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EPF/KWSP withdrawal – For deposit of house purchase

Q: Hi, I’ve now placed three per cent earnest deposit and sent the loan application to various banks. When is the best time for me to start submitting documents to Kumpulan Wang Simpanan Pekerja (KWSP) for Akaun 2 withdrawal? Normally when do we need to pay the remaining seven per cent deposit?

A: For EPF withdrawal you need the original Sales and Purchase Agreement (SPA) and letter of offer (for the loan) from the bank. The balance of seven per cent is normally due within 14 days but it also depends on the terms and conditions from the property seller or developer.

A2: You will need to show KWSP the original copy of the Sales and Purchase Agreement and loan letter of offer from the bank. As for the total 10 per cent deposit for the property, payment depends on the terms and conditions agreed upon during the purchase but it is safe to say that you will need to come out with the money upfront before your money from KWSP Account 2 will be released after application.

Where to buy a shoplot for investment?

Q: Where is a good location to buy a shoplot with a budget of RM700k to RM1.5 million in Selangor or Kuala Lumpur areas?

A: Puchong can be a good location to start looking due to the proposed LRT extensions from Bukit Jalil station. Property values will rise.

Shoplot investment

Q: If I plan to buy a shoplot, should I buy a new development, a completed shoplot or an existing shoplot that is tenanted?

A: Its depends on if the developer can be trusted or not. Some developers might just develope half way and then stop work because of some technical issues, which is waste of your time and money to wait for them. You have to know the location well before you buy any shoplot.

A1: It depends on the location and your investment profile. New developments are usually cheaper than completed ones in prime locations. But you will have to bear the risk of taking a loan and waiting for the developer to complete the project. Existing shoplots that are already tenanted are a safe bet, but they generally generate lower yields. You have to understand the area’s potential population catchment, exiting/proposed infrastructure, future developments and also do a survey of how other shoplots in the area are doing before you decide to buy.

Property valuation for housing loan

Q: I have just placed three per cent deposit (fully refundable) for a 2 1/2 terrace link house purchased through an agent with an agreed price of RM265k. I will now be sending a loan application to various banks for housing loan. I have heard from friends that I am able to mark up the loan amount based on the valuation or market price of the housing area. How do I go about it to mark up the loan amount? Will the bank provide us valuation report?