Are you planning to buy a house on your own? However, with the recent hike in property’s price over the years, it has become financially unaffordable for you to buy a house. There are many available schemes you can look into, such as PR1MA and so on. But with many restrictions, limitations and criteria such as age, income level and the balloting process, it is not easy to get selected. People who are not qualified for the homebuyer schemes could withdraw money from their EPF accounts to fund their downppayment. This article will guide you through the benefits of using your EPF to buy a house.
Withdrawing money from your EPF account to buy a house comes with benefits as well:
2. Affordable monthly installment Withdrawing money from your EPF accounts to pay for downpayment will help you release your financial burdens by paying lesser monthly instalment. 3. Save on housing loan’s interest rate You can use the money you withdrew from your EPF account to pay off the high interest rate and save the remaining interest cost to fund other miscellaneous costs. 4. Helping spouse You can pay for your spouse’s home loan and help reducing his or her financial burden. Withdrawing money from your EPF do come with some drawbacks as well, such as: (a) Retirement plan After withdrawing money from your EPF account to buy a house, your retirement plan will surely be affected. So make sure you have other retirement savings or plans before deciding on withdrawing money from your EPF account to buy a house. (b)Reduced dividend earning When you withdrawing a huge sum of money from your EPF account, you are also earning less from the dividend earnings of 5%-6% per annum. (c)Account 2 money withdrawal You are only allowed to withdraw money from Account 2 and not Account 1 where it holds majority (70%) of your monthly contributions. Buying a home on your own If you are buying a property on your own, you are allowed to withdraw the difference between the loan amount approved and the price of property, with an additional of 10% property’s price. Or you could withdraw all your money in Account 2, whichever that is lower and more than RM500. Buying with only cash and no loan If you are not applying for any bank loans and intend to pay with cash, your withdrawal limit would be the property’s price with additional 10% or all your money in Account, whichever than is lower and not lesser than RM500. Although withdrawing money from your EPF account comes with some restriction, do note that you are withdrawing the money mainly for one purpose, which is to make buying your first own home possible in Malaysia. If you have tried applying for homebuyer schemes but did not get qualified and you need help in funding, you can always choose withdrawing money from your EPF account.
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