Latest news with #LeonardTan
The Star
4 days ago
- Business
- The Star
Avoid losing your home
PETALING JAYA: Going by market reports, Malaysia's property transactions last year hit its highest levels over the past decade. According to the National Property Information Centre's Property Market Report 2024, the number of property transactions rose by 5.4% to 420,545 last year. That leads to the question: Are Malaysian home buyers getting financial protection for their mortgage? It is not mandatory for house buyers to purchase mortgage insurance, but getting one could protect them and their families from ending up homeless, said insurance professionals. 'This is to avoid adverse unforeseen circumstances that can land homeowners and their families in financial hardship,' said senior insurance consultant Leonard Tan. He explained that when a housing loan is left unpaid, the financial institution will initiate recovery actions, including foreclosure and auctioning off the property to recoup the outstanding loan. ALSO READ: Widow in a rut over unpaid housing loans Tan gave examples of mortgage insurance such as Mortgage Level Term Assurance (MLTA) or Mortgage Reducing Term Assurance (MRTA). 'These policies will provide the necessary funds and ensure that homeowners or their families have a roof over their head in the event of incapacitation or death of the borrower,' he said when contacted. Tan acknowledged that these policies have its pros and cons, so Malaysians taking up housing loans should evaluate which is suited for them. He said the MRTA is a life insurance policy that covers the outstanding balance of a mortgage and in tandem with the declining loan amount. 'It is straightforward and covers only the outstanding sum needed to settle the mortgage. 'The premium is a lump sum often paid upfront or included in the principal loan amount taken for a house and paid directly to the financial institution that provided the loan facility. (Click To Enlarge) 'There are no other additional benefits and if one settles the loan earlier, they may only receive a minute sum of the premium in refunds,' he said. As for MLTA, Tan said it is quite similar to a regular life insurance policy with the coverage sum remaining fixed throughout the loan tenure. 'If the coverage is RM300,000, the payout will be the same sum in the event of death or incapacitation even if the outstanding loan amount is RM50,000. 'The MLTA enables the beneficiary to have additional funds in hand when the outstanding loan amount is lower than the coverage,' he said. Although the policy is under the name of the homeowner, he said this sum is transferable and may be used to cover other loans they may take after the main mortgage is paid up. Since the MLTA has a bigger cash or surrender value compared to the MRTA, he said it would be far more expensive. Wealth manager Evan Teo said it is not compulsory for house buyers to purchase mortgage insurance, but some banks may decide to make it mandatory by bundling it with their mortgage loans. 'Some mortgage bankers also cross-sell it alongside the loan by offering a lower interest rate if the buyer takes up the MRTA or MLTA. 'I believe this is because bank assurance products such as MRTA and MLTA are now part of the mortgage banks or bankers' KPI,' he said, referring to the key performance index. But putting aside the bank's or banker's KPI, Teo said purchasing a mortgage insurance ultimately benefits house buyers. 'The majority of house buyers tend to be reluctant to purchase additional insurance unless it's required. 'Even though many insurance advisers are doing their best to educate the public, uptake is still relatively low unless it is packaged (into the loan),' he said. As such, Teo was of the view that the practice by some banks to bundle MRTA or MLTA with mortgage loans is a good move. He said in the past, the family members of loan takers would have to 'inherit' the housing loans when the borrower was not able to continue paying the monthly payment as they did not have insurance protection. However, Teo also advised house buyers to pay attention to the terms and conditions included in their housing loan with banks before purchasing an mortgage insurance. 'For example, the coverage period may be shorter than the actual loan tenure or the policy might only cover death or total permanent disability. 'What happens if the buyer is diagnosed with a critical illness after the insurance term ends and this affects their ability to earn an income and continue loan repayments?' 'So, it's better to analyse your own needs in relation to the mortgage before deciding based on your financial capability,' he said.
