The best home loan service Borrow with Care for Cambodian Home Loaners So you’ve decided to buy. Congratulations! The next question is “How do I finance my new home?”
The process of choosing a home loan service and a lender can be quite compicated, but if you tackle it in stages you can avoid disappointment, frustration and wasted time. It is important to choose a loan that suits your needs so that you aren’t paying for features you can’t use. The flexibility of the loan is also important as your per sonal and financial circumstances may change in the period of the loan.
“How do you choose a reputable lender in Cambodia? With more than 35 com mercial banks operating in the Kingdom, it can be overwhelming to make the right decision and ensure that your lender is conducting its business in a legal and ethical manner,” says Jessica Sander, home loan service Specialist and content writer at Realestate.com.kh
This is absolutely critical in a developing market such as Cambodia. The majority of home loan service in Cambodia are provided on flexible interest rates, which means that if your bank wants or needs to change your interest rate during the loan term, then they can. With that in mind, always choose a bank with a trusted reputation and a solid financial position
“If you ask a question to your bank lender and they can’t answer you properly, your best bet is to keep looking,” advises Joe Phelan, Head of Personal financial Ser vices at Hong Leong Bank Cambodia. “Find a bank who has a team of experi enced lenders, not Jacks of all trades:’ “Borrowers need to take serious consid eration before making any decision to take on a mortgage,” adds Long Chhay, Canadia Bank’s Head of Secured Lend ing Business Department: “One of the primary points of interest for the bank is to make sure that the buyer has sufficient proof of income to cover the loan repayment. So keep this in mind regardless of which bank you choose.” Most commercial banks are generally similar when it comes to upfront costs. Typically, you are expected to pay a loan approval fee (or processing fee), legal fees for the preparation and registration of your mortgage documents at the land titles office, a valuation fee and an insuance fee for basic fire cover over your property.
“The main point to look out for is hidden costs Oi clauses around upfront fees and paying off your loan early either partially or in full,” advises Phelan, “most banks will have a three percent early repay ment fee if you make any extra payments or want to pay off your loan within thre years, though some banks’ fees are high er and longer.” Long advises that home buyers should ask detailed questions regarding the mortgage’s terms and conditions, “they should ask about the application process ing fee and if it is paid up front or annu ally; how long it takes to obtain approval for the loan request; and how monthly re payments are to be made – is it by cash or automatically debited from the borrower’s Banks Squared Lending rates is an essential feature to shop around for. With so many banks on the market, you can afford to take your time and find a com petitive rate.
“Rate is always a key factor in deciding which bank to go with, but most banks these days are pretty similar so just make sure your home loan service rate is not open to fluctuating change that your bank lender can’t explain,” says Phelan, “a good safe option is to go with a bank that has an explainable structured approach which is typically an effective cost of funds plus a margin approach.”
Long suggests that home buyers should seek clear information around the inter est charged during loan tenor and if the rate is ·floating or fixed at the same rate throughout.
What about ongoing fees and costs connected with the loan?
Some banks don’t have any ongoing fees associated with the loan and provide customers with a fee-free bank account to make their loan payments from. Make sure you ask in detail about ongoing charges related to your mortgage.
Another loan feature worth considering is portability. This is necessary to learn about if you intend to increase your prop erty portfolio by purchasing an additional property or selling your current home to buy another. This may involve a fee but it will be considerably less than the cost of establishing a new loan.
Most banks will endeavour to help their customers bridge the gap between the sale of their home and the purchase of a new property. This means the lender assists their customers who have bought their new home prior to selling their exist ing home.
Some banks can be inflexible even if you have sold your house and need to pay off your loan to release the title for proper ty transfer ownership warns Phelan, “be careful of this one as it could mean a show stopper for your sale.” duce the instance of people refinancing to anothe r bank.
The main message when hunting around for a home loan service in Cambodia is to ask plenty of questions. Be informed. Under stand what you are potentially agreeing to. Hold lenders accountable to answer your questions. Look for professionalism.
“Ask questions especially around bank policy,” says Phelan, “some banks are very strict and you will find yourself spending a lot valuable time only to find out they can’t approve your loan after weeks of processing. On the other hand, some banks will hardly ask for anything and say yes to everything, which is a wor rying sign around ethical responsibility.”
He adds that some banks insist that you provide at least three months’ notice if you wish to pay off your loan early and that this is often used as a tactic to reduce the instance of people refinancing to anothe r bank.
The main message when hunting around for a home loan service in Cambodia is to ask plenty of questions. Be informed. Under stand what you are potentially agreeing to. Hold lenders accountable to answer your questions. Look for professionalism.
“Ask questions especially around bank policy,” says Phelan, “some banks are very strict and you will find yourself spending a lot valuable time only to find out they can’t approve your loan after weeks of processing. On the other hand, some banks will hardly ask for anything and say yes to everything, which is a wor rying sign around ethical responsibility.”
