Loan extended from 30 years to 32yrs 5mthsTotal interest payment RM359K

.. 4.52% 4.85% .... ?


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Impact on BLR packages

Loan RM400K, for 30 years,

Bank BLR 2.4% => 4.2% ; AIA Fixed rate 5.25%Instalment is RM1,957 ; Instalment RM2,209

Total interest payment RM304K ; Total interest RM395K

Save RM91K.If interest rate goes up by (1yr later)

0.49% only (4.20% to 4.69% )

If instalment remain the same,

Loan extended from 30 years to 33 yrs 11mthsTotal interest payment RM395K

.. 4.69% 5.25% .... ?


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FACTS OR MYTHS?

No problem, you can always refinance every 5 years if interest rates goes higher.Changing loans every 3-5 yrs wi l l m ean - paying high in teres ts to b anks &barely reducing you r pr incipal loan. Every 5 yrs means yo ur e l ig ibi l i ty tosho r ter loan tenure wi th same pr incipal outs tanding! Who wil l be the biggestloser?.

2) Only BLR will change but the spread (eg BLR-2.30%) is guaranteed fixedSpread or interest margin is NEVER fixed. (Always refer to letter of offer and

loan documents rather than hear say)3) You can save more in interests with the withdrawal facility ie when you have

more money to pay into the loanThe impact of savings may not be much as it will depend on how much youhave to credit in and for how long vs the rising BLR trends which will add onthe burden of increasing instalments and interests.

More importantly to manage your investment wisely: You should never use your housing loan as an investment tool. If you havesurplus money, it should be used to invest into other assets or investmenttools eg ILP with better returns rather than paying surpluses to a mortgageloan.


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No Such Thing As A Fixed BLR Package

Important Note :1)Banks can change and

increase at its SOLEDISCRETIONBLR, interest

margin/spread.2)Borrowers can do NOTHING to

control this situation.3)BLR can affect borrowers

financially as home loans are thebiggest liability

The Bank has the right to vary theloan pricing i.e. the interest spreadand/or BLR..


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BLR Packages The Small Print

In the event the difference between

OPR and BLR reduces to below 3.5%during the loan tenure, the Bankreserves the right to increase theprevailing interest rate spread

Should the difference between OPRand BLR increase back to 3.5% andabove, the prevailing interest will takeeffect

entitled to vary the Banks BLR and/orthe Margin of Interest imposed abovethe Banks BLR

A redraw fee of RM50 per transactionis chargeable


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Study of Banks Letter of Offer (Effective July 2012)

Real CapitalGains

New Clause:

If you have One (1)month outstandingarrears, we shall revise

the interest rate to0.50%p.a. above the

prevailing prescribed rate of your facility.


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FACTS OR MYTHS?

4) BLR rates on average is lower than fixed ratesBased on BNM website of BLR and lending rates since for the past 30 years (1980-2010), average lending rate for the past 30 years is 8.92% and 10 years is 6.11%. Thisis much higher based on the fixed rates offered by AIA over the years.

5) Our instalment is lower and you can save thousands if you take a BLR loan-There is no comparison with BLR & fixed loan packages.-Last year, BLR is 5.55% and now it is 6.60% p.a. and is expected to rise further.

Eg if you have taken a BLR last year, the increase by 1.05% for a RM500K loanwould mean that your instalment would increase by RM300 pm and would stillincrease as interest is expected to increase further. Even if your instalment remainsthe same your loan tenure would be extended by 10 years, which means you payanother RM265K in additional instalments. Is this managing well your biggest singleliability?

-In short, never be in a position where you cannot control your highest liabilitywhereby the additional interests would severely put you financially to great risks andfinancial ruin.- Compare other European countries vs France (80% of their loan borrowers are fixedrate mortgages) and France was not at all impacted by the financial crisis

The Big Picture


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The Big Picture

UNCERTAINTIES AND MORE UNCERTAINTIES - Interest rates to normalize (how much more? How frequent?);- GST (Goods Sales Tax) looming;- Subsidies taken out;- Prices eg petrol prices, essential goods will go up;- Inflation & cost of living up;- Uncertain global markets;- impending war/disasters/bankruptcy of countries?- Subject to banks, interbank volatility No say in BLR or spread.

SHEILD YOURSELVES FROM FINANCIAL UNCERTAINTIES~ LOCK in your BIGGEST financial commitment (ie. YOUR HOME LOAN)to the:--lowest historical rate ,-More importantly a rate that you have absolute control.

-Dont lead your family to financial uncertainties and ruin withoutweighing first your ability to finance the risks..


