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FreeThinker
10-05-2006, 01:23 PM
Anyone using the AIA home loan before? They have a very good package, 5.75% fixed if loan period is within 10 years. I thought of refinancing but would like to seek your advice since AIA is not a bank.

Questions are:
1. Is it govern by the same law or regulation since it is not a bank but an insurance company?
2. Anyone with AIA homeloan faced any tricky trouble before (Things not spelt out by sales but mentioned in the agreement/offer)?

I asked the sales why they could offer 5.75% fixed when the BLR is now 6.75%, the answer given was that AIA is not a bank so they do not have to follow the BLR. Normally, fixed Islamic rate will be about 2% higher than the current BLR rate. That's why I am suspicion.

burntan
10-05-2006, 01:30 PM
but AIA 5.75% fix rate is only offer to MNC or GLC employee if not mistaken.

There are some other "catch" in it as well, better read the fine prints.

So far the best homeloan package I know is from Southern Bank which offer flexi payment, up to 95% loan and FIXED BLR-0.8% from 1st year to end.

AmBank offer the same as well..... actually I applied both, waiting for their letter of offer to compare.

JoeJaffar
10-05-2006, 02:48 PM
ING too has a home loan package.

AIA's fixed rate loan is not an Islamic facility, it's just that it has a fixed rate similar to an Islamic loan. Maybe that's why they can offer a lower rate than the Islamic loan. And the fact that they're not a bank could probably explain it as well.

From what I know, and as what burntan mentioned, the 5.75% rate is only offered to GLCs, MNCs and a few other private companies, so do check whether you qualify or not. And you have to use their panel of solicitors and take up AIA's insurance, either MRTA or term life to cover the loan.

Boink
10-05-2006, 02:51 PM
Sorry. but I dont think it is offered to ONLY employees of GLCs, MNCs.

I would be rather shocked if there was such a rule.

but they are very selective of who the developer is. They only list a few developers as well as housing areas which they will offer this package to. Being a bit conservative, they tend to take projects that have a better track record.

As mentioned you need to take an insurance policy for the sum amount of loan, INSTEAD of an MRTA which is offered by banks.

suggest you call an agent, somewhere.

FreeThinker
10-05-2006, 03:26 PM
Thanks guys. It's already confirmed that they could offer 5.75% if the loan period is within 10 years. I actually am trying to find out what the fine prints are. You know, things that you will never find out from the sales. At the moment, the only weakness I find is that you have to take up a AIA insurance although you already have one. So this I will include in my calculation as well, as a cost to compare with the banks' offer. In their website they mentioned that either a life insurance or a Group Mortgage Reducing Term assurance.

So if any of you have experience with this AIA homeloan with some problems, it will be great if you could share with me. Anyway, I will try to find out from the sales(which I doubt they will provide the information).

Chofmy
10-05-2006, 03:42 PM
As far as I understand from the Mortgage Sales Advisor of AIA that this package (fixed rate program for 10 years) is opened for public, what need to be paid will be legal fees for loan agreement, MRTA, valuation fee, stamp duty & disbursement. There is no need to sign up a policy with them. The interest is calculated at daily rest, no penalty for early settlement and prepayment.

Thank you.

aRwEn
10-05-2006, 04:12 PM
hi.... i heard fr an AIA agent dat it iz offerd oni 2 existin clientz of AIA (ie policy holiderz) n employeez of public listed companiez n mncz (a letter fr d company must b provided).... if memberz of d public who dun hav an AIA policy wanna apply, i thk d rate iz slightly higher.... n d person told me it iz actuali 5.89% not 5.75%....

hmm.... now dunno wat 2 believ la.... :confused:

oso it iz: 5.75% BLR rite... how bout d ++... after everythin iz added up, izit 7.25% in total, so higher even tho iz it fixed rite? can sumwun clarify ah??

Chofmy
10-05-2006, 04:36 PM
It is at 5.75% fixed for 10 years. I have submitted my application today. My current one is with OCBC and the rate is BLR + 0.75%. I have a copy of the brochure, please let me know if you need one.

Thank you.

pcyeoh
10-05-2006, 06:38 PM
It is at 5.75% fixed for 10 years. I have submitted my application today. My current one is with OCBC and the rate is BLR + 0.75%. I have a copy of the brochure, please let me know if you need one.

Thank you.

You are sure that it is 5.75%?? I was told by those guys manning the special counter at my office last week that the rate of 5.75% has lapsed last week. The new applicants this week onwards are subject to 5.89% according to what aRwEn has stated.

totoro
10-05-2006, 06:49 PM
5.75% offer was for 10 year period max only.

