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Calculate the initial cost

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Q1. Encik Zamrul plans to buy an under construction property. The property is expected to complete in 2 years' time, upon completion, he will start paying the instalment amount. However, for under construction property, he will only be able to move in on 1st July 2021. While he is waiting for the property to complete, he is renting an apartment for RM950 per month (starting 1st June 2019). He is single and working as an engineer earning a monthly salary of RM7,200. He plans to take a 30 years loan. The bank is offering an interest rate of 4.5% per annum.

While under the construction period, Encik Zamrul will be required to pay the grace period profit to the bank. Below is the schedule of progressive release based on the stages done by the developer.

Property under construction (Expected completion date 1 June 2021)

Property price = RM 395,000

Commencement date: 1 June 2019

1st disbursement -15 June 2019 RM15,000

2nd disbursement - 5 October 2019 RM83,000

3rd disbursement - 22 December 2019 RM106,000

4th disbursement - 5 April 2020 RM150,000

Final disbursement -10 May 2021 RM41,000

Calculate the initial cost that Encik Zamrul need to incur prior to the first loan instalment for the property under construction.

Q2. En Nasir is a 28 years old executive in a private company earning an annual income of RM78,000. He plans to purchase a house. He has already saved RM50,000 and have no other obligations. He plans to buy a house that cost him RM400,000. The bank is offering an interest of 5% for the entire loan tenure. When applying for the loan, he has the option of buying MRTA for RM1,675.

a. How much would En. Nasir need to pay monthly?

b. Is En. Nasir eligible to purchase the property?

Reference no: EM132856932

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