Wednesday, November 2, 2011

Can I withdraw money from EPF account to pay the downpayment of my property purchase?

The response to this inquiry could be yes or no as it could be in either way. First, we have to understand that money from Account 2 could be withdrew to furnish the need of downpayment with certain documents to be prepared for EPF. Among them, there are 2 items to be highlighted:

1.4 Sale & Purchase Agreement (purchase from developer) OR Proclamation of Sale from Administrator / Court (public auction purchase) which contains the name of the member or names of all members (for joint purchase) and the date of execution does not exceed 3 years on the date the withdrawl application is received.

1.5 If a housing loan is involved, the following documents will have to be produced:

Housing Loan Approval Letter (if the loan approval is less than one (1) year from the date the withdrawal application is received); OR
Housing Loan Approval Letter and Housing Loan Agreement/ Mortgage Form 16A (if the housing loan approval has exceeded one year from the date the withdrawal application is received).

The need of S&P as a part of withdrawal application indicate 1 simple thing. You have to sign a S&P prior you could apply for a withdrawal, which eventually means that, you have to fork out some money for downpayment when you sign the S&P and later on, EPF will reimburse the amount to you. This is how the things are commonly done.

For further details, please refer to the links below:
http://www.kwsp.gov.my/portal/ms/web/kwsp/member/withdrawal-to-purchase-a-house

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