If more than 10 yrs, it's 5.89% until 11th May after which this offer expires and rate will be 5.99%.

There is no BLR involved. It is 5.99% fixed rate for the entire loan period.

slappy
10-05-2006, 06:49 PM
AIA is probably able to offer fixed 5.75% because there are not governed by bank negara ruling, i.e. BLR. Their interest rate is determined by their cost of funds, which is probably lower than the bank, since AIA do not need to maintain so many branches and have many employees under its payroll. Say, if the COF is 3%, the spread of 2.75% is still good enough to make plenty of money. Bank on the other hand has higher COF, say maybe 4%, so even at 6.75%, there are justing getting the same 2.75% spread.

Just my 2 cents worth.

totoro
10-05-2006, 07:09 PM
From what I understand, to get the 5.75% (up to 10 yrs loan only)

1. Must be a completed LANDED residential property. Condos and townhses are not accepted. Commercial titles (e.g shophouses, service apmts) are not accepted
2. Market value or purchase price > RM 200K (within Klang Valley) or >RM 130K (if property is located outside of Klang Valley)
3. Minimum loan RM 100K

evelynlim
15-05-2006, 01:19 PM
I actually get a mortgage consultant to apply for my loans from UOB & AIA.
Both also has approved for my loan application & now waiting for their letter of offer. AIA did has a 5.75% fixed for a 10 years loan. I actually trying to apply for the corporate staff rate at 5.89% but not accepted as my co. not listed in their list & they are offering me 5.99% fixed for whole tenure & 6.25% is offering to the public. The condition is must buy their life insurance if not going for their MRTA. Of course you have to pay for all the moving cost. I think I will go for AIA home loan as forsee that the BLR is increasing & still can get back the premium at the end of the loan period.

mlkok
15-05-2006, 06:13 PM
There is a little catch with these loans. You have to get a life insurance coverage with them to cover the loan amount. The premium you pay will be more than the amount of savings from the interest and with every life policy, if you intend to clear off your loan early, you still be stuck with a policy with low cash value. These advertised rates are just to shift your attention elsewhere.

totoro
15-05-2006, 06:39 PM
There is a little catch with these loans. You have to get a life insurance coverage with them to cover the loan amount. The premium you pay will be more than the amount of savings from the interest and with every life policy, if you intend to clear off your loan early, you still be stuck with a policy with low cash value. These advertised rates are just to shift your attention elsewhere.
Not exactly. You can either take the normal MRTA (which most banks will require to to purchase anyway), or you can assign your existing AIA policy to your loan, or you can purchase a new life policy.

Bear in mind that buying a life policy is basically just that. You're not paying "pure loan interest with nothing in return", but rather, you're just buying a supplementary product. If course, you can always just go for MRTA instead. The choice is yours.

There is no con here.

aloy105
15-05-2006, 06:43 PM
Some basic factors whether to go for home loans fr Insurance companies or fr banks...
Ins.cos:: best for salary earners, fixed int.rates thus fixed installments, easy for budgetiing.No worries abt BLR going up or down in the future, Salary may go up but installments stays the same :) Ins.companies can be quite choosy on the type n location of properties, even on the criteria of borrowers, as overall their interest spread earned are lower than banks

Banks: best for non fixed income earners,,sales/business persons
loans be apportioned into part fixed term loan n overdraft..thus pays less interest when u hve the $ to reduce the o/s loan amt, n also hve available emergency overdaft when needed.But interest can go sky high if BLR shoots up :( .Since loan balance can go up or down according to yr usage, it can be quite dangerous if not careful in managing yr finance :rolleyes:

Insurance cover: almost every banks also need the borrower to come up with an insurance to cover the loan.And there are various types of policy/plans for such purpose.Moreover it is to the borrower's beneficiary benefit that the loan shd be covered by insurance, abate what type n fr which company. If a life policy is assign to cover the loan, the policy can be use to cover the new loan if n when the previous loan is settled prematurely :)

To conclude,, if a person intends the hse to be of long term (not investor mindset), with fixed salary,less headache on self financial management, go for loan fr insurance companies :)

just my 2cts worth ;)

Wild_Explorer
15-05-2006, 07:25 PM
Agreed that the offer by the ins co. are quite attractive and basically everyhting is fixed with minimal surprises. However do look out for the small print and hidden clauses. Try to get as much flexibility as possible so that you could do some prepayment to help save the interest cost. Just my two cents worth.

totoro
15-05-2006, 08:15 PM
Agreed that the offer by the ins co. are quite attractive and basically everyhting is fixed with minimal surprises. However do look out for the small print and hidden clauses. Try to get as much flexibility as possible so that you could do some prepayment to help save the interest cost. Just my two cents worth.
I checked, and for AIA loans, you can prepay at any time and it'll reduce your principal. You can also settle your loan at any time without any penalty.

