People make the decision to buy a house for many reasons. It can be for investment or just for their own-stay.
Whichever reason you choose, use this complete guide to get your dream house in just 11 simple steps!
1.Set your goals
Goal-setting is a powerful process to determine your priorities and turn your vision of your dream home into reality. How can you set the perfect goals for your ideal home?
These are the key factors that you should be analysing, which will help you decide between a good or bad purchase:
- Location of the property
- Surrounding infrastructure/amenities
MORE: Are you ready to purchase or is it a case of #FOMO?
2. Figure out how much you can afford
To buy a house, first you need to figure out how much monthly instalments you can afford. Before applying for a housing loan from the banks, you need to set your budget.
The recommended guideline for a monthly housing loan instalment is that it should not exceed one-third of your total household income. For example, if your household income is RM3,000, your monthly instalment should not exceed RM1,000.
3. Check your credit scores
An important step is to check your credit scores with the Central Credit Reference Information (CCRIS) and Credit Tip-Off Service (CTOS) reports before deciding on any purchase. A credit score is a scoring system that lenders use to help determine whether you qualify for a particular credit card, loan, mortgage or service.
You can get your CCRIS report at Bank Negara’s headquarters in Kuala Lumpur and any of its branches, or just fill up the CCRIS request form. You can then send the completed form by mail, fax or e-mail with the supporting documents to:
BNM TELELINK
Jabatan LINK dan Pejabat Wilayah
Tingkat Bawah, Blok D
Bank Negara Malaysia
Jalan Dato’ Onn
50480 Kuala Lumpur
Fax No: +603 2174 1515
Email: [email protected]
For CTOS, you can get a free basic report by registering yourself on the website that is operated by a privately-owned company. A more detailed MyCTOS Score Report is available at a reasonable fee.
Most first-time home buyers make their biggest mistake when they book a house without checking their credit scores first. This will be a huge problem if you have bad credit scores and apply for a housing loan. The bank may reject your application. You could lose your booking fees and have to say goodbye to your dream house!
4. The all-important down payment
A down payment is what you need to pay upfront when buying a house. First-time home buyers are normally required to fork out 10% down payment. The balance will be financed through a mortgage. However, the margin of financing may vary according to your financial credibility.
READ: 5 Smart tips to save for your home down payment fund
5. Other additional costs
Aside from the down payment, you have to be aware of other additional costs and fees involved in purchasing a house. These include legal fees, stamp duties, Sales & Purchase Agreement (SPA) fees and valuation fees. However, some banks or developers will offer to absorb legal and SPA fees to attract buyers!
READ: Latest stamp duty charges & 6 other costs to consider before buying a house in 2019
Pro Tip: Too much calculation for you? Don’t worry, we have got your back with LoanCare, our home loan eligibility indicator.
Now you can estimate the chances of your home loan being approved. We make it easier for you with our home loan eligibility indicator to calculate and compare your options with up to 10 banks. There are a few factors that determine your eligibility and they may differ from bank to bank.
6. Get estimated average prices at your preferred location
By this stage, you should have a budget and already chosen a location for your dream home. The next step is checking the current average market value for these properties.
This can be done with just one-click via brickz.my which provides the latest transactions of second-hand landed houses and high-rise units in Malaysia. You can get an overview of how much you will have to spend for your preferred location. Find out how you can use brickz data for a more informed purchasing decision.
CHECK OUT: Coming soon: Better data to help your property buying decision
7. The dream house hunt begins
House-hunting can consume a lot of your precious time! Here’s how to save your time: Simply filter your search by the area of your interest that’s within your budget range using the iProperty.com.my website, or download the app via App store and Google Play Store on your mobile phone. You can even customise your search further by the number of bedrooms, built-up sizes and property types – either new launches, sub-sale or auctioned properties.
An added plus of the iProperty.com.my app/site is the enhanced user experience. Some special features include:
- Smart notifications to inform you when new property listings hit the market and meet your criteria.
- Shortlist favourite properties easily and view the shortlisted properties in the “Saved” tab, allowing users to have a personalised experience.
- Save your property searches easily and scroll through your search history anytime.
8. Choosing the right real estate agent
Some first-time home buyers may decide to purchase their house on their own without the experienced and expert advice of a real estate agent. However, the process of buying a house can be too overwhelming at times, and this is when you need professional help.
Pro Tip: An important rule to remember when choosing a real estate agent is to do some background research. Consider the following rules when choosing your real estate agent:
- Experience
- Understands and fulfils objectives within your budget range
- Excellent communication skills and diplomacy
- Knowledge of various mortgage products available in the market and has a good circle of professional connections – bankers, lawyers and valuers
9. Getting the best home loan
Choosing a home loan is a decision that will affect your financial commitments for a long time, and you need to choose wisely.
When choosing the best home loan, take note of some key points:
- Type of loans: Islamic or Conventional Home Financing
- Interest rate: Fixed or floating
- Tenure of loan
MORE: How many types of home loans are there in Malaysia?
10. Engage a lawyer
It is recommended to get your own lawyer to draft and sign the SPA and loan agreements. You may ask your real estate agent to recommend a good and effective law firm.
Why is it necessary to hire a lawyer, you ask? A legal professional not only ensures that all your documentation is in order, but can also help with the planning of wills and trusts too.
More here: 5 things a lawyer can do for you when purchasing a house
11. Close the deal!
After your loan has been approved, this is the final step for your home purchase. Your lawyer will require you to sign all the documents and legal papers. Always read through your documents and agreements meticulously before signing them off. If you have any questions, ask for proper legal explanation and advice.
You will then need to wait while the respective documents are processed. This may vary depending on the type of property that you purchase. For sub-sale properties, you can collect the keys to your new dream home from the seller within the period specified in the SPA.
FIND OUT: What Do I Do After Signing The SPA For A Secondary Property?
For properties under construction, you will probably have to wait for the home or project to be completed before vacant possession and securing the keys to your new home!