What is Your Next Step in the Property Market?
When you flip open the papers or turn on the news nowadays, the common buzzwords are "INFLATION", " INTEREST RATE...
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 Reasons Why It’s A Great Time To Buy Property In Singapore In 2024
Singapore's property market is known for its stability, high demand and strong returns. With a growing population, low unemployment rates,...
Read More
The Top 10 Traits Of A Good Real Estate Agent
TLDR Jayson Ang, a reputable real estate agent in Singapore, offers extensive experience and a data-driven approach to guide clients...
Read More
The Lease Buyback Scheme Is A Strategy That Could Help You Retire Comfortably In Your HDB Flat
TLDR The Lease Buyback Scheme (LBS) trend among older Singaporeans is slowly gaining momentum, despite initial reluctance. The scheme allows...
Read More
The Best Time to Invest in Singapore’s Property Market: Timing is Everything
Investing in the property market is a significant decision that requires careful consideration and analysis. One crucial factor that determines...
Read More
A Comprehensive Guide for Buying Landed Real Estate in Singapore
TLDR When it comes to buying landed property in Singapore, there are three main types: terrace houses, semi-detached homes, and...
Read More
5 Techniques for Identifying Undervalued Properties in Singapore 2023
TLDR To spot undervalued properties in Singapore's real estate market, focus on market value, location, and unique features. Consider "up...
Read More
The Advantages and Disadvantages of Purchasing an Auction Property in Singapore
TLDR When considering purchasing a property through auction in Singapore, remember that you can potentially get a great deal below...
Read More
5 Pros of Buying a New Development
Deciding whether to buy a new development or a resale property can be a challenge. In the next few video...
Read More
When Is The Best Time To Buy A New Launch?
TLDR When it comes to new property launches, timing is crucial. Early buyers often secure the best prices due to...
Read More
Investing in Singapore Real Estate as a Foreigner
TLDR The blog post discusses the rules and regulations for foreign investors looking to purchase real estate in Singapore. It...
Read More
5 Reasons Why Districts 9 and 10 are the Next Big Thing in Singapore Real Estate
Singapore is renowned for its thriving real estate market, with many desirable neighborhoods and top-notch properties. However, when it comes...
Read More
Four Things to Avoid When Renting Out an HDB Flat
TLDR Renting out an HDB flat in Singapore can be a lucrative source of secondary income. Key considerations include adhering...
Read More
The 5 Most Popular Types of Properties to Buy in Singapore
The 5 Most Popular Types of Properties to Buy in Singapore 1. Condominiums: Condos are popular among buyers because they...
Read More
5 Insider Tips From Real Estate Experts On How To Get The Best Deal On Property In Singapore
Investing in property can be a great way to build wealth and secure your financial future. However, with Singapore's highly...
Read More
Top 5 Shopping Malls in Singapore for Luxury Shopping
Singapore, a bustling city-state known for its stunning architecture and diverse culture, is also a paradise for luxury shopping enthusiasts....
Read More
Avoid The Possibility Of Negative Cash Sales: Find Out How Much Your HDB Has To Appreciate To Steer Clear Of It!
TLDR When selling your property, watch out for negative cash sales that could leave you with no money after CPF...
Read More
Why Home Staging Is Important In A Competitive Real Estate Market
Singapore's property scene has always been a powerhouse, effortlessly combining the new with the old. It's a real estate playground...
Read More
Top 5 Vegetarian Restaurants in Singapore
Singapore, a melting pot of cultures and cuisines, offers a diverse range of dining options for food enthusiasts. For vegetarians,...
Read More
A Executive Summary Guide to the Singapore Real Estate Market 2023 and Beyond …
TLDR The Singapore real estate market is vibrant, driven by a strong economy, stable business climate, and attractive investment opportunities....
Read More