FreeThinker
15-05-2006, 10:49 PM
I checked, and for AIA loans, you can prepay at any time and it'll reduce your principal. You can also settle your loan at any time without any penalty.

Actualy there is a minimum loan period, 5 years if I'm not mistaken.

totoro
15-05-2006, 11:04 PM
Actualy there is a minimum loan period, 5 years if I'm not mistaken.
Oh, apologies. I'm getting old. :D

From the AIA website:
1. Does AIA charge prepayment fee?
There will be a prepayment fee levied should the loan be refinanced within the first five years from the date of the first drawdown. The prepayment is chargeable at the rate of 0.35% times the number of remaining years of Loan (not exceeding 4% subject to a minimum rate of 2%) times the amount prepaid.

However, there is no prepayment charged when the loan is repaid with own savings, EPF or sale of property which makes it more cost-effective for customers who would like to settle their loan faster if they have additional cash.

The fee is only applicable if you are re-financing to another finance company.

I got this confused with other banks that are offering BLR-0.7% without early settlement penalty (e.g. Maybank, Public Bank).

alexhay
18-05-2006, 04:05 PM
does anyone know a good and responsible AIA agent that can consult me on the AIA homeloan, could you ask them to contact me....pls do pm me for my contact number..

aRwEn
18-05-2006, 11:48 PM
i heard dat islamic housin loanz fr bankz (whc r oso offerd 2 d general public) oso offer a fixed rate, w/o fluctuatn... how doez diz compare 2 d AIA homeloan'z fixed rate?

totoro
18-05-2006, 11:55 PM
Islamic loans fixed rates are generally quite a bit higher...

aRwEn
19-05-2006, 01:13 AM
hmm... so AIA is 5.99%.... izit reali true dat there iznt any ++? heard dat after addin everythin up, it comez up 2 almost d same as islamic housin loan.... n both r fixed ratez.... ie: they dun fluctuate....

:confused:

totoro
19-05-2006, 01:16 AM
there is no ++

jericho
19-05-2006, 03:04 PM
hmm... so AIA is 5.99%.... izit reali true dat there iznt any ++? heard dat after addin everythin up, it comez up 2 almost d same as islamic housin loan.... n both r fixed ratez.... ie: they dun fluctuate....

:confused:

as long as the insurance company don't make it compulsory for you to take up their insurance policy instead of 'group MRTA' then it is better than the conventional or islamic scheme.

The last time I got a quote from AIA for home loan, they quoted me an MRTA of more than 10K or insurance policy which will set me back close to 5k per year.

These insurance companies providing cheap house loan are banking on their sale of insurance policies to make money instead of from the house loan.

totoro
19-05-2006, 03:17 PM
as long as the insurance company don't make it compulsory for you to take up their insurance policy instead of 'group MRTA' then it is better than the conventional or islamic scheme.

The last time I got a quote from AIA for home loan, they quoted me an MRTA of more than 10K or insurance policy which will set me back close to 5k per year.

These insurance companies providing cheap house loan are banking on their sale of insurance policies to make money instead of from the house loan.

Again, MRTA is also compulsory for most banks, so it's unfair to say MRTA is a hidden catch. Rather, it's a norm even for banks. One bank loan package I know that doesn't require MRTA is one of Public Bank's package offerings, but not all packages though.

evelynlim
19-05-2006, 03:40 PM
UOB did approve my loan application without MRTA but with condition to take up their credit cards.

totoro
19-05-2006, 03:54 PM
UOB did approve my loan application without MRTA but with condition to take up their credit cards.
LOL ! That's cool !

I had a loan from UOB once. I asked them, 'btw, where's my free credit card?' and they replied, 'sir, it's not free.' so I cancelled it the next day.

lonewolf8
19-05-2006, 04:58 PM
The last time I got a quote from AIA for home loan, they quoted me an MRTA of more than 10K or insurance policy which will set me back close to 5k per year.

These insurance companies providing cheap house loan are banking on their sale of insurance policies to make money instead of from the house loan.

