chap 8 (home automobile)
DESCRIPTION
jnoijTRANSCRIPT
Chapter 88-*
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Content
8-*
3 types of categories – New, Used & Leasing
Consider on this elements:- your commitment, budget, price of the car, insurance @ Takaful coverage, Maintainance cost, Parts and others.
Purpose of your buying :- own use/Family/ business/ and others.
© 2013 Pearson Education, Inc. All rights reserved.
8-*
New
Used
Leasing
Price
High/expensive
-
Natural
High due to the price expensive
Cheap as compare to the new one event the Ijarah rate are high
Depand on the lessor. Normaly lower than the installment
Ownership
Yes
Yes
No
Warranty
Yes
No
8-*
Zero deposit or some case 10 % from original price
Depand
8-*
8-*
(a) In direct Financing
In direct financing, you get the fund directly from the conventional bank, islamic bank, credit union or finance company.
You agree to pay, over a period of time, the amount financed, plus a finance charge @ Ijarah profit,
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Product types : Hire Purchase
Product definition : The facility is given to you to part finance the purchase of a motor vehicle. Upon approval of the facility, a Hire Purchase Agreement shall be entered between you as the Hirer and bank as the Owner of the motor vehicle. The interest for the HP facility is calculated based on fixed or variable rate over the tenure of the facility. Upon payment of the amount outstanding under the facility, the ownership of the vehicle will be transferred to you. The tenure of the facility shall be up to a maximum period of 9 years only.
© 2013 Pearson Education, Inc. All rights reserved.
8-*
8-*
Car dealer seek bank for credit facilities
Contact customer for the details and supporting documents e.g pay slips and others.
Credit approved, customer pay 10% deposit and bank pay the remaining balance
Sign the Hire Purchase agreement and customer pay the installment to the bank. At the end, customer buy the car from the bank
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Named of the product :AITAB / HP-I
Product definition : Hire Purchase-i financing is a Shariah-compliant financing product caters for the needs of customers seeking an alternative to the conventional Hire Purchase product. It is provided for financing of asset calculated on fixed rate and variable rate. The ownership of the asset remains with the Bank until settlement of the financing. The operation of the financing is governed by the Hire Purchase Act 1967
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Automobile Decision
Shariah concept: Hire Purchase-i financing embraces the Shariah concept of Ijarah (Lease) and subsequent Bai' (Sale) also known as Ijarah Thumma Al-Bai (AITAB). Based on the Wa'ad (promise) made by the customer to buy the asset, the asset will be sold to customer at an agreed priceupon expiry of the lease tenure.
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Repayment period
New passenger car, 4WD, MPV and SUV (CBU and CKD units)
Maximum of 90% of dealer's/seller's invoice
up to 9 Years or 108 months
Secondhand passenger car, 4WD, MPV and SUV
Maximum of 85% of dealer's/seller's invoice
Unregistered reconditioned (imported) vehicle
© 2013 Pearson Education, Inc. All rights reserved.
8-*
For Used card
Type of vehicle
8-*
(ii) Pay slips
(iii) Bank Account
(ii) Bank Account
(iii) Audited Account
8-*
(b) Direct Financing
In dealership financing — another common type of vehicle financing — you get financing through the dealership. You and a dealer enter into a contract where you buy a vehicle and agree to pay, over a period of time, the amount financed plus a finance charge.
Example Toyota Capital Malaysia
Another option for customer for obtaining the financing
Additional variety plan and package: example Toyota 2 tier plan, Toyota drive and others.
New in Malaysia
8-*
Types of house : Landed property (Single/Double storey/Semi-D/Terrace/Bungalow/ Apartment/Flat)
Consider on this elements:- your commitment, budget, price, insurance @ Takaful coverage, Maintenance cost, Location, facilities and Others.
Purpose of your buying :- Own use, Investment (Rent or Sale)
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Home selection: How do you select a home?
Looking for a home: is a dilemma on needs and wants.
Obtaining a House
Guard with M16
8-*
2. Location :- Consider on this important place
(i) School
(ii) Public transport – Bus Station, Taxi Station, Train and etc.
(iii) Police station
8-*
© 2013 Pearson Education, Inc. All rights reserved.
