Buying low-cost house

I would like to know whether I can buy a low cost house or apartment if my income is more than RM2,500. Some agents told me that I could not but some also said that if it is a second hand property then it is not a problem. So am I able to buy a low cost property and if I could, what is the procedure?

A: No. The eligibility to buy low cost housing requires the applicant to have a household income of not more than RM2,000. The person must be a Malaysian citizen, aged 21 to 50 years old and is not a home or land owner. Buyers will also have to register with Syarikat Perumahan Negara Berhad (SPNB) before they can buy. For resale, the buyer will also have to seek permission from SPNB. For more information, you can log on to www.spnb.com.my.

Foreigner buying property in Petaling Jaya area

I am a foreigner working in Malaysia and I plan to buy a property in the Petaling Jaya area. I would like to know what the restrictions are or (are there) any guidelines for foreigners? And also would like to know what if I have a Malaysian wife and joint name to buy the property?

A: Foreigners are only eligible to buy residential properties that are valued above RM500,000 and this is subject to approval from the state authority. Apart from that, foreigners are not allowed to buy low and low-medium cost units, properties built on Malay reserved land, and properties allocated to Bumiputera quota.

If the property is registered under your Malaysian wife only, then it would not be subject to the foreigner restrictions. If it is joint name, the restrictions still apply if at least one of the party is a foreigner.

MRTA poser

I used a third-party company to help me look for a property mortgage. I was told by the agent that I had nothing to lose and everything to gain as she will do all the running for me. Her commission gets paid by the bank should the mortgage be successful. She helped me approach several banks for a loan and showed me a few rates for comparison, a service of which I am quite happy with. However, apart from the loan, she told me that some of the banks required me to buy MRTA from them. Is this the usual practice?

A: No, it is not necessary to buy MRTA or MLTA. Some banks highly recommend it as it ensures them that should anything untoward happen to the borrower, the mortgage can still be repaid. This not only protects the banks, but also protects the borrower from having to worry about repayments if they are unable to work due to serious injury or major illnesses. It also protects the borrower’s family as the mortgage can still be repaid and the property is protected. In your case, if you are not comfortable with the mortgage offer from the banks that attaches MRTA to the requirement, you can tell your agent to look for another that does not have that requirement. You might still want to look for a form of protection for your home though.

A2: Some banks require you to take MRTA or MLTA as it reassures them that the mortgage will still be repaid should anything untoward happen to the borrower. However, before you subscribe to that, you will want to know what does the MRTA or MLTA cover as it is in actual fact, an insurance policy. But to answer your question, no, it is not compulsory to buy MRTA from the lender – you just need to shop around a little more for lenders without that requirement.