Very true on that. They quoted me around RM3K a year for life policy for a loan amount of RM180K in three years back. I asked it is possible for me not to take up any insurance policy from them. AIA said it is possible provided I assigned my current insurance policies to them i.e. changed the beneficiary of the policy to AIA instead of my parent. In the end, I opted UOB.

totoro
19-05-2006, 05:03 PM
Very true on that. They quoted me around RM3K a year for life policy for a loan amount of RM180K in three years back. I asked it is possible for me not to take up any insurance policy from them. AIA said it is possible provided I assigned my current insurance policies to them i.e. changed the beneficiary of the policy to AIA instead of my parent. In the end, I opted UOB.
I guess you can also opt for MRTA then, instead of life policy. These are terms and conditions of the loan, and they are being upfront about it. But sometimes, it's the agents who want to earn a bit more commission... but that's a different story.

aRwEn
20-05-2006, 12:46 AM
i heard dat AIA duznt accept all propertiez 4 their housin loan, oni selectd wunz upon approval.... duz anybody know wat iz their criteria on approvin d property concernd 4 a housin loan?

how duz AIA homeloan compare 2 ING homeloan?

totoro
20-05-2006, 02:33 AM
i heard dat AIA duznt accept all propertiez 4 their housin loan, oni selectd wunz upon approval.... duz anybody know wat iz their criteria on approvin d property concernd 4 a housin loan?

how duz AIA homeloan compare 2 ING homeloan?
You can refer to this list here for properties under construction:
Properties under construction - pre-approved list (http://img122.imageshack.us/img122/8479/developernew1205068uy.gif)

There are also properties that are in their reject list, which you can find out from any AIA agent. Basically their stringent selection criteria helps ensure a lower risk on their loan funds, which in turn helps support the lower loan rate given, so it's win-win.

USJ27Resident
20-05-2006, 02:40 AM
does anyone know a good and responsible AIA agent that can consult me on the AIA homeloan, could you ask them to contact me....pls do pm me for my contact number..

You can contact these agents:

Desmond Wong 017-362 8338
Rumi Yeo 017-8866 863

Or their office, Tel: 03-7620 0477

Chofmy
20-05-2006, 10:49 AM
For further information, you may go to Giant as there are AIA Agents to promote their home loan packages - fixed rates at 5.99% & 6.25%.

Thank you.

aRwEn
22-05-2006, 02:56 PM
i wuz told tday by an agent dat it iz nw 6.25% across d board whethr aia policy holider onot.... izit true ah? :confused:

evelynlim
22-05-2006, 05:24 PM
LOL ! That's cool !

I had a loan from UOB once. I asked them, 'btw, where's my free credit card?' and they replied, 'sir, it's not free.' so I cancelled it the next day.

The credit card that UOB offers is free for 1st year & is charge the 2nd year but can opt to cancel it. Anyway, I didn't take up the UOB loan but go for AIA home loan at 5.99% fixed and has signed the agreement last Friday.

Arwen, AIA also quoted me 6.25% earlier but my mortgage consultant managed to appeal for me at 5.99% with condition to buy the life insurance lah and of course the beneficiary is AIA until the full loan settlement.

aRwEn
22-05-2006, 06:45 PM
tx 4 d info everywun! :)

yes, i understand it iz 5.99% 4 AIA insurance policy holderz or mnc/corporate staff.... but i tried callin up 3 diff agentz who were referrd 2 me.... d 1st agent told me, it iz 6.25% across d board adee cuz it takez 2 wkz 2 process n they r raisin d percentage - 6.25% by mth end. d 2nd agent told me, it iz stil 5.99%.... d 3rd agent wuz outstatn n nt contactable....

wil meet up wit d 2nd agent 2 find out more... hehe... ;)

actuali i hav 1 of thoze UOB supposdly free 4 life credit cardz.... it iz d 2nd mth adee n i noticed they alwiz charge diz finance fee RM1.70 - RM1.85... wn i called tm up 2 ask abt it last mth, they reversed d chargez in diz mthz bill... but there iz a new entry 4 finance charge again in diz mthz bill.... if they charge me again nx mth or dun reverse d chargez, i wil cancel d card cuz it iznt reali free la tn...

ksj_cool
24-05-2006, 09:28 AM
There is also the risk of AIA hijacking the interest rate later because there is a clause saying that the 5.75% interest rate is the reserved right of AIA. They can change it if they really need it.

Processing is more stringent, maybe because their agents are not so exprienced, the ask for all sort of ducuments.

totoro
24-05-2006, 09:36 AM
I've not seen that clause before. Can you share where this is found? Thanks!

