27 Feb 2018
With the Chinese New Year marking the beginning of the year for most Asians, everything begins on a fresh new slate. We reset past actions and start anew this year, making them a good one. For some and that may include you, buying a new property may be on your resolution checklist.
For potential buyers looking for a unit to live in, here are 5 tips that will make buying a property as hassle-free as possible. Buying a property is a big decision and big money is involved – it can be tough. At ERA, we understand the immense happiness and fulfilment when you buy a home you love but the process can sap your energy and make you exhausted. Thus, let us who are geared in this industry help make your home purchase a happy experience! Happy owners are the pride of our work.
1) Make a checklist of what you need in a home
The key word here is, need. For example, a need is deciding on how many bedrooms do you need to accommodate your family. That amazing pool view from your balcony window – is a want.
2) Assess your financial situation
Are you still eligible for a HDB loan or do you have to take a mortgage loan from a bank? If you are taking a loan from HDB, the first thing you need to do is assess your Housing Loan Eligibility (HLE). For details on HLE, this link from the HDB website will be helpful.
Source: http://www.hdb.gov.sg/cs/infoweb/residential/financing-a-flat-purchase/housing-loan-from-hdb/hdb-loan-eligibility-application
If you are taking a loan from the bank, this is the time to identify which banks offer the best rates or packages that will work for you. There are various online services that compare rates from banks e.g. housingloan.sg, or to have sound advice, you can approach our ERA agent and request for a comparison. You should also factor in the revised Loan to Valuation Rates as well as the Total Debt Servicing Ratio Regulations (TDSR) issued by the Monetary Authority of Singapore (MAS).
Source:http://www.mas.gov.sg/~/media/MAS/Regulations%20and%20Financial%20Stability/Regulations%20Guidance%20and%20Licensing/Finance%20Companies/Guidelines/TDSR_Guidelines_MWL_100317.pdf *Page 5 of 6
3) Take note of your future finances
If you are a Singaporean citizen and are considering utilising your CPF in your home purchase, take note of how the various CPF limitations might affect you in the future, for example, the required minimum sum balance, the 120% withdrawal limit for housing loans. Also, remember that your employer’s CPF contribution decreases as you age, so you would have to fork out extra cash to pay off that monthly mortgage.
4) Have your decor concept in mind as you scour for homes
Now, comes the fun part! Bring up the image in your mind when you think of your home. As you shop for homes and view houses, decide on that one house that is closest to your ideal home. Renovation costs can add up, especially if there is a lot of hacking involved. So, you really don’t want to splurge on that, but channel that expense in a wise way, for instance, that amount of money could be put aside for your well-deserved holiday or on your child’s education.
When buying a resale property, you can save cost if you make use of existing features that can be spruced up with just a polishing or a fresh coat of paint.
5) Keep in mind your long-term/retirement plans
To purchase a freehold or a leasehold? That is the question. And it can be a tricky one. Your long-term plans may influence your decision to purchase a freehold or leasehold property. If you plan to sell your flat or house to fund your retirement, it may be wiser that you consider buying one in an underdeveloped or less developed area which would be fully developed by the time you’re ready to cash out.
In our next article, we will have a look at what you need to take note of when buying a property for investment purpose. It is very different from buying a property for own stay. Stay tuned! Meanwhile, happy house shopping!