8-*
8-*
8-*
Name of the product : Mortgage home loan
Product definition :The product is a mortgage loan/credit facility secured against residential or commercial properties. Nonetheless, additional security such as fixed deposits, guarantors etc may be requested depending on the credit assessment
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Financing purchase of residential or commercial properties
Refinancing of an existing mortgage loan from another financial institution (eg redemption sum/balance outstanding plus top up facility)
Remortgage of a property free from encumbrances/debt
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Typically, the maximum financing/facility amount is slightly less than the value of the property pledged and in
the case of financing new purchases, the difference between the loan amount and the purchase price (or the open market value, whichever is lower) is to be paid by the customer first before the loan amount is released
© 2013 Pearson Education, Inc. All rights reserved.
8-*
eg:-
Loan Amount: RM180,000 (90% of the property price)
Amount to be Paid by Customer: RM20,000 (10% of property price
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Additional facility is available for capitalization of related expenses eg Mortgage Reducing Term Assurance (MRTA) premium, legal and stamp duty pertaining to the loan documentation, etc, subject to credit assessment and terms and conditions.
The interest/profit rate charged may be fixed, floating or combination of fixed and floating, single or multiple interest/profit rates.
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Floating rate is typically based on the Base Lending Rate (BLR) plus/minus an interest spread eg BLR+1.75% and the effective rate will vary in accordance to the periodical changes in the BLR.
The installment amount is to commence upon full loan disbursement. Pending full loan disbursement (in the case of financing purchase of properties under construction from developers where the loan amount is released progressively against the progressive claim issued by developers), customers are to at least
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Interest BLR-1.00% (6.6%1.0%=5.6%).
Monthly progressive Interest to be paid RM100,000 X 5.6% X 31 /365 days = RM475.62
Assumption: a) BLR = 6.6%
8-*
Product Definition : This is an Islamic
Property financing facility offered to either completed or under construction property.
This facility is secured against residential or commercial properties. Nonetheless, additional security such as fixed deposits, guarantors, etc. may be requested depending
on the credit assessment
8-*
(i) Commodity Murabahah(cost plus profit).
This is a buy and sell contract between the Bank and Customer of which a specific Shariah compliant commodity will be identified and used as the underlying asset for the sale and purchase transaction between the customer and the Bank for the purpose of availing the funds for the financing
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Musharakah Mutanaqisah(diminishing partnership).
This is an Islamic property financing based on a combination of Shariah contract of Musharakah (partnership) and Ijarah (leasing). It is a form of diminishing partnership contract whereby the customer and the Bank jointly acquire and own a property. Once the Bank leases the property to the customer, the instalment payments shall gradually transfer the Bank’s ownership to the customer
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Profit Rate:
- Variable floating :ate is typically based on the Base Financing Rate (BFR)plus/minus profit spread eg BFR+1.75% and the effective rate will vary in accordance to the periodical changes in the BFR
- Fixed Rate (sale based transaction): the
profit rate used for computation of Selling Price Rate is determined upfront i.e BFR+
4.00% or 10.00% whichever is higher upon the offer and acceptance of financing.
© 2013 Pearson Education, Inc. All rights reserved.
8-*
This Selling Price or known as ceiling rate provides the customers with maximum capping for the total amount of financing payment regardless of periodical changes in the BFR
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Figure 8.7 Worksheet for calculating the maximum size mortgage loan you qualify for
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Figure 8.7 Worksheet for calculating the maximum size mortgage loan you qualify for (cont.)
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Figure 8.7 Worksheet for calculating the maximum size mortgage loan you qualify for (cont.)
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Figure 8.7 Worksheet for calculating the maximum size mortgage loan you qualify for (cont.)
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Element of 5’C –
(ii) Capacity – How strong the financial/ Wealth
(iii) Collateral – For unsecured financing
(iv) Capital – Saving/Investment/Other asset
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Summary
Separate needs from wants, compare products, negotiate, maintain product, and resolve complaints.
Lease or buy a vehicle that fits both your personal and financial needs.
Choose housing that meets your needs, preshop, comparison shop home and financing, and maintain if your purchase.
