A booking form might seem like an insignificant step on your path to homeownership, but one wrong move could cost you a steady property transaction! A late home loan approval could lead to a booking form being void, and when that happens, you can’t complete your purchase transaction. This means no dream home!
To avoid a void booking form, here are 4 key things you should be aware of!
Standard Term & Extended Term
In a booking form, there is a deadline stated for how long a buyer is given to secure a house loan to finance the property. There are 2 types, the standard term and the extended term.
The standard term is 14 days. However, many are unlikely to do so within this time frame due to factors causing a delay in a bank’s approval. Failing to comply, led to your booking form being void as you are unable to finance the house purchase.
Therefore, it is best to go for an extended term where the period is prolonged to 21 days or sometimes even 30. The extension had to be requested to the seller or housing developer, which the approval is entirely up to them.
Single & Joint Name
The potential home buyer of the property could put their name alone or with another nominee in the booking form. A joint name is usually used in the case of a home loan rejection on the potential homebuyer, leading to a void booking form. The purchase transaction could still be completed by securing a home loan by the joint purchaser. They can then either be joint owners or the homeowner of the property.
Some properties would require approval for a joint name from the developer, while secondary property purchases are entirely up to the homebuyer.
Margin of Financing
A home loan for a first time homebuyer is a maximum of 90% margin of financing while the rest is a maximum of 70%. However, that could change depending on the factors of the buyer such as their salary, age, or debt service ratio.
In your booking form, you should be wary if there is a specific condition that states the validity of the form depends entirely on the approval of your maximum margin of financing. For if you could not secure it, the booking form might become void.
Therefore, it is best to amend the condition to subject to loan approval. This way, you could still refund your booking fee even if you are unable to secure the maximum amount of financing.
When you purchase a property, there is a booking fee collected by the developer, ranging from RM500 per unit to 5% of the purchase price. This is usually collected when you have decided on a home and signed the booking form. In many booking forms, the booking fee is recoverable.
Therefore, homebuyers should check the Terms and Conditions of the booking form. Any collection of payment done before signing the Sales and Purchase Agreement (SPA) is prohibited. Thus, if the developer refuses to refund your money, you could complain about them.
To get the dream home you have always wanted, it is imperative to know what is listed in the booking form. Even though it might be 2 to 3 pages long, and a tedious task to read through carefully, it is a significant step to your homeownership journey.