What To Expect When Buying A First Home
We subscribe HGTV channel on cable. One of the must have channel in the long list of subscription. The few shows that I am very drawn to are House Hunters, Property Virgin, Income Property and My First Home. The show would showcase houses, neighborhood, community and their landscaping.
It is very interesting to watch how much the houses were worth in the market based on location and size. The closer the house to the city or resort area, the more expensive the properties are. So in order to keep with in the budget, sacrifice has to be made, getting lesser footage in order to live closer to town.
Living in suburbia may not suit everyone who wish to be close to the metro, a walking distance to the stores, bars etc, in short, buyers who wants action in their lives. However, the perks here are getting more square feet to a landed property, bigger yard and getting bang for the bucks.
I probably didn't consider that when I start shopping for a house more than 7 years ago. All I wanted was a single level house with a brick tile roofs. Pretty superficial huh? But that just show how naive I was, but as I start my journey to look for a house, I become comfortable with the idea that I may not be getting everything in my wishlist having such small wallet. But I persevere, I knew that will be a house for me out there. I think it took me 2 years and finally when I found my single level house with the matching tile roof, It didn't take a day to get my hands on the S and P.
There were so many things to consider, being a rookie and alone on my own, I can't believe that I went through all that. Now, as I watch the House Hunters series, I feel excited, looking into the choices of house, reviewing the layout, the rooms and designs. It made me wanted to buy another house.
If you are thinking about buying a house, you will first need to have A Steady JOB. Unless you have old money or married money, you will need a job and some kind of saving for deposit for the house. Even if you managed to get approved for 100% loan, you still need money for the renovation, electrical fixture and furniture.
In Malaysia, there is no need for Realtor. When you buy a new house, most of the process is pretty easy. The developer normally have number of financial institutions (local bank) ready for selection, besides that, there will be a need for a solicitor to legalize the purchases. Most new houses offer lots of freebies for the buyer. There will be free stamp duty, free lawyer fees, free furniture or cabinet etc. This actually helps to ease the money woes when purchasing a new house. If you have reservation and not sure if you can afford a house, try work out your budget using a mortgage or loan calculator online.
You may still need some funding for emergency situation, if you have EPF, you can withdraw money from your 2nd account for house deposit or repaying the loan every 3 years. All you need is the S and P and a form to fill in from KWSP or EPF. This info can be easily retrieve online or you can go to the EPF office and they will guide you. It probably take a week or two to get the application processed and approved before EPF mail you the check for the house.
It will take some times to get the house completely move-in ready, specially if you bought a new house. If you are currently renting, don't end your lease right after you sign the dotted line or else you may end up homeless. (New construction never complete on time!) It is very exciting after making a big purchase, you don't even have to pay the housing loan until you received the house key. Take the opportunity to save the money and not splurge on furniture yet. Staying with families will definitely help towards your goal to fund for a house. Another way is renting a smaller and cheaper room/house for a short time. Stash away your saving in a mutual or unit fund which will produce dividend as well as growth when the time come to pay for deposit or home payment.
It is also help to have a housemate to foot some bills and getting you up to speed with your new financial situation. Paying that first mortgage going to be a hit no matter what, any help you can get is definitely great.
What I did not know when I buy a house?
- Lawyer fees for bank loan agreement (~5% of cost of house, don't forget stamp duty for this!)
- Fans and lights are not included - you also have to pay for electrician to install them.
- Grilles or bars for the house are not included - you will need to pay for the material and labor cost to install them.
- Mortgage protection and Insurance payment (but this is included in the loan payment)
- Utilities bills (this may not amount to much in the beginning, remember to take into account when you buy a house, you also need to pay utilities bills on top of loan payment)
- If kitchen cabinet or gas stove, gas tank or gas line is not included, you will have to see that it's in before you live in.
The first year of waiting for the house to be ready and then getting adjust to the additional expenses may give you as much headache as well as anxiety. At the end, as homeowner I am happy with my purchases, I did enjoy decorating the house turning them into a home sweet home. Will I do this all over again if I have the chance? Oh yeah, For SURE!