Top 10 Tips for Buying Your First Home Successfully
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May 19, 2023
Top 10 Tips for Buying Your First Home Successfully
There are countless first times in a person's life, from learning to walk for the first time in childhood, to falling in love for the first time in adolescence, and now stepping into the society and wanting to buy the first home of their own.
Every first time requires perseverance and hard work. If you want to buy your first house now, but don’t know how to plan? Don’t worry, I will share ten tips today, so that you can buy a house without worries.
Know Your Own Financial Ability
- Before buying a house, first-time buyers should have a clear understanding of their financial capabilities, including monthly net income, daily expenses and savings.
- Generally speaking, it is easier to get a bank loan as long as the monthly mortgage loan should not exceed 30% of your net income.
- If you feel that your salary is meagre and 30% of your monthly housing loan cannot be paid, you can try to increase your income, such as starting your own side business, and try to increase your monthly income, then use 30% of your net income to pay your monthly loan That’s not a problem!
Live In or Invest
- From the point of view of self-occupancy, you can choose a more comfortable environment, closer to your family, and you must prefer the area you like. After all, it is a long-term residence!
- For investment purposes, it is recommended that you choose areas that are more prosperous and have a lot of people because there is more room for appreciation.
- I would suggest that young people regard the purchase of their first house as an investment, because young people have a greater opportunity to go to other regions or countries for development. Don’t limit yourself because you bought your first home. Opportunities to expand your ambitions abroad or in better developed regions.
- If your first house is used as an investment purpose, when you want to buy the house you want to live in, you can sell the investment house you own to buy your own home.
- You can filter out the desired unit according to your financial ability (to buy an apartment/townhouse), including whether it is more cost-effective to buy a second-hand house, which area to buy a house, or buy a pre-sale house (buy directly from the developer and have not yet bought a house) built housing projects).
Learn About The Shopping Process
- After you have locked in an affordable house price and have a general understanding of the type of house you want, to buy the first house, in addition to starting market research, you must also master the procedures and specific words for buying a house. This knowledge can help you assess and set the budget for additional expenses.
- Some real estate terms are: downpayment, base rate, spread interest rate, real estate agency, agreement, deposit, housing loan, sales contract, stamp duty, mortgage insurance.
Budget For Buying A House
- You can calculate your budget for buying a house based on the ratio of contribution to income (DSR – Debt Service Ratio)
- After deducting 70% of the net income after paying the living expenses every month and other loans that need to be paid every month, that is about the housing contribution that you can afford to pay every month, and then calculate your budget for buying a house.
- Use the developed Internet to search for a housing loan computer, enter the loan amount you want to borrow, the number of years you want to pay the contribution, and adjust the interest (currently, the housing interest in 2020 is about 3.18%) to calculate what you need to pay every month loan to see if it is within your ability.
- If your budget is a house of RM500,000, the total amount of down payment you need is as shown in the figure below:
- According to the budget in the picture above, the total down payment is about RM60,000. That is actually just a conservative budget. Most of the pre-sale houses nowadays advocate low down payment, and many developers also offer kickbacks for legal fees. And after you sign the sale and purchase contract (S&P), if the house is not yet built, you don’t need to pay the monthly contribution, you only need to pay the monthly interest.
- Many developers have also launched Guaranteed Rental Return (GRR) packages, which means that when you buy a house from a developer, they promise to pay the buyer a specified rental return.
- For example, if you buy a house worth RM1 million, the developer will pay you a 6% rental return, and then remit the rent to you according to the quarter (1 month/3 months/half a year) stipulated in the contract. Bank account, let the developer become your biggest tenant.
Hire a Reliable Realtor
- This is very important, because real estate agents will help you deal with buying a house from a professional perspective and rich experience, including helping you find the ideal location, house type, unit size, loan term, land use rights and the budget for buying a house.
- PHR can be the backing behind your efforts to earn money to buy a home! We only sell projects under the famous developer EXSIM, and can recommend houses suitable for you according to your budget and preferences.
- We also have a professional team to help you review the financial report and analyse the loan approval rate for you from a professional perspective.
- We also help investment customers to rent out their houses, one-stop service to satisfy you!
Understand The Difference Between Loans
- Loans are divided into Base Rate (BR) and Base Lending Rate (BLR).
- The Base Rate (BR) is set by individual banks without interference from Bank Negara, while the lending rate is fixed.
- Banks will charge lenders the Effective Lending Rate (ELR) based on their respective benchmark interest rates plus a profit margin.
- The prevailing effective lending rate (ELR) for 2020 is 3.1%-3.55%.
- The Base Lending Rate (BLR) will fluctuate according to the base lending rate set by Bank Negara.
- You can research the existing loan packages and choose a repayment model that is most suitable for you.
Budget The Desired Interior Design, Furniture and Decoration Costs
- Decoration and interior design need a lot of money. You can list your favourite interior design concepts, furniture, etc., so as to calculate and rate the design that is more suitable for your budget.
- Many projects (such as Millerz Square under EXSIM) are semi/fully decorated, which saves you a lot of time and money.
Choose The Right Developer
- Ideally, you should have some basic knowledge of the Malaysian housing industry, such as the various types of houses and land, types of housing loans and loan guidelines, and the quality of developers.
- With new property launches you have to be very careful not to be swayed by fancy flyers and promises of free gifts.
- Before buying a newly launched property, you should check the developer’s previous projects and his reputation to see if it is reliable.
Learn About Government Policies
- The government has promoted various new policies to achieve the goal of “home ownership”, and these policies can help you buy a home for the first time.
- It is recommended to find more relevant auxiliary policies, and then choose the one that suits you best.
Take The First Step Bravely!
- When you understand all the consultations and clearly understand the house project you want, the next step is to take action to bring your dream into real life!
- As long as you have the right planning, your dream of buying a house will come true soon.
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