Get the most out of your mortgage.
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Content
8-*
3 types of categories – New, Used & Leasing
Consider on this elements:- your commitment, budget, price of the car, insurance @ Takaful coverage, Maintainance cost, Parts and others.
Purpose of your buying :- own use/Family/ business/ and others.
© 2013 Pearson Education, Inc. All rights reserved.
8-*
New
Used
Leasing
Price
High/expensive
-
Natural
High due to the price expensive
Cheap as compare to the new one event the Ijarah rate are high
Depand on the lessor. Normaly lower than the installment
Ownership
Yes
Yes
No
Warranty
Yes
No
8-*
Zero deposit or some case 10 % from original price
Depand
8-*
8-*
(a) In direct Financing
In direct financing, you get the fund directly from the conventional bank, islamic bank, credit union or finance company.
You agree to pay, over a period of time, the amount financed, plus a finance charge @ Ijarah profit,
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Product types : Hire Purchase
Product definition : The facility is given to you to part finance the purchase of a motor vehicle. Upon approval of the facility, a Hire Purchase Agreement shall be entered between you as the Hirer and bank as the Owner of the motor vehicle. The interest for the HP facility is calculated based on fixed or variable rate over the tenure of the facility. Upon payment of the amount outstanding under the facility, the ownership of the vehicle will be transferred to you. The tenure of the facility shall be up to a maximum period of 9 years only.
© 2013 Pearson Education, Inc. All rights reserved.
8-*
8-*
Car dealer seek bank for credit facilities
Contact customer for the details and supporting documents e.g pay slips and others.
Credit approved, customer pay 10% deposit and bank pay the remaining balance
Sign the Hire Purchase agreement and customer pay the installment to the bank. At the end, customer buy the car from the bank
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Named of the product :AITAB / HP-I
Product definition : Hire Purchase-i financing is a Shariah-compliant financing product caters for the needs of customers seeking an alternative to the conventional Hire Purchase product. It is provided for financing of asset calculated on fixed rate and variable rate. The ownership of the asset remains with the Bank until settlement of the financing. The operation of the financing is governed by the Hire Purchase Act 1967
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Automobile Decision
Shariah concept: Hire Purchase-i financing embraces the Shariah concept of Ijarah (Lease) and subsequent Bai' (Sale) also known as Ijarah Thumma Al-Bai (AITAB). Based on the Wa'ad (promise) made by the customer to buy the asset, the asset will be sold to customer at an agreed priceupon expiry of the lease tenure.
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Repayment period
New passenger car, 4WD, MPV and SUV (CBU and CKD units)
Maximum of 90% of dealer's/seller's invoice
up to 9 Years or 108 months
Secondhand passenger car, 4WD, MPV and SUV
Maximum of 85% of dealer's/seller's invoice
Unregistered reconditioned (imported) vehicle
© 2013 Pearson Education, Inc. All rights reserved.
8-*
For Used card
Type of vehicle
8-*
(ii) Pay slips
(iii) Bank Account
(ii) Bank Account
(iii) Audited Account
8-*
(b) Direct Financing
In dealership financing — another common type of vehicle financing — you get financing through the dealership. You and a dealer enter into a contract where you buy a vehicle and agree to pay, over a period of time, the amount financed plus a finance charge.
Example Toyota Capital Malaysia
Another option for customer for obtaining the financing
Additional variety plan and package: example Toyota 2 tier plan, Toyota drive and others.
New in Malaysia
8-*
Types of house : Landed property (Single/Double storey/Semi-D/Terrace/Bungalow/ Apartment/Flat)
Consider on this elements:- your commitment, budget, price, insurance @ Takaful coverage, Maintenance cost, Location, facilities and Others.
Purpose of your buying :- Own use, Investment (Rent or Sale)
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Home selection: How do you select a home?
Looking for a home: is a dilemma on needs and wants.
Obtaining a House
Guard with M16
8-*
2. Location :- Consider on this important place
(i) School
(ii) Public transport – Bus Station, Taxi Station, Train and etc.
(iii) Police station
8-*
© 2013 Pearson Education, Inc. All rights reserved.
