13 April, 2022

Property Guides

Let Mah Sing’s Mira guide you through common property terms and their definitions.

Buying your dream home is an exciting journey, but we know the research process can be challenging with new property terms. Let Mira guide you through six property-related terms you may encounter during your research and what they mean.

1. Debt Service Ratio (DSR)
Banks use this calculation method to determine if you can afford the loan you’re applying for. This allows the banks to estimate how much you can pay per month for your home loan based on your income and other debts (e.g., car loans, student loans, etc.). The DSR is then compared against the bank’s DSR eligibility criteria to determine if you qualify for the loan. A safe DSR to aim for is 40%, which helps prevent loan rejections.

The formula to calculate your DSR is:

Net Income (after deductions) ÷ Total Monthly Commitments (including the loan you’re applying for) × 100 = DSR %

2. Base Rate (BR)
This is the interest rate that the bank refers to from Bank Negara before deciding on the interest rate to be applied to your home loan. It is then calculated against the individual bank’s cost of funds and Statutory Reserve Requirement (SRR) alongside your credit risk, liquidity premium, operating cost, and profit margin.

Every Malaysian bank can determine its interest rate based on this formula—so be sure to research which bank can provide a better deal for you.

3. Bumi Lot
This refers to property or land that can only be purchased and owned by the Bumiputeras in Malaysia. The Bumiputera people include the Malays, Sabah and Sarawak natives, the Orang Asli of Peninsular Malaysia, and non-Malay Muslims. The Bumi Lot quota was created to increase the number of Bumiputera homeownership in the country.

4. Down Payment
This is the sum of money the buyer pays in the beginning stages of purchasing something expensive, such as a house or a car. A property down payment must be a minimum of 10% of the property’s purchase price. The remainder is usually paid off with a loan.

5. Vacant Possession (VP)
Here is a term you’ll look forward to in your home purchase process. Vacant Possession refers to the property handover process where you, the buyer, are handed the keys, to your new home. Congratulations!

6. Defect Liability Period (DLP)
Think of the DLP as a warranty period your developer provides you if you discover any defects after the VP process. Under the Housing Development Act (HDA) in Malaysia, the DLP is typically 24 months, beginning from the date you receive your keys. During these 24 months, examine your home for damages, defects, or signs of poor workmanship. Report them to your developer immediately so they can prepare for repairs.

Do you feel ready to own a home after mastering these terms? View our exciting launches now!

Follow us for more tips to know before purchasing your first home. Head to our Instagram and learn more from Mira.

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Admiral (R) Tan Sri Dato' Seri Abu Bakar Bin Abdul Jamal

Chairman/Independent Non-Executive Director

NATIONALITY: Malaysian

DATE OF APPOINTMENT: 1 August 2023

ACADEMIC / PROFESSIONAL QUALIFICATION(S)

Admiral (R) Tan Sri Dato’ Seri Abu Bakar Bin Abdul Jamal was the 10th Chief and the first four-star Admiral of the Royal Malaysian Navy. Admiral (R) Tan Sri Abu Bakar served the Royal Malaysian Navy for almost 40 years both at the staff and command levels culminating in the highest office of The Chief of Navy from 1998 to 2002.

Admiral (R) Tan Sri Abu Bakar was the former Chairman of Affin Fund Management Berhad and also the former Chairman of several companies covering diverse industries post his retirement including naval and marine, property development, construction and automative. He was also a former Board member of Lembaga Tabung Angkatan Tentera (Armed Forces Fund Board).

In recognition of his services not only to Malaysia but also towards promoting international and regional understanding and peace, Admiral (R) Tan Sri Abu Bakar was bestowed the Panglima Setia Mahkota award carrying the title Tan Sri. In addition, he also received international recognition in the form of the following awards:

  1. Bintang Jalasena Utama by Indonesian President Abdul Rahman Wahid on 28 August 2000
  2. Legion of Merit by United States President Bill Clinton on 6 October 2000
  3. Knight Grand Cross of the Most Noble Order of the Kingdom of Thailand by His Majesty King Bhumibol Adulyadej R on 24 February BE2544 (Gregorian 2001)
  4. Legion d’ Honneur by President of France, Jacques Chirac on 17 June 2001

There is no family relationship between him and any director and/or major shareholder of the Company.