Top 5 Must-Try Foods in Singapore
Top 5 Must-Try Foods in Singapore Singapore, a melting pot of cultures and cuisines, offers a diverse and tantalizing array...
Read More
TLDR
Best practices for first-time homebuyers, the key points include setting clear and detailed goals, planning a realistic housing budget, keeping a savings buffer, researching property prices, carefully considering bank loan packages, and knowing when to seek advice. These practices aim to guide new buyers in making informed decisions, avoiding common mistakes, and securing their financial future in the property market.
As a first-time homebuyer, it can be difficult to know what to do with so much information online about the mistakes of other newbies in the property market.
Instead of focusing on the don’ts and negative examples, let’s take a positive approach and look at the best practices you should apply as you plan for your first property purchase, whether it be an HDB flat or private property.
Here are a few tips to get you started!
1. Set Clear, Detailed Goals
Simply saying “I want to buy a house” is not enough – not when it comes to achieving your dreams.
Turning a dream into reality requires setting a detailed goal – and an example of this is “I want to buy a BTO 4-room flat within three years with a maximum budget of $400,000, and pay off my home loan within 25 years.”
If you and your partner are looking to purchase a home, setting clear and realistic goals that are measurable, achievable and have a set timeline is essential for staying on track.
It is especially important for couples to be aligned with their financial objectives, as this will prevent any disagreement in the future.
2. Plan a Realistic Housing Budget
Many individuals strive to plan a budget for themselves; assessing their current financial position and anticipating future income, they estimate the cost of a home and its mortgage, as well as what they can realistically allocate each month. To get the most accurate results, some people even take advantage of our handy affordability calculator.
Buying a home is more than simply calculating property values, obtaining loans, and selecting mortgage rates – it’s also considering those extra expenses such as minor fees and the hefty stamp duty charges that tend to be overlooked by house hunters.
When it comes to budgeting for a new home, don’t forget to factor in the costs associated with making it a comfortable, livable space! Consider renovation costs, monthly utility bills, installation charges, insurance, Town Council or condo maintenance fees, and more – these are recurring costs that can add up quickly over time.
Think smartly when budgeting for a new home – even if it means opting for a smaller or less extravagant option – in order to factor in all associated costs.
You can adopt the 3-3-5 rule to manage your finances wisely until the purchase.
To start off, set aside 30% of the price of your desired property.
Additionally, make sure that the monthly mortgage is not more than a third of your monthly salary, and the property should not be over five times your yearly salary.
3. Keep a Savings Buffer
Many first-time homebuyers may be tempted to put all their money into their downpayment. However, it is important to remember to keep a cushion of savings, both prior to and following the purchase of a property. This savings reserve can be used to pay for various fees, costs and even unexpected emergencies – all helping to keep your finances secure and sound.
Putting away a portion of your earnings for a rainy day is always a sensible decision! Creating an emergency reserve with at least six months’ worth of expenses for your home, mortgage and other debts after purchase can provide a safety net should your income take a hit, like having your pay slashed or even losing your job.
4. Do Your Research on Property Prices
If you’re in the market for a resale flat instead of a BTO, it pays to do your homework and find out what constitutes a fair price in the area.
With the HDB resale market hotter than ever and prices at an all-time high, the temptation may be to throw caution to the wind and bid higher than necessary to secure your dream unit.
Yet with the valuation versus offer price of a flat differing by possibly five or six digits, it’s essential to have a good idea of the flat’s worth; otherwise, you could end up paying a huge Cash Over Valuation (COV) sum.
Before committing to a purchase, double-check the most recent HDB resale transaction prices to confirm that you truly can’t find a better deal in the area.
5. Carefully Consider Bank Loan Packages
Start your search early and arm yourself with knowledge on various loan offerings.
Compare the mortgage packages available from major banks in Singapore with a home loan comparison tool, and narrow down the best options that fit your profile and goals.
Don’t be tempted to settle for the first one that looks okay – take the time to truly explore your options and find the right loan for you!
6. Know When to Seek Advice
As a new home buyer, there are likely many details that you don’t know since you haven’t had time to do your research yet.
Rather than blindly making decisions without proper understanding, it’s best to consult those who have experience – otherwise, you may fail to notice the telltale signs that could create major difficulties in the future.
