Bank Housing Loan

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Withdraw EPF(KWSP) To Buy Your Dream House

What is EPF in Malaysia ? EPF is actually stand for Employee Provident Fund or KWSP (Kumpulan Wang Simpanan Pekerja) in Malay.

Effective from 1 January 2007, all EPF contributors will have two accounts that is different according to their contributed amount as well as withdrawal flexibilities. The Account I will consist of 70% of your EPF contribution while the Account II will consist of 30%. You are not able to withdraw any money from Account I as it is completely restricted for withdrawals with exceptional if the contributor reach an age of 55 years old, is incapacitated, migrate to other country or passed away. And for Account II, it is permitted for loan settlements or down payments for the purchase of your first home, investment, withdrawal for the purpose of medical expenses and education, and also for members who reaches 50 years old.

EPF Withdrawal For Purchasing of Shop House or Build House

Requirement
You have to be an EPF member.

Entitlement
Effective from 1 January 2007, EPF board launched a whole new system by which the contributions positioned with the credit of and also received for all EPF members will be splitted into following two accounts:

Contributions Purpose of account
Account I 70% for retirement
Account II 30% for housing and pre-retirement

Your entitlement is either going to be 30% of balance available in the purchaser’s EPF account II or the variance relating to the buying price and amount of the loan (applicable to whichever is lower).

To withdraw money for the purpose of purchasing a house, the EPF member is permitted to withdraw the 30% of the total EPF contribution which is saved in Account II. The money also can be withdrawn if the member is 50 years old adn would wish to make for retirement plans.

Withdrawal to Purchase a House

This is allows for you to withdraw money from your Account II in order for you to partially paying the purchase of a house either via:

* Individual purchase; or
* Joint purchase with spouse, family members or other individuals.

Who are eligible to apply for EPF withdrawal?

A member is eligible to apply if he/she is:

* A Malaysian citizen; or
* A Permanent Resident; or
* A Malaysian citizen who have withdrawn your savings under Leaving The Country Withdrawal before 1 August 1995 but subsequently returned and re-contribute to EPF; or
* A Non-Malaysian citizen (Expatriate) who became a member of the EPF before 1 August 1998.

You must having money in your Account II and you need to as well not 55 years old at the time you apply for the EPF withdrawal.

How much can you withdraw from your EPF account?

The amount that you can withdraw is depends on the following, whichever is lower:

* Individual Purchase
The difference between the price of the house and the housing loan with an additional 10% of the price of the house
OR
All balance available in Account II

* Joint Withdrawal with Spouse, Family Members or Other Individuals
The difference between the price of the house and the housing loan with an additional 10% of the price of the house
OR
All balance available in Account II of all applicants subject to the maximum eligible amount as stated above.

If you received a 100% housing loan, then you’re entitle to withdraw as much as 10% of the price of the house OR all balance available in Account II, whichever is lower.

In case you are buying a property with cash, you will be eligible to withdraw as much as the housing price with an additional 10% of the price of the house OR all balance available in Account II, whichever is lower.

You could opt to figure out the amount you wish to withdraw from your Account II, subject to the maximum amount allowed for withdrawal by completing “Surat Akujanji Pilihan Amaun Pengeluaran”.

Frequency of Withdrawal

The EPF withdrawal from your account II for house purchase is only permitted for your first house. But if you’ve made your withdrawal from your account II previously to purchase your first house and have sold it after few years, you are eligible to withdraw again to purchase your second house by providing proof of sale of the first house to EPF authority.

After the withdrawal, you’re entitle to withdraw your savings from your EPF account II to reduce the housing loan for the same house once a year.

Withdrawals that are of relevant to housing are provide to EPF members who are Malaysian citizens or those with Permanent residence status. Besides, expatriate members who have became a member of the EPF before 1 August 1998 are eligible for such withdrawals as well.

For Malaysian citizens who have withdrawn their contributions under the Leaving the Country Withdrawal scheme before 1 August 1995, but subsequently chosen to re-contribute to EPF are eligible for withdrawal also.

Furthermore, you need to have the rest of the balance in Account II to be eligible to apply. The other pre-condition is basically that your age not yet reach 55 years when you are apply for such withdrawal.

For EPF withdrawals with the purpose of reducing housing loans, you need to have a minimum balance of RM500 in your Account II.

For withdrawals that applied for purchasing or building a house, you are required to meet all other conditions that are regulated by EPF authority. Other conditions are included the type of houses that you want to buy or build, and the financing source you can get for buying and building the house.

The purpose of housing

For housing purposes, the purpose of the withdrawal is to help the member to:

A. reduce or settle the housing loan balance
B. buy or build a house/shop with residential unit

Procedure For EPF Withdrawal

1. Submission of EPF withdrawal form together with the original copy of the Sale and Purchase Agreement.
2. A photocopy of your Identity Card.
3. A copy of the letter of loan approval from your end-financier.

Note: The original Sale and Purchase Agreement, Letter of Loan approval from your end-financier and your original Identity Card need to be sighted by the EPF officers.

Mode of EPF Payment

You can expect to receive the payment within a period of three to four weeks from date of submission.

How is the payment made?

The payment is going to credited directly to the bank account with the following conditions:
- Members own a bank account with the EPF elected panel banks.
- Members’ bank accounts are still active, and
- Members’ bank accounts types are individual savings/current accounts OR Individual Joint Account for withdrawal amount of more than RM100,000.00.

How do I submit the applications?

Applications can be submitted at any EPF Offices nearby, either at the counters or by post.