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In The News 4 th May 2012

Real CapitalGains

Survey sho w ed 42% ofaff luent Malaysians w eresm ar t w eal th bu i lders w hom ake use of c redi t toenh ance th e ir inv es tm ent

retu rns . Bor row ing i s nolon ger seen as a l iabi l i ty toones wealth. Used c arefu lly,i t is a w eal th m anagem enttool .The Future Priority 2012 Report ~captur ing th e sent iment of over2,700 wealthy Asians.

How to Maximize Wealth Through Leveraging


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How to Maximize Wealth Through Leveraging

Real CapitalGains

1) Ass um ing ASB d ividends of RM3K is invested to co mp oun d a t 8% p.a . year ly,acc um ulated A SB = RM971K (10yrs ), RM1.731Mil (17.5yrs) & RM2.097Mil (20yrs )!2) Ass um ing c l ient d id n ot take loan but o nly s aves RM1,000 a mth, need 17.5 yr s toaccum ulate ASB RM450K (with co mp oun ding in teres t 8%)

Before leveraging After Leveraging with AIA FIXED RATE

Liabilities (RM530K) Liabilities (RM980K)

Loans RM400,000 @ BLR-2.20%Instl: RM2051

Loan RM980,000 @ 4.85%Instl: RM5171

Credit Card @ 18% RM 30,0005% RM1500

Settled

Personal Loan @ 7.60%

RM 100,000 Instl: RM1193

Settled

Total loan payments: RM4744 Total loan payments: RM5171(Additional payment of RM427 )

Assets (NIL) Assets Created (RM450K)

No savings.No assets

ASB RM450,000 @ 8% p.a. returnsIncome : RM3000 per month

Nett : RM 2,171 (RM5,171 RM3000)


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Case Study

Real CapitalGains

HOW DO YOU MITIGATE THE RISKS BY USING CREDIT TOINVEST?

Take loans whereby interest is capped such as AIA fixed ratehousing loan. BLR loans will subject investors tofluctuating BLR which may even put you at a loss eg an

increase in BLR by 1% & 2% would have increased interestcosts to RM214,196 and RM439,598 (based on loan ofRM980K @ BLR-2.20% for 30years)

Invest carefully ensuring your asset yields constant returns and

are principally secure.


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Cashout for ASB (Amanah Saham Berhad)

Property brought in 2006

Purchase Price = RM400,000

Loan Taken = RM360,000 (@ 30 yrs)

Monthly Instalment = RM2,159*

Same Property now in 2011

Current Market Value = RM700,000

Loan Balance = RM334,500 (est)(@ ~ 25 yrs left)

Re-finance to AIA @ 4.85%p.a., 25 yrs(without cashout)

Loan Taken = RM334,500

Monthly Instalment = RM1,927

Total Savings = RM69,600

Re-finance to AIA @ 4.85%p.a., 25 yrs

(with cash out o f RM200,000 for ASB )AIA Cost of Funds = 4.85%p.a

ASBs Annual Returns = 8.77%p.a. **

Net Profit = 3.92%p.a.

What You Gained!!# Savings From Loan Ins ta lments

of RM 69,600.

# Net Prof i t From Ad di t ionalCashou t via ASB of 3.92%p.a.

o rRM196,000*** for rem ainin g 25 years. * Based on interest rate of 6%p.a.

** ASBs annual returns is based on average last 3 years

(2007 2009) net distribution and bonus per unit.*** RM200k x 3.92% x 25 years.

OR

AIA HOME LOANS


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AIA HOME LOANS

ITS TIME TO MAKE THE JUMP!!

NO MORE HURDLES TO SWITCH THEIR HOME LOANS TO AIA


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Enjoy LOW, GUARANTEED fixed rates. Avoid hardships when

BLR goes up. Maximize SAVINGS by restructuring & consolidating loans

Maximize INVESTMENT RETURNS by leveraging on currentproperty .

No barrier to refinance with Banks removal/reduced early exit fee

No costs to refinance with AIA Zero-Moving Cost package.(Valuation, legal fees, stamp duty, disbursement for loans areabsorbed by AIA)


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DOCUMENT REQUIREMENTS


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What documents required :

CATEGORY EMPLOYED SELF-EMPLOYED

Personal ~ NRIC ~ NRIC

Income ~ 3 mths latest payslips; 6-12 monthspayslips if including commission /allowances

~ Latest EPF Statement;

~ Letter Fr Employer(if required)

~ 3 years latest Borang B + taxreceipts;

~ 3 years latest financials (P&L) forSdn Bhd company; (if required)

~ Form 24 , Form 49 and M&A(1st pg) for Sdn Bhd company;

~ Borang A & Borang D for sole-proprietor / partnership.

