6) Start small and aim big later
Buying a house is your first step to building your financial net worth. However, before you look for one, it is worth doing some research on the type of property and location that match your financial capability. It is a long term commitment; it makes sense to start small as a first-time buyer before moving to bigger and more luxurious properties. With interest rates speculated to increase in the coming years, it is always good to look for fixed interest rate loan to avoid any financial turmoil that may result in a spike in your monthly repayment.
– Ho Kah Wai (Alex), Principal, Actfast Properties
7) Are you ready?
Forget about home buying criteria and jargons, like location, leasehold, freehold, single storey, apartment, condominium, KLIBOR, DIBS and so on. The one most important home buying tip for a first time home buyer is to decide whether you can afford a house and whether you are ready to be a property owner.
The general rule of thumb is to calculate your affordability by checking if your total housing debt to income ratio does not exceed 33 %. Another simple, conservative yardstick is your mortgage debt alone should be less than 28% of your monthly income.
It is important for first-time buyers to ascertain this first before going futher in the process of buying a home. Always buy or rent according to what you can afford.
– Hj. Abdul Razak Bin Mohamad Yatim, Director, Hartanah Consultants (Estate Agency) Sdn Bhd
8) Save money by choosing the right location
To select the best location involves considering a few factors, such as the location of your workplace and your spouse’s workplace, distance to a school (if you have children) and all your other needs. By living too far from your workplace, you will end up spending more on transportation to work, such as petrol cost and toll.
However, if your options are limited, consider buying a home with the convenience of public transport, such as near an LRT or KTM station to save on transport cost and travelling time.
– Madhavan Nambiar, Principal, Country Properties
9) Inspect before bidding for an auction property
For prospective buyers who are considering auction properties, there are a few things you must do before you consider bidding for a property. First, inspect the property to check on the physical condition of the property, and to see if a major repair is needed. Once you are satisfied with the condition of the property, contact the auctioneer to obtain a copy of the Proclamation of Sale. Read the terms and conditions carefully as they vary with different banks. Request or apply for a loan qualification with your friendly banker before bidding, to ensure you are capable to meet the settlement timeline for the balance of payments.
– Danny Loh, Property Auction House Sdn Bhd
10) Engage an independent mortgage advisor
Before making the huge decision to buy a home, ensure you have a clean financial record to prevent hiccups when applying for a loan. If you have any outstanding debt with credit cards and personal loans, consolidate your debt. You can also check your credit report at the Central Credit Reference Information System (CCRIS) for free.
A property can be the biggest and most expensive item you purchase in your lifetime. Therefore, plan, save and ascertain that you will be able to pay your down payment before making the decision to buy.
It is also important to use an independent mortgage advisor, such as iMoney, to compare all banking property loan products, to ensure you get the best housing loan offers available.
– David Yong, Director, propertrack Real Estate Investment Services
11) Choose a property based on your finances
As buying a house is a huge financial decision, a potential buyer must consider all aspects – emotional ride, the added responsibility and the finances involved – before deciding on a property. A good place to start is to know the monthly repayment you can comfortably afford and what houses and location fit your price range.
– Wendy Tong, Head of agency, PA International Property Consultants (KL) Sdn Bhd
12) Do not rush
Many a times, I have seen people rushing to buy properties without doing thorough research and discussion with family members. A prospective buyer should conduct a detailed and thorough investigation into the home, the location, and the financing process before purchasing a property.
Some of the things a buyer should check before buying are:
Fair market value (to avoid overpaying)
Title particulars i.e. tenure, restrictions in title, encumbrances, etc.
– Locational characteristics (survey the area around your potential home to ensure there are no negative factors, such as high-tension cables, oxidation pond, or prone to flood, etc.)
– The physical condition of the house (e.g. building defects, illegal extensions/alterations)
– Last but not least, do the numbers! (Don’t over commit yourself lest you find yourself in financial hot soup)
The above checklist is by no means exhaustive, but offers a simple guide to avoid stress and problems upon purchase. It is important for buyers – first time or otherwise – to exercise prudence and caution to ensure one do not end up buying something one would regret later or worse, find oneself in financial trouble.
– Sr Michael K. K. Kong, Registered valuer, MacReal International Sdn Bhd
The tips and advice given above are extremely important to take note of, and it can possibly save you from making a bad decision that you may regret later on.
Ultimately, though, one’s choice in choosing their dream home is a personal decision – one that differs for everyone.
Have you bought any property or are you in the process of buying one? Share with us some of the tips or lessons you have learned in the comment section below.
*Iris Lee, iMoney