For those who are interested in going into property investment for the first time, please take time to understand how you are being charged for the loan by the bank.

What is Loan Amortization?

Wikipedia explains amortization as the process of decreasing or accounting for an amount over a period of time.

And if we are talking about real estate investment or property investment, amortization is a method for repaying a loan in equal instalments of which part will be interest due and the remainder will go to reduce the principal amount; the balance of the loan. As the loan amount is gradually reduced, a progressively larger amount will go towards reducing the principal.

For example, if you are taking a loan of $100,000 for 30 years at an rate of 6.75 (BLR (base lending rate of 5.75%) + 1%, the following is how your “Loan Summary” will look like. You will notice that you pay more interest than principal at the beginning of a loan period but at the end your payment goes more towards the principal. If you opt for 30 years to pay back your $100,000 loan, you only pay a monthly instalment amount of $648.60 but you ended up paying back $233,495.31 for a $100,000 loan of 30 years.

continue reading "Property Investment – What is Loan Amortization?"

Now you know where your credit score comes from, it will be easier for you to maintain a good score by following the rules to enhance your scoring:-

1. Check your credit score annually

Check out your credit score even if you are not looking at getting a loan. Not understanding and not knowing your credit score may be detrimental to your financial health. If you have not checked out your credit report, you many be surprised to find errors in them.

continue reading "Enhancing Your Credit Score"

“Credit Scoring” is your personal financial background computed by each country’s credit score organisations: some government link, some private to identify the level of your credit risk based on the following categories:

1. Payment History (35%)

The lender will usually look at whether you have paid your credit accounts on time, based on….

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The health of your credit becomes a very important factor in your personal finances. Bad debts, late payment, non payment of monthly instalment etc. comes into play as far as your credit score is concerned.

continue reading "This is How They Score You Up"

In America, the use of credit scores is not only concentrating on financing, it is now expanding to other industries like insurance etc. In Malaysia and other developing countries, credit scores are still a mystery among lay people. Do you know how your application for housing or car loan is being processed? Did you ever wonder why some banks or finance institution refuse you or offer you a lesser deal than the next customer? It all has to do with your credit score.

continue reading "Your Credit Score"