Bank ~ 3 mths latest Savings a/cstatement; 6-12 monthsstatement if including commission /allowances

~ Credit Card statements(if required)

~ 6 months latest personal Currenta/c; (if required)

~ 6 months latest company Currenta/c.

Property ~ SPA (if available)

~ Purchase confirmation

~ Title Deed (if available)

= SAME =

SPREAD THE GOOD NEWS & MAKE YOURSELF


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PROMINENT

USE HOME LOANS TO TIE UP WITH MANY CHANNELS

1) SMS and reach out to your policyholders, friends and public eg :-

Good news ! AIA Home loan fixed at 4.85% and 5.25% (zero m oving cost) for w hole loan tenu re!No penalty for early sett lement f rom savings , EPF & sale of pro perty. Financial stabil i ty & p eaceof m ind w hen pr ices , BLR increas ing. For m ore info , ca ll HP :

2) Distribute flyers to your neighbourhood Make yourself a prominentFinancial Consultant in your neighbourhood.

3) Email blast/ Facebook/Twitter to your clients, friends and everybody.

4) Conduct Road Shows & Set up Booths to get leads.5) Source from panel of lawyers.

6) Obtain leads from Real Estate Agents.

7) Use your contacts to penetrate MNC, corporates, panel of developers.

8) Advertise in metro classifieds.


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DOOROPENER

-How to securemore appointments-How to use loan tosell more insurance

FREE MORTGAGE HEALTH CHECK


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FREE MORTGAGE HEALTH CHECK

BLR has increased by 1.05% since last year & isexpected to rise again in the near future.

Just Ask 2 questions?Q1 : How much more additional interest will you be paying?

Q2 : How much longer your loan tenure will be extended?

A simple Mortgage Health Check can help you :-1) Know your actual financing position2) Cut the no. of years off your loan3) Save in interests costs4) Structure your loans to maximize returns

GET A FREE CONSU LTATION TODAY!!


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MORTGAGE HEALTH CHECK CALCULATOR

NEW AIA SHOP LOAN RATES


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NEW AIA SHOP LOAN RATES

AIA MORTGAGESAVE Interest Rates

Non Zero MovingCost (NZMC)

Package 5.55% p.a. Fixed for entire loan tenure

Zero Moving Cost(ZMC) Package

5.79% p.a. Fixed for entire loan tenure

AIA FIXED RATES


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AIA FIXED RATES

Who can apply?Individual Malaysian Citizens or permanent residents.

Commercial Properties FinancedCompleted commercial properties with Certificate of Fitness for

occupancy.

Completed shophouses with or without individual or strata titles.

For leasehold land, the unexpired land lease must be at least 50 yearsupon maturity of the loan.

Subject to minimum required marketability factor of 7 by our panel ofvaluer and site visit.

AIA FIXED RATES


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AIA FIXED RATES

Commercial Properties FinancedFactories, commercial retail lots and offices are excluded.

Commercial properties on Malay Reserve or native land, located atlandslip/flood prone area/Oxidation pond/power station and any

negative factors that affect the open market value would also beexcluded.

Selected commercial areas located in Klang Valley and Selangor.


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AIA FIXED RATES


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AIA FIXED RATES

Loan Tenure Minimum : 5 yearsMaximum : 30 years(Maximum age upon maturity of the loan is 65 whichever is earlier).

Minimum Loan : RM 300,000

Margin of FinancingNew Purchase : Up to 80%Refinancing : Up to 70%(based on open market value (OMV) or purchase price whichever is

lower)

CONTACT US FOR MORE DETAILS:


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CONTACT US FOR MORE DETAILS:

KUALA LUMPUR Tel: 03-2056 3333 Fax: 03-2056 3325

Sam Wong DL: 03 -2056 3341 H/P: 012-290 0386

Allison Ng (North / East Msia) DL: 03 -2056 3383 H/P: 012-233 6693

Darren Yap (Kuantan) DL: 03-2056 3387 H/P: 012-621 9152

Teresa Sia (Johor State) DL: 03 -2056 3343 H/P: 012-690 8788

Sze Ling (Melaka) DL: 03 -2056 3323 H/P: 012-222 1636

Mohd Amin (Seremban) DL: 03 -2056 3353 H/P: 016-623 0990Victor See DL: 03 -2056 3319 H/P: 012-346 0656

PETALING JAYA Tel: 03-7680 8686 Fax: 03-7680 8655

Qua Boon Leong (Klang) DL: 03 -7680 8625 H/P: 012-372 0291

PENANG Tel: 04-222 6262 Fax : 04-222 6300 Lau Beng Hock DL: 04-222 6301 H/P : 016-442 6301

(Northern & East Msia)

E il l @ i

Documents

Mortgage Training Slides Single License 2013