Buying a home as a first-time homebuyer is going to be one of the most exciting times in your life. You’ve always imagined what it would be like to walk into a home that you own since you’ve always rented until now. Whether you are single, married, or a member of an extended household, you may wish to benefit from the advice you are about to read. Much of it was suggested by other first-time homebuyers to help make the process a whole lot less confusing. Here are some of what those other homebuyers have suggested.
Be Realistic in the Type of Property You Want
You may want to purchase a single-family dwelling with land, but the cost may be way out of your range. Many first-time homebuyers in Singapore do well with apartment or condominium flats because the cost is significantly lower. When it comes to flats and condos, you can choose one that is being built so you can have input in the layout and/or design. Understand that these may be costlier, but they may satisfy your wants and needs better. Here, it should be said that buying a house with land may be out of the price range of much of the population, so you may wish to spend your time looking at flats.
Understand the Types of Loans Available
Basically, there are two types of loans available for anyone seeking to buy a home in Singapore. These include the HDB loan you may need for government-subsidized housing and then there are bank loans that can also be used for public housing but are more often used for private property. Many Singaporeans choose the Development Bank of Singapore because DBS home loan rates are usually much lower than other types of mortgage loans. You can compare DBS home loan rates on sites like Property Guru which will help you calculate how much your monthly payments will be. You can also look at the left sidebar to look at bank-by-bank comparisons but the calculation app on the DBS page of the website will make calculating costs much easier.
Be Realistic in the Amount of Space You Will Need
While you may want a home with five or six rooms, that may not be affordable for you. Unfortunately, many people qualify for a higher home loan but for one reason or another lose a portion of their monthly income down the road. Unless you are planning on having multiple children or taking in extended family, it is always better to be conservative on the amount of space you really require. Bear in mind that you can always list your property for resale in the future if it becomes necessary, but for now, don’t look only at what you can afford now but look at contingencies for the future.
Do You Want to Be Part of the Designing Process?
Some homes and flats listed for sale are still being built. As a result, homebuyers can often be part of the designing process. You may be able to plan where you want your appliances so that electricians can wire your kitchen accordingly and you may also be able to choose various types of flooring or ceiling fixtures. Always talk to the developer before signing a purchase agreement if you have special wants or needs in which you can be part of the design of your home or flat.
A Closer Look at Home Loan Rates
At this point it is important to look once again at those home loan rates. As mentioned, often private loans like those offered by DBS may carry lower interest rates than HDB loans for public housing. You will also want to understand the types of loans available such as the difference between floating and fixed rate loans. Bear in mind that when a loan has floating, sometimes referred to as variable rates, you could be paying more or less as the market fluctuates. Also, if you are self-employed, you may not qualify for the size loan you want because income is hard to prove going forward. A lender will always want to be assured that borrowers will be able to repay the principal and also the interest attached to a mortgage loan. Remember, they are in business to make money so the amount and type of loan you qualify for will be based on your creditworthiness in the eyes of the lender. Buying a home for the first time can be just as confusing as it is exciting, so it is advised that you don’t jump in without doing your homework. Always be realistic on price, interest rates and your ability to repay the loan over time. Many first-time homebuyers lament the fact that they purchased a high-priced home with a floating loan a few years ago which they can ill afford now. If there is one word which will be most often advised in all aspects of homebuying it would be ‘realistic.’ Go conservative and you will find that you actually have time to enjoy your home instead of worrying how to afford it, and that’s the bottom line.