"I've been paying my home loan for over 10 years, and suddenly, when I check the remaining balance, my debt is increasing instead of decreasing! It's really giving me a headache!" Have you ever heard of such a case?
But before that, I'm sure many wouldn't have thought that something like this could happen, right? This kind of situation can actually happen to anyone who has had home loan arrears for more than a few months. In other words, situations like this are not uncommon when legal actions have been taken against the house. The interest rate will also increase due to late payment charges. What happens is as if you haven't paid anything at all for the past 10 years. It can be quite confusing, right?
So, if you have ever had arrears or faced legal actions by the bank, I recommend checking your home loan balance promptly, as the same thing might happen as in the case of one of our customers.
This case happened to Mrs. Alia, 45, where the total debt for her housing loan has now skyrocketed higher than the original amount she applied for when she first bought the house, even though she has owned the house for over 10 years.
The original value of Mrs. Alia's home loan was RM83,500, and after 10 years, the remaining balance has increased to RM86,753, even though she has been repaying the loan for 10 years. Mrs. Alia's interest rate is also as high as 7%, so it's not surprising that if she missed a few payments over the months, the loan amount could reach that level.
Imagine, we often tighten our belts, especially when it's the end of the month, while waiting for the new salary to come in, hoping that the debt amount will decrease. But as it turns out, just because of a small oversight, Mrs. Alia had to face such a problem.
Mrs. Alia is truly worried and stressed about her increasing debt, especially with her advancing age. Coupled with health problems, she has been facing financial difficulties lately. According to Mrs. Alia, she felt like her life momentarily turned dark when she found out about her growing debt.
Previously, Mrs. Alia worked for a private company. However, due to her deteriorating health condition, she had to quit her job as she could no longer commit fully to her work. Mrs. Alia had to make two hospital visits a month to see the doctor. Currently, she operates a small online business to sustain her life. Her income is not stable as it depends on her monthly sales. Luckily, Mrs. Alia has already paid off her car loan two years ago.
A friend suggested that Mrs. Alia should consider refinancing her home loan. However, her application did not get approval, even after visiting three different banks in Malaysia. The unfavorable credit report and debt service ratio from the bank made it difficult for her to secure approval.
Initially, Mrs. Alia couldn't believe that her CCRIS and CTOS records were not favorable. She thought she had been diligently paying all her monthly installments on time for several years. Mrs. Alia shared that she faced a financial crisis a few years ago, during which she couldn't afford to repay her home loan, leading to legal actions against her. However, after her situation improved, she no longer avoided paying her monthly commitments.
Upon reevaluation, it turned out that Mrs. Alia had an unresolved issue with an old credit card debt, which she had overlooked. This was the main reason why her application for home loan refinancing failed. Curious about how Mrs. Alia managed to refinance her home despite three bank rejections? Continue reading in part 2.
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