Friday, May 31, 2013

Nothing in life is certain but death and taxes ~ Benjamin Franklin

‘Nothing in life is certain but death and taxes’

So goes the quote made famous by American writer and politician Benjamin Franklin. Both are equally
unpleasant subjects that people tend to avoid. It’s not the kind of thing you want to discuss but the
unfortunate reality is that funeral costs are skyrocketing and you may want to consider what this means
for your loved ones.

How much does it really cost?
Depending on your religious beliefs, a typical funeral could cost anywhere between RM2000 to
RM25,000. This is inclusive of prayer services, preparation of the deceased’s remains, cemetery plot,
venue and hearse. A moderate space on a newspaper’s obituary will also set you back an additional
RM300-600 for a modest sized obituary.

There are some funeral homes which offer pre-planned funeral packages so you can roughly gauge the
costs. One of the benefits of getting a pre-planned package is you’ll save a lot of money on inflation as
things will definitely cost more in 30-40 years. You also have the option of paying on instalment.
Taking care of your assets

It’s equally important to make arrangements for your remaining assets. Drawing up a will should be
done every time your material position changes to ensure your property goes to the intended recipients
and not back to the state or bank. Will writing services vary depending on how vast your assets. A simple
will can be drawn up for as little as RM380 but when it involves various estates you’ll need to appoint
legal trustees to manage the execution of your will. The standard rate for an appointed trustee is usually
1% to 2% of the estate value. If a person owns estates that are worth RM1 million, the administration
process could tally up to RM12,000, which includes a token nominal fee.

It is also possible to write your own will. However, it would be advisable to run it by a lawyer to ensure it
fulfils the requirements of the Wills Act 1959.

Taking care of your digital information
Although still unheard of in Malaysia other countries are starting to offer services that take care of all
your social media accounts and private digital information after your death. Most of these digital will
services such as Entrustet are free but do not apply in our country just yet. Until it is, you can indicate a
trustee to handle these through your will.

Devising a plan
An average funeral will cost approximately RM8,000. Considering inflation rates, this number could
increase significantly in the coming years. Here’s a short checklist on steps you can take to plan ahead:

  • Ensure you have a good life insurance policy which can provide for funeral expenses.
  • Start a small savings account for this purpose.
  • Write a will as soon as you can and keep it updated.
  • Pre-plan costs and other details with loved ones. It’s not the nicest subject but you will be glad you undertook to speak about it. You can even buy ‘pre-plan’ funeral packages from select funeral homes on instalment.

(Source: http://my.news.yahoo.com/planning-end-afford-die-003301573.html)


EPF Withdrawal to purchase / build a house

Withdrawal to purchase / build a house

This scheme allows individuals (or joint purchasers) to withdraw money from their EPF Account 2 to purchase a house (type: bungalow / terrace / semi-detached / apartment / condominium / studio apartment / service apartment / townhouse / SOHO) or a shop lot with residential unit, from a developer, individual, or in a public auction.
To apply, the Sale and Purchase Agreement (SPA) as well as the Housing Loan Approval Letter (unless the house was paid for in cash) or Loan Facility Agreement must be submitted at the time of the application. You can walk in to any KWSP office to submit the KWSP 9C (AHL) (D5) Withdrawal Form , along with the supporting documents or submit via postal services.
In most cases, it would mean that you will have to pay for the following upfront costs first and complete the following before applying for a withdrawal:
  1. Booking fee + Down payment for the house.
  2. Lawyer fees and stamp duty for the Sale and Purchase Agreement.
  3. Obtain the at least the letter of approval for the housing loan.

Withdrawal limits

  1. Money from EPF Account 2 can be used to pay the price difference between the SPA house price and the housing loan amount, up to an additional 10% on the price of the house. So if a full housing loan (100%) is obtained, the maximum that can be withdrawn is up to 10% of the price of the house.
  2. If the house was purchased using cash, up to 110% of the price of the house can be withdrawn.
  3. Any withdrawal amount is always subject to whatever money is available in the applicant’s (and where applicable, joint applicant’s) Account 2.

Eligibility for withdrawal

  1. Withdrawal to purchase the first house.
  2. Withdrawal to purchase a second house, provided the first house is sold, or disposal of the property has taken place.
The full list of T&Cs plus the necessary supporting documents can be found at this section for purchase or this section for bulding a house at KWSP’s website.

