Buying property can be one of the biggest financial decisions you could make. So if you’re a first time buyer, then here’s a look at some of the questions you’ll need to ask yourself to find out if you’re ready to own a home or not:
Are you eligible?
There are different eligibility schemes for owning property like units from the Housing Development Board. So know if you qualify for any of them. However, aside from programmes for home buyers, a lot of families are also taking advantage of the rental programme that offers buyers on the waiting list of a Housing Development Board Flat with temporary housing. AsiaOne says about 1,300 households have already enjoyed the benefits that the program offers. About 240 families have since moved out of the temporary housing into the completed units. Launched in 2013, schemes such as the Parenthood Provisional Housing Scheme or PPHS, allowed couples married for the first time and with kids aged 16 and below to rent flats while they waited to move into one of the new units. A mere 3 months later, the scheme was amended to allow those without kids to participate. By November of last year, it was already possible for 2 families to co-rent a flat. With these adjustments, a lot of buyers could now qualify for housing schemes while they waited out their turn to move into a new unit.
How much can you afford?
It’s one of the questions you’ll have to ask yourself. Assess your finances, says Dollars and Sense. Financial capability is a major factor when you plan to buy property. So know what your budget is. A lot of homeowners make the mistake of looking at real estate first and getting their financing second. They’re surprised when they get their financing approved and learn that the bank didn’t approve the full amount after all. The result? They have to go to the trouble of adjusting their budget, after shopping around and taking a look at houses that turn out to be beyond what they could feasibly afford. So fix your financing first. When you’ve got a figure in mind, then start shopping around.
How to know your budget?
This isn’t just limited to your current income. You need to factor in any debt you currently have as well. If you’re still paying off some sort of debt or loan, then the money that goes toward paying for those financial commitments is money you can’t spend on your new home. Got a few more years before you can pay all that off? Then you might not be in a financial position to buy real estate at this point. It’s always best to start with a clean slate so make sure you clear all your debts off the table first thing. When that’s done, building up your savings and emergency fund is next. Why is that important? When you buy real estate, you’re going to work with a budget. However, emergencies could happen and you might find yourself deviating from the budget a time or two. You’ll realize that owning a home can be more expensive than you initially presupposed. If you haven’t got any savings, then you might not be able to keep up with the payments, much less have any to cover the cost of those emergencies. Not a great scenario. So if you don’t want to end up financially helpless in such circumstances, then start shoring up your savings and emergency funds. With a strong financial safety net against the future, you won’t have to lose sleep over any emergencies that might pop up a few years down the road.
What do you need to pay for?
After you get your financing, next up is to find out just how much you need to shell out for. An estimate is all well and good to give you an idea but fixed figures will help you create a budget and set aside money for expenses. Those expenses include the following upfront payments: option fee, your down payment and stamp duty on purchase. You also need to pay for any legal costs incurred which include stamp fees. Then you’ve got the agent’s fees along with the salesperson’s commission if you happened to use this service. Make sure you leave enough to cover a bevy of miscellaneous costs as well.
How to save on costs?
Given the mountain of costs you’ll have to take care of on top of your monthly bills and daily living expenses, there’s every need to make sure you save up on any fees and charges as much as you can. Using an online listing service can help. You can search for HDB flats with PropertyGuru Singapore. With online listings, you could start shopping around for the right home or housing unit for you in the comfort of your home. Since you’re just getting started with your home search, then this is a convenient way to pull that off. You might not save a lot but every dollar you do save adds up. You could also save on time and trouble by hiring a real estate lawyer to provide you with a legal overview of every transaction and give you the legal consequences and ramifications that could happen in case you sign a contract and break a regulation or two.
You’ll wrestle with a lot more questions as you move forward with your home buying experience. Hopefully, though, these questions have you eager and ready to ask, learn and know more.