Also, the stringent processing is not due to the agents, but rather due to AIA's requirements.

evelynlim
24-05-2006, 10:29 AM
There is also the risk of AIA hijacking the interest rate later because there is a clause saying that the 5.75% interest rate is the reserved right of AIA. They can change it if they really need it.

Processing is more stringent, maybe because their agents are not so exprienced, the ask for all sort of ducuments.

The terms & condition on the letter of offer stated that: The interest rate described in this letter of offer shall be fixed for the relevant loan period and shall be varied at the discretion of AIA if:-(i) to (iv), and I summarised it as if only the borrowers default the instalment or in maintaining the MRTA/life insurance policy or the property is not owner occupied as stated in the application or event of default has occurred.
I don't think the processing is stringent as they approved my loan application within a week and didn't really ask me much. Maybe all my documents are in order & I'm not a bad paymaster & not much loans liability. :)

totoro
24-05-2006, 10:43 AM
The terms & condition on the letter of offer stated that: The interest rate described in this letter of offer shall be fixed for the relevant loan period and shall be varied at the discretion of AIA if:-(i) to (iv), and I summarised it as if only the borrowers default the instalment or in maintaining the MRTA/life insurance policy or the property is not owner occupied as stated in the application or event of default has occurred.
I don't think the processing is stringent as they approved my loan application within a week and didn't really ask me much. Maybe all my documents are in order & I'm not a bad paymaster & not much loans liability. :)

Maybe you're earning a good income too... :D

ksj_cool, the variation of rates is if the borrower defaults, etc. This standard condition is found in most of not all loan contracts for banks and not just AIA.

evelynlim
24-05-2006, 11:23 AM
Maybe you're earning a good income too... :D

ksj_cool, the variation of rates is if the borrower defaults, etc. This standard condition is found in most of not all loan contracts for banks and not just AIA.

If I'm earning a good income, I won't be going for fixed loan, I will go for flexi home loan :D

aRwEn
24-05-2006, 11:20 PM
i found out dat even a non AIA policy holder can git d 5.75% (10 yrz loan) or 5.99% (max 30 yrz or 60 yrz old) rate cuz once they buy d mrta or mlta (life policy), dat makez tm automatically an aia policy holder.... interestin.... but they emphasize gud credit ratin la... ie default on ur other paymtz, 4 eg, credit cardz, a couple of timez n it wud b difficult 2 git in la... hehe...

oso d minimum loan amt iz RM100k....

;)

totoro
25-05-2006, 12:40 PM
little bird: Pls note that AIA will be revising its 5.99% fixed rate to 6.15% w.e.f. June 1st 2006.

mike07
11-08-2007, 03:15 AM
If I'm earning a good income, I won't be going for fixed loan, I will go for flexi home loan :D

If I'm earning good money I rather go for a fixed loan (http://www.gmacmortgage.com) because it may end up lower in the end. I rather end up having even more money in the end and upgrade to a bigger house.

USJ27Resident
12-08-2007, 01:40 PM
Posted this in the Money Matter Section but since more flers read the main forum... I post again la... mebbe could do some good for some people..


Speaking about housing loans... For those that don't know, or have the time to kacau your bank...This is a trick on how to get your monthly loan repayment lowered..

Just go to ANY bank and grab a SPECIAL OFFER brochure that offers a BELOW BLR rate... (currently AMBANK is offering -1.35% below BLR)... then head to your bank that your house is mortgaged to... TELL them you are considering to moving your housing loan to (example: AMBANK)... unless they lower their BLR / loan rates [you need to show them the brochure from the rival bank]... I BET you they would, to keep you in their books.

I did just that... and guess what - I am saving almost RM250 p.m. or an est. RM3000 a year.. (10 years, can add up to 30 thousand from a 1.15% savings!)

coleslaw
12-08-2007, 01:55 PM
if you have many more years to service yr loan..a fixed loan is better...

now the blr is still low..so a minus percentage looks good and a small saving..what happens if it goes up?

nkent
05-09-2007, 03:26 AM
A fixed rate is always yr best bet to hedge against further increases in BLR.

AIA has the best fixed rate so far with 5.99% fixed for up to 30yrs loan or 5.75% for loan <=10yrs. Getting an agent who is professional is also important.

Try Eleen Wong 012 298 3944

La Vida Loca
05-09-2007, 12:46 PM
AIA has the best fixed rate so far with 5.99% fixed for up to 30yrs loan or 5.75% for loan <=10yrs. Getting an agent who is professional is also important.

Doesn't citibank and cimb bank has similar or lower rates now. came across their housing loan ads a few weeks back.