20190221 6 steps to buying your own home in 2019 0
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Finding a place called home has been challenging in recent years, especially for first-time home buyers. However, things are looking up, because in Budget 2019, the government has prioritised bridging the home ownership gap among Malaysian first-time home buyers.

Starting from 1 January 2019, stamp duty will be exempted 100% for property worth up to RM300,000, among numerous other initiatives. In addition, developers have launched numerous promotional packages for purchasers, and as covered previously on PropSocial, there are many ways to reach beyond your budget in purchasing property.

We hope this means a prosperous 2019 for every first-time home owner out there! This leads us to our next discussion. It always helps to have a road map wherever you’re going, so now that home purchases are finally within financial reach, what are some of the things you need to be aware of before you start your property journey?

1. Budgeting

Cut one's coat according to one's cloth, always go for something you can afford. Take into account the monthly installment, maintenance fees, insurance premiums, utilities bills, upfront costs for moving, and your personal expenses and debt.

Hence, before getting your first home, you may want to consider your savings and income. These will help you determine what you can afford.

Tracking your daily expenditures is a good financial habit. (Source: pinterest.com)

2. Build your credit

Your credit will determine your eligibility to take up a loan. The bank will go through your financial history via systems and agencies like CCRIS and CTOS before approving your loan application. If you have never gotten a loan before, the bank will normally suggest you take up a credit card to build your credit score.

Credit histories play an important role in housing loan approval. (Source: creditscoresandmore.com)

For graduates, your PTPTN study loan repayments will help you to build your credit, so be sure to have a good track record there! If you have not been a good credit owner, then you definitely need to address this by fixing your bad credit.'

3. Save up for your down payment

A down payment is perhaps the biggest challenge in buying a house. Before purchasing a house, you must prepare a sum of about 10% of your house value. Also, your down payment is important because of the significant impact it has on your home loan interest rate. In some cases, the higher your down payment, the lower your interest rate, along with lower monthly installments for your house.

As the saying goes, sikit-sikit lama-lama jadi bukit.

However, before the down payment, agents will first require you to sign a booking form, then pay booking fees. The sale and purchase agreement comes after that. After signing the agreement, you must pay the remaining down payment of about 10%. Thereafter, the rest of the purchase price will be financed with your approved bank loan.

4. Get mortgage assurance

Mortgage assurance provides peace of mind to those close to you for the future.

Mortgage assurance is vital to protect you and your loved ones in the event of untimely death or permanent disability. With mortgage assurance, you will be able to secure your 30-year home loan even if something happens to you during your home loan term. Future homeowners should review Mortgage Reducing Term Assurance (MRTA) and Mortgage Level Term Assurance (MLTA) details to find the package that best suits their needs.

5. Take advantage of local programmes

Get financing from local financial institutions or developers because you will probably require a home loan to purchase your property. There are many first-home programmes available, and research is essential before you decide which bank to leverage on for your home loan financing. Take into consideration factors such as interest rates, tenure, and flexibility in repayment when choosing your perfect home loan.

Programmes like Maybank HouzKey offer alternative loan financing solutions for purchasers.

6. Finding the right property

Owner-occupiers and investors generally look at different things when buying property. (Source: yourexpertmortgageteam.com)

Finalise your property selection according to your needs. Requirements will vary depending on whether you want to buy a property for investment or for owner-occupation purposes. If you are moving in with your family, you might want to start planning where to send your children to school.

Furthermore, nearby education institutes will affect your home value. In addition, you may want to review news on the area as well as past crime reports, because you don’t want to put your life at risk. You can even compare your neighbourhood or property with one of Malaysia’s friendly property portals!

Make your home ownership ride less bumpy

Gear up before you purchase your first home. You are buying a home for tomorrow, not just today. Remember, you have a wide variety of choices when it comes to real estate. You can seek the help of an agent if you are not sure which property suits your interest. Find your agent here.

(By Elmia Kayok, 21 Feb 2019)

We have a lot of readers with in-depth property knowledge out there. What would be your advice for first-time home buyers? Share your thoughts.

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So, buy within your means or ride on someone else's capital? ;P

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@carmenfoong Both, you buy something you can afford, but instead of forking out your own cash to buy, you leverage on other's capital to buy

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@carmenfoong Hi Carmen! Like shoes, there's no one-size-fits-all for property. Your personal strategy will depend on risk appetite and capital!

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At the end of the day, how far one's financial literacy and openness to accept information and take relevant risks are what matters