If you’re uncertain which home loan is right for you, our mortgage experts are here to provide unbiased, personalised advice – at no cost!
From a simple consultation to comprehensive guidance through the home loan financing process, they’ll be delighted to help.
Final Thoughts
- Carry out an in-depth financial analysis to guarantee you are making wise decisions for the near future and can confidently stand behind your decisions.
- Also take your timeline and family wishes into account, plan ahead and provide your family with a sense of security so that you can proceed with peace of mind.
If you’re curious about the prospect of relocating to private property and would like expert advice, I’m just a message away!
You May Also Like …
5 Key Insights to Take Away from the Latest 2022 Cooling Measures
TLDR Affordability of HDB Market: Government is focused on ensuring affordable public housing and may increase supply if needed. Long-term...
Read More
CPF Accrued Interest On Housing: Learn What It Is and How to Calculate It
TLDR Understanding the CPF accrued interest on housing loans is crucial for Singaporean homeowners. When using CPF funds to finance...
Read More
Top 5 Luxury Dining Experiences in Singapore
Singapore, known as the Lion City, is a melting pot of cultures, cuisines, and luxury experiences. With its rich history,...
Read More
Buying a Mega Development Condo? Here are 5 Overlooked Issues You Should Know
TLDR In the world of mega-developments, living in a large condo with over 700 units can bring challenges like ongoing...
Read More
Unveiling 4 Scenarios of CPF Accrued Interest Impact on Property Owners
TLDR When selling your first home, be aware of CPF accrued interest, which is the interest that would have accumulated...
Read More
Top 5 Places to Watch the Sunset in Singapore
Singapore, a bustling city-state known for its modern architecture and vibrant culture, is also home to some of the most...
Read More
Are Cluster Landed Homes Still a Good Investment? Analyzing Their Performance Over the Past Decade
TLDR When it comes to cluster housing, freehold properties like Bishopsgate Residences command top prices, whereas bargains can be found...
Read More
5 Reasons Why Your House Isn’t Selling – and How to Overcome Them!
TLDR When trying to sell your home, ensure it is competitively priced based on its unique features and the current...
Read More
Are You Ready to Take on the Singapore Property Market in 2023? 12 Reasons to Be Hopeful (Or Wary)!
2022 sure was a rollercoaster ride for the property market, and the world! From war in Europe to skyrocketing interest...
Read More
Top 5 : Places to Find Unique Singaporean Souvenirs
Singapore, a vibrant city-state known for its multicultural heritage and modern marvels, is a treasure trove of unique souvenirs that...
Read More
Exploring the Resale Condo Market? Here’s What to Watch Out For!
TLDR The impact of COVID-19 on Singapore's real estate market has been significant, leading to a surge in demand for...
Read More
The Impact of a Real Estate Agent on Your Property’s Selling Price
TLDR In the world of real estate, the value of property agents lies in their ability to create competition among...
Read More
Top 5 Factors to Look for in a Property Developer
With a highly competitive property market, it's crucial to choose a property developer that you can trust to deliver quality...
Read More
Top 5 Reasons : Why Ultra-Rich Families Racing To Park Wealth In Singapore
Singapore, a small island nation in Southeast Asia, has become a magnet for the world's ultra-rich families seeking to park...
Read More
Top 5 : Why Ultra-Rich Foreigners Will Still Buy Property In Singapore
Singapore, a small island nation in Southeast Asia, has been steadily gaining recognition as a hotspot for the ultra-wealthy to...
Read More
The Top 5 Renovation Tips For Increasing The Value Of Your Singapore Property Investment
When it comes to increasing the value of your Singapore property investment, strategic renovations can make a significant difference. Here...
Read More
6 Must-Know Factors to Consider When Purchasing a Resale HDB in 2023
TLDR When buying a resale flat in Singapore, make sure to walk around the neighborhood to assess actual distances, check...
Read More
Top 5 : Questions Should Investors Be Asking Before Investing In Singapore’s High-End Rental Market
Singapore's high-end rental market has been a hot topic of discussion among investors worldwide. With the city-state's robust economy, excellent...
Read More
Top 5 Best Scenic Drives in Singapore
Singapore, a bustling city-state known for its modern architecture and vibrant culture, also offers some of the most picturesque driving...
Read More
