Glossary |
Description |
Acceptance Letter |
A letter from the application indicating his willingness to accept the loan after the loan is approved by the banking institution. |
Application Form |
A form used to apply for loan. |
Appraisal/Valuation Report |
A written analysis of the estimated value of real estate prepared by a licensed Valuer/Appraiser. |
Base Lending Rate (BLR) |
A minimum interest rate calculated by financial institutions based on a formula which takes into account the institutions' cost of funds and other administrative costs. |
Commitment Fee |
A fee charged by the financial institution for setting aside funding that are not utilised by the borrower. Usually only applicable to overdraft facility. |
Default |
Failure to pay the monthly instalment/interest payments to financial institutions when due. |
Disbursement Fees |
Various type of fees such as registration of charge fee, land search fee, bankruptcy search fee incurred by financial institutions and solicitors attending to the loan documentation in relation to the loan which are payable by the borrower. |
Documentation |
A set of agreements, forms, and other documents to be signed in connection with a loan. The documentation will form a full set of records for the loan. |
Downpayment |
An initial payment made by the buyer to the seller of the house. |
Financial Institutions |
All commercial banks and finance companies licensed under BAFIA 1989 and Islamic banks licensed under the Islamic Banking Act 1983. |
Flat Rate |
A term to describe interest that is charged as a fixed percentage of the loan amount throughout the tenure of the loan. The flat repayment amount is usually determined before the commencement of the repayment programme. For example, interest charged on a RM 10,000 loan at a flat rate of 10% per annum is RM 1,000 annually until the loan is fully settled. |
Floating Rate Loan |
A term used to describe a loan, where the interest charged fluctuates due to the rise and fall of a certain indicator such as the Base Lending Rate. |
Foreclosure |
Legal action available to the financial institution for recovering outstanding sums owed by a borrower who has defaulted on his/her loan. The property pledged by the borrower to secure the loan is sold and the proceeds of the sale used to settle the outstanding loan amount. |
Graduated Payment |
A scheme that allows the borrower the flexibility to pay a lower instalment sum at the beginning of the loan tenure before progressing onto a higher instalment sum as the borrower's purchasing power improves. |
Gross Monthly Household Income |
The sum of gross monthly pay of all working family members before deducting income tax, Socso, EPF, loan instalment or other deductions plus any additional income from overtime, commissions and other sources. |
Guarantor |
Person or entity who is legally bound to pay a debt incurred by the borrower if that borrower fails to pay. |
Homeowners Insurance |
An insurance policy that combines liability coverage for a homeowner together with protection from damages caused by wind, fire, vandalism and other risks. |
Interest Rate |
The amount charged by the lender to the borrower for borrowing a sum of money expressed as percentage of sum borrowed. |
Late Charge |
A penalty charged by financial institution for not paying instalment due on time. |