Question:
I bought a condo joint with my wife (my second property, wife’s first property). Recently we got a call from our lawyer office regarding the MOT are ready. I had received the quotation, and it cost close to 30k in total.
The question is, can these payments be put into an existing housing loan? Not like everyone can afford to fork out an amount of 30k suddenly ????
Thanks.
James
Answer:
Hi James, thanks for the question.
One thing that most people don’t aware of when buying an under-construction property is the Memorandum of Transfer (MOT) cost comes later.
When initially you purchase the property from a developer, you don’t require to pay legal fees and stamp duty.
Most of the time, the developer will absorb the legal fee for the Sale and Purchase Agreement. And you might end up paying a disbursement fee of RM500-RM1000 only.
That’s the beauty of an under-construction property. You can buy a house, stay in it and pay the Memorandum of Transfer (MOT) cost later.
Where else, for a subsale property, all these costs might have to pay upfront before getting a house key.
Now, you’re facing a hefty Memorandum of Transfer (MOT) cost, RM30k, because the property title is issued.
The thing is Memorandum of Transfer (MOT) cost doesn’t happen overnight, and anyone who buys an under-construction property should prepare long before the Memorandum of Transfer (MOT) comes. Memorandum of Transfer (MOT) takes 3-5 years or more before you’re required to pay such money – an advance Memorandum of Transfer (MOT) saving should be done earlier.
Anyhow, I believe you are not the only one facing such issues.
Well, I guess you can try to get a top-up home loan or personal loan from the bank to cover the Memorandum of Transfer (MOT) cost.
The interest rates will depend on the banks. Typically, home loan interest rates will be much lower than a personal loan. So, it’s better to talk to your existing bank before going with a personal loan.
Pro tip: Memorandum of Transfer 2020
a. Since this is your wife’s first property, depending on the year she purchased ( you might want to check the guidelines with LHDN), for a first-time house buyer, there might be a stamp duty exemption. If there is, you can save 50% of the stamp duty you’re paying.
b. Every Memorandum of Transfer (MOT) has an expiry date before a developer can penalize you for late transfer. So, you want to check the expiry date and don’t delay in doing it. The penalty can cost you a few thousand more.
c. By the way, the correct terms for this are the Perfection of Transfer (POT) instead of Memorandum of Transfer (MOT). But, anyway, it comes to the same meaning.
If you want to understand more about Memorandum of Transfer and perfection of transfer, you can click here. I have written a full article about it.
MEMORANDUM OF TRANSFER MALAYSIA
https://malaysiahousingloan.com/memorandum-of-transfer-malaysia/
Understand the Perfection of Transfer (POT) & Perfection of Charge ( POC )
https://malaysiahousingloan.com/perfection-of-transfer-perfection-of-charge/
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