8-*
8-*
8-*
Name of the product : Mortgage home loan
Product definition :The product is a mortgage loan/credit facility secured against residential or commercial properties. Nonetheless, additional security such as fixed deposits, guarantors etc may be requested depending on the credit assessment
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Financing purchase of residential or commercial properties
Refinancing of an existing mortgage loan from another financial institution (eg redemption sum/balance outstanding plus top up facility)
Remortgage of a property free from encumbrances/debt
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Typically, the maximum financing/facility amount is slightly less than the value of the property pledged and in
the case of financing new purchases, the difference between the loan amount and the purchase price (or the open market value, whichever is lower) is to be paid by the customer first before the loan amount is released
© 2013 Pearson Education, Inc. All rights reserved.
8-*
eg:-
Loan Amount: RM180,000 (90% of the property price)
Amount to be Paid by Customer: RM20,000 (10% of property price
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Additional facility is available for capitalization of related expenses eg Mortgage Reducing Term Assurance (MRTA) premium, legal and stamp duty pertaining to the loan documentation, etc, subject to credit assessment and terms and conditions.
The interest/profit rate charged may be fixed, floating or combination of fixed and floating, single or multiple interest/profit rates.
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Floating rate is typically based on the Base Lending Rate (BLR) plus/minus an interest spread eg BLR+1.75% and the effective rate will vary in accordance to the periodical changes in the BLR.
The installment amount is to commence upon full loan disbursement. Pending full loan disbursement (in the case of financing purchase of properties under construction from developers where the loan amount is released progressively against the progressive claim issued by developers), customers are to at least
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Interest BLR-1.00% (6.6%1.0%=5.6%).
Monthly progressive Interest to be paid RM100,000 X 5.6% X 31 /365 days = RM475.62
Assumption: a) BLR = 6.6%
8-*
Product Definition : This is an Islamic
Property financing facility offered to either completed or under construction property.
This facility is secured against residential or commercial properties. Nonetheless, additional security such as fixed deposits, guarantors, etc. may be requested depending
on the credit assessment
8-*
(i) Commodity Murabahah(cost plus profit).
This is a buy and sell contract between the Bank and Customer of which a specific Shariah compliant commodity will be identified and used as the underlying asset for the sale and purchase transaction between the customer and the Bank for the purpose of availing the funds for the financing
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Musharakah Mutanaqisah(diminishing partnership).
This is an Islamic property financing based on a combination of Shariah contract of Musharakah (partnership) and Ijarah (leasing). It is a form of diminishing partnership contract whereby the customer and the Bank jointly acquire and own a property. Once the Bank leases the property to the customer, the instalment payments shall gradually transfer the Bank’s ownership to the customer
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Profit Rate:
- Variable floating :ate is typically based on the Base Financing Rate (BFR)plus/minus profit spread eg BFR+1.75% and the effective rate will vary in accordance to the periodical changes in the BFR
- Fixed Rate (sale based transaction): the
profit rate used for computation of Selling Price Rate is determined upfront i.e BFR+
4.00% or 10.00% whichever is higher upon the offer and acceptance of financing.
© 2013 Pearson Education, Inc. All rights reserved.
8-*
This Selling Price or known as ceiling rate provides the customers with maximum capping for the total amount of financing payment regardless of periodical changes in the BFR
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Figure 8.7 Worksheet for calculating the maximum size mortgage loan you qualify for
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Figure 8.7 Worksheet for calculating the maximum size mortgage loan you qualify for (cont.)
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Figure 8.7 Worksheet for calculating the maximum size mortgage loan you qualify for (cont.)
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Figure 8.7 Worksheet for calculating the maximum size mortgage loan you qualify for (cont.)
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Element of 5’C –
(ii) Capacity – How strong the financial/ Wealth
(iii) Collateral – For unsecured financing
(iv) Capital – Saving/Investment/Other asset
© 2013 Pearson Education, Inc. All rights reserved.
8-*
Summary
Separate needs from wants, compare products, negotiate, maintain product, and resolve complaints.
Lease or buy a vehicle that fits both your personal and financial needs.
Choose housing that meets your needs, preshop, comparison shop home and financing, and maintain if your purchase.
Get the most out of your mortgage.