Every home buyer will need to secure a mortgage to finance the purchase of their new house. In addition, to be qualified, you must have a good credit score and enough cash for a down payment. Without these, the traditional route to home ownership may not be an option. But how many future home buyers will have the financial literacy and assets required before buying a house?
Most Malaysians can’t afford to purchase homes due to the skyrocketing price of properties in the country. Buying a home is already a major financial commitment, and inflation here is not helping. This is devastating, particularly among first-time home buyers, and explains why more purchasers in Malaysia are resorting to rent-to-own (RTO) schemes.
If you are still renting and wondering if you will ever be able to afford your own home, don’t worry. With RTO schemes, home buyers now have the alternative of renting a home for a certain period of time, with the option to buy it before the lease expires. RTO schemes and their various permutations offered by developers are a measure to help home buyers afford properties.
RTO Providers In Malaysia
RTO gives potential homeowners a chance to build their credit history and some additional time to save for a down payment. (Source: pexels.com)
HouzKEY is an RTO scheme by Maybank that helps house hunters to own a home. Just by paying a three-month refundable deposit, you can move to your new house immediately. Unlike the traditional way of buying a house, HouzKEY requires no down payment. Your monthly rental will be used to pay off your debt. Tenants are given the option to purchase the property after renting for at least one year, at a predetermined price. However, to improve your eligibility to apply, you will need three guarantors. Your application will be reviewed and approved within 24 hours.
2. PR1MA Basic RTO or PR1MA Zero RTO - PR1MA
PR1MA has introduced an RTO scheme for successful balloted applicants of 1Malaysia People’s Housing Programme (PR1MA) homes whose loans have been rejected by PR1MA’s panel banks. Eligible tenants are allowed to buy the property at a predetermined price after five or 10 years of renting. Home buyers have the option of PR1MA Basic RTO or PR1MA Zero RTO.
Under the PR1MA Basic RTO programme, part of a participant’s rental will go towards a Buyer’s Savings Account (BSA). This accumulated savings amount will be used towards payments for your house later, and will be refunded should the buyer decide to leave the scheme.
Meanwhile, PR1MA Zero RTO only includes monthly rental payments. Thus, there will be no refund given if you decide to leave the scheme without purchasing a PR1MA home.
Engaging in a rent-to-own scheme may be the best option for both buyers and sellers. (Source: pexels.com)
3. Stay Now and Buy Later - IOI Properties Group Bhd
This scheme by IOI Properties Group allows tenants to stay in a property from the developer without any deposit. Like any other RTO scheme, the Stay Now and Buy Later programme allows you to stay in and feel the vibe of your chosen property for up to 36 months before purchasing the property at a pre-agreed price. If you change your mind, you can get a full rental refund for up to 36 months.
This programme by The Ministry of Housing and Local Government (KPKT) helps ineligible applicants and future People's Housing Project (PPR) buyers whose loan applications were rejected by the bank. Tenants are given the chance to rent for up to two years before they decide whether to purchase the house or keep renting. Monthly installments for the scheme are as low as RM200, for up to 25 years’ tenure.
RTO schemes can definitely bring diversity to the property market and hope for struggling house hunters. Everyone knows there's nothing quite like being the master of your own domain. Now, with RTO schemes, you can own the house of your dreams. Connect with a trusted agent in your area now.
(By Elmia Kayok, 10 Jan 2019)
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