The Star
4 days ago
- Automotive
- The Star
Widow in a rut over unpaid housing loans
PETALING JAYA: It was a proud moment for factory worker R. Devika when her husband signed the documents for their first home, costing RM250,000, in 2012. The lorry driver diligently serviced the housing loan but tragedy struck five years later. A motorcycle accident took his life, leaving his wife to care for their three children with a monthly income of less than RM2,000 from the factory. Distraught and reeling over the loss of her husband, she did not pay much attention to several bank reminders of the unpaid housing loan repayments until a foreclosure notice was delivered six months later. Accompanied by a relative, she visited the bank and was dealt with a second blow when she learned that her husband had not insured the mortgage and the house would be auctioned. Without any savings, Devika, who is in her 40s, was devastated as she faced the loss of her family home in Rawang. Fortunately, her brother-in-law stepped in. He offered to service the loan on condition that he would take ownership of the property once Devika's children reached adulthood. Left with no other choice, she agreed. Devika's situation was related to The Star by a relative of hers, who declined to be named. Unfortunately, she is just among the thousands of Malaysians, especially those from low-income families, who have overlooked the importance of getting a mortgage reducing term assurance or mortgage level term assurance, said insurance consultant Leonard Tan. 'They see it as an additional financial burden rather than an essential protection. 'But such an insurance is a small price to pay for an asset we have worked so hard to own,' he said.
Business Times
04-05-2025
- Business
- Business Times
First UOB Learning Playzone teaches financial literacy to kids
[SINGAPORE] UOB has turned part of multidisciplinary children's art centre The Artground into a treasure trove of engaging activities centred on financial literacy, including a bumboat 'marketplace' where kids can pretend to be buyers and sellers. Dubbed the UOB Learning Playzone, the island-themed interactive space in Goodman Arts Centre aims to teach children financial skills such as budgeting through role-play and art. More than 50 kids aged four to six from social service agency Child at Street 11 and education group Global EduHub – as well as their teachers – got to experience the play zone at its launch on Apr 30. Noting that financial literacy is part of UOB's core competency, Leonard Tan, the bank's head of group corporate social responsibility, said: 'We want to be in a position to help communities – especially emerging ones or those from disadvantaged backgrounds – learn early about the value of money management practices.' At the play zone's bumboat marketplace, for instance, children are invited to role-play as store owners and shoppers. They can learn about the basics of trade by buying and selling staple foods such as fish, fruits and vegetables. Upon entry, each child is given a kit with a money stamp card and items based on the Singapore dollar. The card helps the kids track their earnings and expenses in UOB's Learning Playzone. A NEWSLETTER FOR YOU Friday, 2 pm Lifestyle Our picks of the latest dining, travel and leisure options to treat yourself. Sign Up Sign Up There are also interactive displays on the evolution of money, along with tips on budgeting wisely – such as by saving money in the bank and setting aside funds for daily needs, leisure activities, education or charity donations. 'This kind of experience (gives) the children a more hands-on approach in learning how to budget and manage simple calculations,' said Natalie Seet, an English teacher at Child at Street 11. A separate play area showcases how the S$50 note incorporates two artworks by local artists. Here, kids can design their own island-themed currency using recycled materials. Nearly 20 UOB volunteers were at the play zone's launch to interact with the children. Denise Wong, one such volunteer and a group retail senior officer at the bank, called it a 'meaningful' experience. '(This initiative) allows me to contribute to the children's development and well-being in a fun and engaging way. At the same time, I get to give back to the community while exploring my creativity and self-expression together with them,' she said. Denise Wong (second row, centre) was among the UOB volunteers interacting with kids from Child at Street 11 at the bank's Learning Playzone. PHOTO: UOB In addition, the UOB Learning Playzone touches on all of the bank's focus areas for its giving-back efforts, said Tan. He added: 'The Artground is very strong in delivering art experiences. Because UOB is focused on art, children and education, we are trying to connect the dots and make sure that we... deliver the programmes in an artistic environment, but with the content of financial literacy.' He also noted that such initiatives foster creative thinking and problem-solving skills in children. The play zone is open until Oct 20 at The Artground. A valuable start The UOB Learning Playzone builds on the bank's other community-focused financial literacy efforts, such as its support for Fresh, a programme run by charity Children's Wishing Well. Twice a month, UOB volunteers bring groups of up to 15 kids – aged between seven and 12 – from lower-income families to a supermarket and teach them about budgeting and nutrition. Each child is paired with a volunteer and given S$50 for the shopping experience.
