ASKING SEAN

In this episode, we will discuss about the interest that buyers need to pay during construction stage. Many may think that they only pay the initial down payment and nothing else until they get their keys which is totally inaccurate.
There used to be this scheme by the developers known as DIBS (Developer Interest Bearing Scheme). But it was taken out as a measure to prevent property bubble back then.
This is great question, as well as a great reminder to new purchasers.

[@aimanzhafir5571]

Nice video bro as usual. I notice a lot of people didnt know regarding the progressive interest. Last time before I purchase my 1st property. I asked around regarding the progressive interest and whether it will reduce our total loan principal or not. NO ONE KNOWS. They only said "oo only service interest loo not much one". But the reality is the interest that u paid will burned during the construction period especially if the construction nearly 80-90%, the interest is almost the same as the actual monthly that u need to pay after the construction finished.

[@IMCola996]

Good video sean! Actually missed this as well when applying for loan. Sales person did not mention anything at all regarding this progressive interest until the very last moment of signing SPA.

[@vineshrajoo2805]

Apart from DIBS, where you don't have to pay the progressive payment interest, buyers can also look for 'Build then Sell' housing projects. For example, the PPA1M project (for civil servants only) is a Build then Sell project. It is clearly stated in the agreement that you only pay 10% after signing the agreement and the rest of the 90% is only payable upon receiving the keys to the house. So no need to pay anything in between.

[@izzmalaysia8007]

Good to see a new video! Hope your coping well with the new busy work!

[@iherng]

Thanks man!! Appreciate the kindness=)

[@Skrr776]

Something to take note for people taking a Government loan (since statistically almost half the population is a govt servant): the progressive interest mentioned in this video works differently. What's mentioned is for conventional loans.
There's a clause in government loans from LPPSA that says: you will have to pay the full installment amount starting i.) 2 years from the date your loan agreement is dated OR ii.) when the project is complete, whichever comes first.
P.s. The terms might have changed when you read this comment but bear in mind govt loans work differently vs conventional loans. Check with the law firm preparing your loan documents.

[@eugenelim93]

heard that lppsa will cover the progressive interest of the project, is that true, Sean?

[@kitking6319]

You answered my question Sean! Really appreciate it and imagine my surprise when you mentioned me! Anyway good sharing once again and hope to meet you one day cos ur my real estate idol!
PS: I am gonna change that cringe IG handle soon haha..

[@JVLakk0]

Is progressive interest something add on to our approved loan tenure please correct me if my understanding is wrong? Can I ask the bank to start my repayment straight away upon signing to avoid paying progressive interest? Let's say LO indicated RM500K and monthly installment of around RM2500. I request the bank to start the repayment immediately upon signing the loan agreement. Does this make sense?

[@boqiang]

Good sharing answer!

[@ushitraa7701]

Thanks

[@iherng]

Thanks for watching!!

[@fishheadnoodle]

so let's say if I buy a unit during the construction phase, when it's 50% done already, then I'll just have to pay for the remaining 50% progressive interest?

[@iherng]

Pay whatever amount the bank paid on behalf loh :)

[@一支老油条]

Is that mean, we are helping developer to pay construction cost? 😱😱😱
We already paid for the property price let say RM500k++ (include interest) and the price we paid isn’t it has already incur the construction cost?
We (buyer) are paying two times construction cost?

[@sunny7907]

I wonder this too, means the earlier I buy the house, the more interest I got to pay for?
What if I only buy the house during the last phase let's say 90% construction already done, then I only have to pay for the rest of the 10% construction interest ka?

[@kahpoh2011]

@@sunny7907 Yes, the earlier you buy the house, the more progressive interest you got to pay..but the house price is lower
If you buy the house later, u pay less progressive interest but usually, the house price will go up
So after calculation, is actually almost the same..plus early buyer gets to choose their prefer units..late buyers only can get what is leftover
please take note that progressive interest is actually quite less and is paying according to the construction phase

[@amirfirdaus9419]

exactly what kind of was thinking, Sean can help to explain more on this?

[@platipus1987]

can u opt to pay some money toward the principle before the house is completed?

[@iherng]

Of course you can Eric. Just work with the banker that assisted with the application initially and do check if any extra cost are required.
Thanks for watching=)

[@JeffErin]

Super good drawing bro. hahah

[@iherng]

Thanks 😅

[@cadiboy04]

Is your ceiling/standing fan broken? Keep hearing some "loosen mechanic sound".

[@iherng]

Yea, it got loose hahaha. Sharp ears Cadiboy!!

[@cadiboy04]

@@iherng haha I would rather say you have a pretty good mic there lol

[@macdid5099]

Second here

[@RyanHong1989]

I am surprised first time home buyer don't know that they need to pay interest during construction period... Shocking.

[@kitking6319]

A lot of people dont know actually. Cos my parents bought house dulu2 under DiBS