Why Cash Over Valuation (COV) Doesn’t Matter Anymore
TLDR HDB’s old strategy of hiding Cash Over Valuation (COV) data isn’t cooling Singapore’s resale flat market anymore. Prices keep...
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 …
Retiring in Singapore? Here’s Where to Find the 5 Best Property Investments for Comfort and Security!
Retirees have unique needs when it comes to property investments. They require properties that offer comfort, security, and easy access...
Read More
How Will Singapore’s Development Influence The Real Estate Markets In Bedok, Changi, Pasir Ris, And Tampines : 2023
TLDR You will find detailed insights into upcoming housing developments in the East of Singapore, specifically in areas like Bayshore,...
Read More
Selling Your Singapore Condo? Don’t Overlook This Critical Factor
TLDR When selling a condo in Singapore, the number of units listed in the same development plays a crucial role....
Read More
Top 5 Dessert Places in Singapore
Singapore, a melting pot of cultures and culinary delights, is known for its mouth-watering food scene. From hawker centers to...
Read More
Top 5 : Potential Risks Should Be Considered When Investing Property Within Singapore’s Competitive Real Estate Markets
Singapore, a bustling financial hub in Southeast Asia, has seen its real estate market flourish over the years. The city-state's...
Read More
Finding Your Dream Home In The Near Future. Exciting Upcoming Property Launches In The First Half Of 2024
TLDR The real estate sector in 2023 saw significant policy shifts affecting both private and public housing, with various changes...
Read More
5 Reasons : Can Your Real Estate Investment Hedge Against Inflation?
Inflation is an economic phenomenon that can have a significant impact on an individual's financial well-being. As the cost of...
Read More
Top 5 Best Hidden Photography Locations in Singapore
Singapore, a vibrant city-state known for its iconic landmarks and bustling urban landscape, is also home to numerous hidden gems...
Read More
Upgrading to a Condo by Age 35: A Feasible Goal for the Average Singaporean in 2025?
TLDR Upgrading from an HDB flat to a condo by age 35 is technically feasible for median-income Singaporeans, but only...
Read More
Top 5 : Long-Term Economic Impacts Of Foreign Real Estate Investment In Singapore’s Luxury Condo Market?
Singapore has long been a preferred destination for foreign real estate investors, particularly in the luxury condo market. The city-state's...
Read More
Top 5 Factors : Buying Resale vs New Launch Property in Singapore: Which is Better?
The decision to invest in a property in Singapore can be both exciting and daunting, especially when faced with the...
Read More
HDB’s Policy Shift for Young Couples: Progressive Step or Cause for Concern?
TLDR Starting July 2025, HDB will let young couples—where at least one partner is a full-time student or NSF—defer income...
Read More
What Is Cash Over Valuation in HDB (COV)
TLDR Cash Over Valuation (COV) in HDB resale flats occurs when the purchase price exceeds HDB's valuation. COV cannot be...
Read More
Buying a Second Property – 3 Key Factors to Consider
TLDR When navigating the complexities of purchasing a second property in Singapore, ensure you meet eligibility criteria, consider affordability factors...
Read More
Top 5 Factors : What Is Considered “Luxury” In The Singapore Property Market?
The Singapore property market is known for its high-quality residential properties, attracting both local and international buyers. Luxury real estate...
Read More
Budget 2024: What To Expect For The Singapore Residential Market?
TLDR In 2025, owner-occupiers of residential properties can benefit from property tax relief based on the Annual Value Band. Retirees...
Read More
What’s A Fair Price For An HDB Flat in 2025? A Savvy Buyer’s Guide
TLDR There’s no single “fair” price for HDB resale flats—what’s fair depends on your needs, motivation, and timing. To navigate...
Read More
Discover the Optimal Timing to Invest in Singapore Real Estate: Unveiling Historical Insights
TLDR When considering the best time to buy or sell a property in Singapore, historical data analysis reveals key insights....
Read More
New Condo Sales Surge: Decoding Singaporeans’ Enthusiasm Despite “High” Prices
TLDR Recent strong condo sales in Singapore, including Emerald of Katong’s 99% take-up during launch, challenge perceptions of unaffordability. Key...
Read More