TIPS to improve my CCRIS record to improve my chances of successfully applying for a loan?



  • If you have high credit utilization, pay down some your credit lines before submitting a loan application.

  • Your CCRIS information is updated on the 15th of every month e.g. information for Jan 2013 will only be updated on 15 Feb 2013. So if you have paid down your credit lines anytime from 1-31 Jan, time your loan application submissions on the 16th of Feb.

  • A consistent string of 1’s in your repayment behaviour could indicate payment due dates that are earlier than your pay day. Try to get your bank to delay the billing cycle.

  • If you have known late payment records, wait 12 months from your last known late payment record before submitting a loan application

  • Limit your amount of loan and credit applications. If shopping around, shop around first, then selectively apply for the best products. Contrary to popular practice, too many loan/credit applications actually hurt your chances of getting the best deals.
  • Home Loan Application Rejected? Know CTOS and CCRIS (Part 2 of 2)


    What is CCRIS?

    CCRIS stands for Central Credit Reference Information System. It is a system created by Bank Negara Malaysia (BNM) which synthesizes credit information about a borrower or potential borrowers into standardized credit reports. The information is available to financial institutions (Banks) and the individuals (or company directors) themselves upon request.
    Individual banks’ systems are typically already tightly integrated to the CCRIS system and automatically extract an individual’s/entity’s credit report during the credit approval process.
    Every participating financial institution (Includes all licensed commercial banks, Islamic banks, investment banks, development banks, some of insurance companies, payment instrument issuers and rehabilitation institutions) is required to submit their customer's credit conduct to this centralised system.

    What CCRIS is Not?

    A black list.

    What categories of information does a CCRIS Report contain?

    There are 3 major categories of information:

    1. Outstanding loans

    • Housing loans, hire purchase, credit cards, personal loans, overdraft etc.
    • Includes information on Outstanding Amount, Limits, Payment Behavior, and Legal Status if any.

    2. Special Attention Accounts

    • Usually accounts deemed Non-Performing Loan (NPL), or under special debt management schedules such as those negotiated by AKPK

    3. Loan or credit facility applications made in the past 1 year

    • How many were approved / rejected

    How does a CCRIS report look like?

    Example of CCRIS report
    (Click on image to view full size)
    A, B and C are the categories of information explained above D is the total outstanding amount E is the total limit, or the original loan amount F is the repayment behaviour. The number indicates the number of missed payments. (In the example CCRIS report, the '1' means there was 1 missed payment in the month of July 2012)

    How long are the records kept?

    CCRIS shows repayment records of the last 12 months only, after which the oldest data is expunged.

    What do banks typically look out for that give a bad impression?

    1. Accounts under legal status (legal action being taken) or special attention accounts.
    2. Missed or late repayments.
    3. Utilization of credit limits e.g. A high utilization of Credit Card or Overdraft limits is an indicator of poor finances.
    4. High Debt Servicing Ratio (DSR). This is done via comparing your income documents against the total outstanding credit.
    5. Multiple active loan or credit applications. The more you applications you made, the more “desperate” you seem to banks.

    Any tips to improve my CCRIS record to improve my chances of successfully applying for a loan?

    1. If you have high credit utilization, pay down some your credit lines before submitting a loan application.
    2. Your CCRIS information is updated on the 15th of every month e.g. information for Jan 2013 will only be updated on 15 Feb 2013. So if you have paid down your credit lines anytime from 1-31 Jan, time your loan application submissions on the 16th of Feb.
    3. A consistent string of 1’s in your repayment behaviour could indicate payment due dates that are earlier than your pay day. Try to get your bank to delay the billing cycle.
    4. If you have known late payment records, wait 12 months from your last known late payment record before submitting a loan application
    5. Limit your amount of loan and credit applications. If shopping around, shop around first, then selectively apply for the best products. Make use of Malaysia's most accurate loan comparison tool for this purpose. Contrary to popular practice, too many loan/credit applications actually hurt your chances of getting the best deals.

    Home Loan Application Rejected? Know CTOS and CCRIS... (Part 1)

    What is CTOS?

