Welcome back to another article about refinancing a home loan. This week, we will talk about Things You Need To Know Before Doing Refinance Home Loan in 2023.

Typically, people doing refinance to settle their debts and get some cash out from it. But, before you go ahead with a refinance home loan, we would suggest a few noteworthy points consider for your reading and learning pleasure.


Checking your lock-in period will be the number one point in the list. Let me explain why.

The Lock-in period is a minimum period where your home loan needs to stay with a bank. The period normally in the range of 3-5 years.

It means that within these 3-5 years, your home loan account has to be active with the bank. Being said that, you can’t sell, refinance or close the home loan account between those years.

If you insist on closing the home loan account by refinancing, selling the house, or even settling with your own cash, the bank will be imposed a penalty.

The penalty rate can be different from one bank to another. But the most common one will be 3% of the original loan amount.

If the original loan amount is RM500,000, the penalty is 3%, so the penalty fees are RM15,000. The bank will add this RM15,000 to your outstanding loan amount.

Let say if the outstanding home loan amount is RM450,000, and add RM15,000 = RM465,000. So, this is the amount that needs to be fully settled.

Usually, we will advise our client to avoid selling the house, refinancing, or fully settling during the lock-in period.

We think this is an unnecessary cost that you can avoid.


Everything usually comes with a cost. That includes Refinance Home Loan.

The cost involved in Refinance Home Loan is as follows.

a. Loan Agreement Lawyer Fee

The Loan Agreement Lawyer Fee is a fee for preparing the loan agreement between a borrower and bank.

It is included the professional lawyer fee, disbursement fee, stamp duty, and service tax.

The Loan agreement Lawyer Fee usually takes up to 2-3% from the original loan amount. For a smaller loan amount, it might take about 3%-3.50%.

If the Total loan amount is RM500,000, 2.50% is about RM12,500. Therefore, the Loan Agreement Lawyer Fee cost is about RM12,500.

Remember, this is a compulsory fee.

b. Valuation Fee

A valuation fee is a cost involved in preparing a valuation report by the bank’s panel valuer.

The fee usually in the range of 0.50% from the original loan amount.

This is also a compulsory fee.

c. Mortgage Insurance Fees (MRTA)

Mortgage insurance is insurance to provide coverage towards the borrower in the event of death and permanent disability.

This insurance is optional. You can refuse to buy this insurance.

However, refusing to buy the MRTA might cause higher home loan interest rates being offered by the bank.

d. Lock-in Period

As per my first noteworthy point, the lock-in period can be part of a cost if a borrower proceeds with the refinance home loan during the lock-in period.

You can avoid this by refinancing after the lock-in period.


It’s easy to steer out if you don’t set your main goal or reason for refinancing.

The goal can be as simple as settling all the higher interest rates debts, consolidating all debts to one account, or lowering monthly commitments.

It doesn’t matter what it is; you need to stay focused and ensure that the goal is achievable after the refinancing.

Stay focus and sharp with your goal.


I know cash-out is important. That is why you need to figure out how much the minimum and maximum amount you need.

You need to know the minimum amount because you might not get the maximum cash-out most of the time.

If your minimum amount is RM100,000 cash out, and you get anything less than RM100,000, you can decide by saying it is not worth proceeding with a refinance home loan.

The reason to set the maximum amount is for you to plan the cash-out, not to be gone before you know it.

And also, to know how much monthly installment you’re paying more because, let’s be honest, the monthly repayment definitely will increase.


I have been preaching about this in my articles and videos for years now.

Before getting any loans with the bank, regardless of home loan, personal loan, credit cards, et cetera, GET YOUR CCRIS AND CTOS REPORT PRINT!

Imagine this.

CCRIS and CTOS report are your only chances to know before the bank knows.

If there is something bad or poor conduct in the CCRIS and CTOS report. It would be best if you fixed it before the bank knows.

If the bank knows, before you do. There are not many things you can amend. Not only do you blow your chances now but also your future chances too.

Because the bank will have a record of why they rejected your loan 1 year ago, 5 years ago, or even 10 years ago, it will always be in their system.

It will directly or indirectly affect your future application because the remarks are always not good. That is why they reject your application in the first place.

So, get your hand on those reports.

The easy way is by downloading the CTOS app, pay RM25, and get the full report of CCRIS and CTOS report.

If you don’t know how to interpret the report, show it to us, and we will explain it for free!


Before submitting the refinance home loan application, you want to check the loan eligibility first. Do not take the chances!

Go in blindly without knowing what will hit you is exactly what the bank wants. They want you to show them the true you, but this is not the place to be vulnerable, especially if you have a history of bad and poor conduct.

Personally, I think everyone deserves a second chance, so don’t let the bank blows your chances.

We know that not everyone has perfect scoring or a perfect CCRIS and CTOS report, so let us help you fix your report card.

Come to us and let us teach you.

Even if you think you have the perfect report card, we advise you to check your loan eligibility still, be safe, or maybe get a second opinion; you might learn one or two things from us.

Let sum up all the things we know today.

  1. You want to check your lock-in period before going ahead with the refinancing plan.
  2. You should also know the cost of refinancing before apply for one. There are compulsory and optional costs.
  3. Dive deeper and ask yourself why you need to do a refinance a home loan? Once you find the answer, steer towards that reason or goal.
  4. Understand how much cash-out you need actually to fulfill your refinancing goal.
  5. Make sure to print the CCRIS and CTOS report from the CTOS app. It’s convenient, but it might cost about RM25.
  6. Last, don’t forget to reach us and let us help to check your refinance home loan eligibility.

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See you in my next article!

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