Sunday, 18 August 2013

Language Developers' Interest Bearing Scheme

Most projects in Malaysia are offering Developers' Interest-Bearing Scheme (DIBS) for newly-launched property as a means to entice home buyers and investors. But what exactly is DIBS? How it works, and what are the things you need to take note of when purchasing a property which comes with a DIBS.

What is DIBS?

DIBS is a scheme where a property developer absorbs the home loan interest of the home buyers during the construction period of a property or in others word, until the project TOP.

If you buy a house that comes with a DIBS, the developer will pay any home loan interest that is borne by you during construction (which is usually 36 months starting from project launch). Thereafter, you will service the loan interest as you would a normal home loan.

How Does DIBS Benefit Home Buyers?

DIBS takes away the need to service home loan interest during a property’s construction period, which means you will pay less as compare to the amount that includes interest.
For property investors (especially those looking to “flip” or offload the properties upon completion), properties that come with DIBS are commonly perceived as excellent investment choices as the investors are not required to cough out additional capital for the first few years of investment.

Where to Find Properties with DIBS?

More and more new property projects come with DIBS. Project development like D'Inspire Residence come with DIBS.

A Word of Caution on DIBS

In recent times, there have been cases whereby property developers over advertised DIBS by stating in brochures that “home buyers make NO payment until due vacant possession of the properties” – a statement which is incorrect because the buyer are still required to pay the home loans to the developers less the interest.