The Skim Rumah Pertamaku – My first Home Scheme aids young adults who recently joined the working class own their first home. This scheme is designed to help those who earn not more than RM 5000 per month to become homeowners and the scheme was conceptualized in the Malaysian budget of 2011. With a lower income many of these young individuals would have a tough time coming up with a down payment of up to 10% and this scheme allows them to obtain financing from financial institutions for up to 100% bypassing the need of a down payment.
Participating Banks : This scheme was introduced by the government in 2011 to increase home ownership and as a result many financial institutions have taken part in this scheme and help in providing 100% finance for qualifying properties.
The banks participating in this scheme are as follows; Affin Bank, Alliance Bank, Alliance Islamic Bank, AmBank, AmIslamic Bank, Bank Islam, Bank Muamalat, CIMB Bank, CIMB Islamic, Hong Leong, Hong Leong Islamic Bank, Maybank, Maybank Islamic, OCBC, OCBC Al-Amin, Public Bank, Public Islamic Bank Berhad, RHB, RHB Islamic, Standard Chartered, Standard Chartered Saadiq and UOB.
Features of My First Home Scheme:
- The My First Home Scheme provides a financing limit of up to 100% and has a maximum tenure of 35 years provided the borrower does not attain the age of 65 years at the end of the tenure.
- The loan provided under this scheme is an amortizing facility with no redrawable features provided.
- The loans under this scheme are available both in conventional forms and Islamic forms and can be availed only to purchase residential properties.
- The loan requires the borrower to take out a compulsory fire insurance or fire takaful
- The loan instalments need to be paid either through standing instructions or through automatic salary deductions.
- The loan amount that can be availed should be such that the repayment instalments should not exceed the lower of 60% of the net monthly income or 60% of the maximum financing limit of the participating bank.
Benefits of my First Time Home Scheme:
- The scheme allows for 100% financing helping those young individuals that earn less than RM 5000 a month to become homeowners.
- The loans are available in a conventional form as well as a Shariah compliant Islamic form.
- The loans cover both under construction and completed residential properties.
Eligibility Criteria for My First Home Scheme:
- The applicant must be a Malaysian citizen who is over the age of 18 years but under the age of 40 years as at last birthday.
- The individual must be a first-time home buyer to take part in this scheme.
- The individual must earn an income of less than RM 5000 per month or the loan can be applied by joint applicants whose household income does not exceed RM 10,000 a month
- The loan instalments cannot exceed 60% of the net monthly income.
- The loan applicants need to be employed in the private sector which is inclusive of statutory bodies that do not provide a government housing loan or housing facility.
- The properties that are to be purchased under this scheme can only be residential properties located in Malaysia that have a minimum property value of RM 100,000 with a maximum value of RM 500,000
- The properties that are to be financed by this scheme are to be owner occupied which is to say that the owner must reside in the purchased property.
Documents required to avail My First Home Scheme:
- The applicant must have a copy of both sides of the NRIC.
- The latest 3 months’ salary slips.
- The latest 3 months’ bank statement reflecting the salary credited.
- Confirmation letter from Employer or employment letter displaying income details, job title, date of joining etc.
- The latest Form B/BE with payment confirmation receipt.
- Latest EA form.
- Any additional deposit statement such as an ASB certificate, Bonds or Fixed Deposits.
- Any additional documents such as Property booking receipt or title copy or Vendor sales and purchase agreement that may be required by the participating bank.
Fees & Charges involved for My First Home Scheme:
The fees and charges involved are lawyer fees for sales and purchase agreement which can be estimated at 3% to 4% of the purchase price, lawyer fees for loan agreement which can be estimated at 2% to 3% of the loan amount, stamp duty which is exempted up to 50% if the property value is RM 400,000. The exemption on stamp duty is available till 31st December 2016 and valuation fees which is required for completed properties.
The fees and charges involved will differ based on the participating bank the applicant is availing the loan from and is subject to change.
Frequently Asked Questions:
Q) Does one need to pay higher profit rates or interest rates to avail 100% financing?
A) No. The applicant has to only pay the normal financing rate of the participating bank to avail 100% financing limit.
Q) Can self-employed people with meeting income requirements avail this scheme?
A) No. The scheme is open only to those individuals who meet the age and income criteria and are employed in the private sector including any statutory body that does not offer housing loan/financing facility.
Q) Is a fire insurance or MRTA or MRTT compulsory?
A) Yes. The fire insurance/takaful is compulsory and has to be purchased by the applicant but a Mortgage Reducing Term Assistance/Takaful (MRTA/MRTT) is subject to the requirements of the participating bank the applicant has availed the loan from.
Q) What type of properties can be purchased under this loan?
A) The ‘My First Home Scheme’ covers only residential properties both completed as well as under-construction. The location and type is also subject to the underwriting policy of the participating bank the applicant is availing the loan from.