    CTOS is a lead information system widely used by the majority of the country’s Financial Institutions, Commercial Companies & Businesses, Legal Firms and other institutions. Unlike CCRIS, which is under Bank Negara Malaysia (BNM), CTOS is owned and managed by a Malaysian company, in business for over 20 years, collating information on Individuals and Companies from various sources found in the public domain.
    The information is formatted into an electronic database which provides for an easy, quick and efficient checking process for loan applications, trade and business credits and for decision making by credit grantors and lenders.
    The sources of CTOS information include amongst others:
    • Legal notices in Newspapers
    • Searches at the Companies Commission of Malaysia (CCM) or Suruhanjaya Syarikat Malaysia (SSM)
    • Government Gazettes & Publications
    • Searches at the Malaysia Department of Insolvency (MDI) or Jabatan Insolvensi Malaysia
    • National Registration Department (NRD) or Jabatan Pendaftaran Negara (JPN)
    • Searches at the Registrar of Societies (ROS)
    • Contact information provided by creditors / litigators / trade referees
    • Information voluntarily provided by subjects themselves
    Only CTOS subscribers can access the CTOS Information Database.

    What CTOS is Not?

    CTOS is not a blacklist. It does not provide opinions, ratings, rankings or recommendations on an Individual’s or Company’s credit worthiness. All lending policies, loan approvals and decision making are determined by the lenders or credit grantors themselves, not CTOS.
    Another misconception about CTOS is that it does not update its records. It is important to note, CTOS is like an electronic library of historical information captured from publicly available sources and archive as such. Updates are carried out by CTOS whenever it captures case settlements from parties involved namely the plaintiff, defendants, their lawyers or new information from related source documents.

    How long are the records kept?

    Unlike CCRIS where records are kept only for 12 months, CTOS records are kept indefinitely as an historical archive of one’s history and experiences.

    Will CTOS update the information in their database?

    Yes, the CTOS database is updated with new information collated from the various sources on a daily basis. Information contained in Section C is periodically updated to reflect the latest directorship and shareholdings of the subject at that point in time.
    Information in Section D – As a rule, in this section, information is never deleted except in cases of (1) Fraud OR (2) Mistake. The relevant supporting documents must be provided to CTOS for their checks and verification before a deletion can take place.

    I have settled a legal action against me / been discharged of Bankruptcy. But banks still reject my loan applications, citing “CTOS issue”. What can I do?

    Because of how CTOS operates, if you have had legal actions taken against you, it becomes your responsibility to provide updates to them, especially if the outcomes are in your favour. This can be done by contacting CTOS service centre.

    I have been a victim of identity theft, which has resulted in many unjustified lawsuits against me. The cases have not been resolved. What can I do?

    If you are able to provide proof of fraud (eg. police reports, letters of support from relevant banks/lawyers/litigators), CTOS will remove the relevant records from their system after verification.
    You may also provide subjective comments in defence of yourself to be added to your CTOS file. This ensures that all enquirers to your CTOS file will see your explanations. These will appear in Section E of your file.

    I was discharged as a bankrupt / paid off my creditors 6 months ago and have updated CTOS regarding my case? Why do banks still reject my loan applications, citing “CTOS issue”?

    Most likely, the issue is not with CTOS not updating your records, but with the bank’s internal credit approval policies.
    Most banks have internal policies that are not friendly to past delinquents. The more time that has passed between your last delinquency versus your loan application, the higher the chance of approval. A general rule is to have at least 1-2 years in between.

    I do not owe any banks any money. And to my knowledge, I have never been sued. How can it be that I have “CTOS issues”?

    Subscribers to CTOS are able to provide their contact details as “Trade Referees” for a subject. This appears in Section E of the CTOS report. As explained above, trade referees may want to share their business experiences known as “trade references”. It is likely the trade referee could have dealings with you and/or your company or business.
    Telco and utility companies have been known to put themselves as trade referees for subjects who have long-standing uncollectible debts with them, even for small amounts.
    In such instances, it’s advisable for you to contact the CTOS Service Centre to conduct a CTOS Self Check Report. From the report, you will know whether such is the case.

    Thursday, May 30, 2013

    銀行不批貸款,無殼族只能繼續望屋興嘆!!

    檳城房屋仲介及發展商近期頻頻投訴,隨著國家銀行(BNM) 縮緊房貸申請,商業銀行嚴格審核申請者償還條件,已使到月入4000令吉的打工一族面對購屋困難的處境。

    目前,在檳城40萬令吉以下的房屋更出現有價無市的情況,陷入近30年來最嚴重的滯銷情況。根據處理銀行房貸事務的行內人透露,州內申請房貸被拒的情況以中低收入群最嚴重,每10個廉價屋貸款申請者,至少有5個人因薪水過低遭拒,而發展商提供的資料也顯示,州政府呈交的中廉價屋獲分者名單中,平均每100人只有5個人“配對成功”,最終成功購得房屋。除了部分申請者因不滿意房屋地點,其中有近半數的申請者是因申請不到銀行貸款,而望屋興嘆。

    Tuesday, May 28, 2013

    Can you afford to die?

    Inflation rates are on the rise. 7% GST is being proposed. While many of us are working hard to survive these days, we do not pay attention to whether we can afford to die.

    When someone in the family passes away, other than having to decide who should bear the funeral costs, family members also have to manage the deceased’s estate and liabilities.

    An article published on Yahoo! News Malaysia enlightens us on what steps we could take to plan ahead in order to ensure that our family and financial goals are met after we die.

    Kindly click *HERE* to view the article.

    Source: Rockwills

    Thursday, May 23, 2013

    Retirement Advice from Real People

    Practice Retiring

    How do you really know how much you’ll need to save for retirement? The answer is that you do not but there’s a way to put some data behind your projections. Sydney Lagier, retired owner of the blog, Retirement a Full-Time Job, says that she and her husband tested their retirement budget the best way they knew how: They lived it before actually retiring.

    “My husband and I agreed to practice living on our planned budget before I retired. Of course, we could not. That practice run was a reality check that I'm glad I sorted out before I actually pulled the trigger on retirement.”

    If it doesn’t work, make changes. Those changes will give you an idea of your retirement lifestyle. Will one or both of you have to continue working part time? Can you cut expenses enough to be able to travel or lavish the grandchildren with gifts? Everything costs more than you think.


    Don’t Fall for the Sales Pitch

    Every investment advisor has the magic fund that will set you up for the retirement of your dreams but as so many learned in 2008, those dreams can become a nightmare almost overnight. Boyd Lemon, author of Retirement: A Memoir and Guide, advises retirees to be wary of the products financial advisors try to sell to them.

    Do not expect a higher return with low risk no matter what the investment adviser says. If the return is high relative to government bonds, it means that the risk of loss is correspondingly greater. You can count on that.”

    If you’re behind on your retirement savings, ratcheting up the risk in your portfolio isn’t likely to make a large-scale difference especially if you’re nearing retirement. Instead, contribute more. 

    Travel Insurance - Worth to buy?

    To Buy or Not to Buy?

    Decide after the following Case Study.

    Mrs. Tan loves to travel. At 60, she has all the time in the world to visit the places she could only dream about in her youth. Her daughter, Mary, enjoys accompanying her on her trips. As they became seasoned travellers, Mary realised that having an enjoyable trip includes planning for safe trip.

    "You can plan as much as you can but there are certain things you just cannot plan for" she said, "Getting help in an unfamiliar place is a challenge I can do without."

    Early this year, before leaving on their holiday to Canton, Shanghai and Beijing, Mary took her usual precautions. She told other family members where they were going, informed her credit card company, read all about the places that they were visiting and places to avoid and so on. She also purchase travel insurance for both of them.

    On the third day of their tour, Mrs. Tan slipped and fell and fractured her leg. She was immediately hospitalised. After three days, the Tan family decided that it would be better to transfer Mrs. Tan back to Malaysia.

    "Luckily we had travel insurance" said Mary. "It was enough to cover all the hospital bills in Shanghai, plus the cost of the medical evacuation." They paid only RM48 each in premiums and were covered for RM300,000 for medical expenses that included follow-up treatment in Malaysia. "I can't imagine how we could have paid for everything on our own." said Mary.

    Today, Mrs. Tan is well on the road to recovery and is already planning another trip. "We haven't decided on the destination yet" said Mary. "But it'll be short and relaxed, nothing too taxing, and I certainly will make sure that we have purchased travel insurance for the trip!".


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    Annual cover for seasoned traveller start at RM230 per year (for Area 1) to RM340 per year (worldwide).