Friday, March 20, 2015

Housing Blues - How to buy a house

Home ownership

It's one of the most adult thing you can do, and one of the most expensive thing you can own. Buying one is such a pain in the ass which sometimes makes you just want to rent forever or live with your parents.

However some people based on their own calculation, prefer to just rent or in a long term lease compared to buying.

I never knew how hard it is to buy, or maybe I just got too excited and easily pushed by everyone.

This is my step on how to buy a house using plain old simple terms

  1. Check how much loan are you qualified. Go to a bank and discuss how much loan can you apply. Just provide what other loans you have and they might figure it out.
  2. Prepare yourself for the loan
      • Identification card
      • 3 months pay slip
      • EPF form
      • Staff ID
      • Letter from company saying you are a worker
      • 3 months bank slip
      • booking receipt after you paid the fee (this is the last step, just make sure you prepare everything else first)
  3. Go find a home! You can either choose a new home or a home that someone has lived in (called sublease)
  4. Make sure your bank actually supports the company that is selling you the house if you are buying something new, So ensure that you have applied to at least 3 banks. Your  real estate agent might do it for you, but it's good to do it yourself too so that you are in control of where your money goes.
  5. Then make sure you have 10% of the total price in your pocket as a down payment for your home. Some do offer lower down payment but 10% is the norm. You can either save, take up a loan or borrow from someone. I suggest you save up. Other options are very tricky to handle if something goes wrong with the deal.
  6. Other fees, yup there are other fees to pay such as legal and stamp fees for Sales and Purchase (S&P), legal and stamp fees for Loan Application, valuation fees and real estate agent fees. These would add up to about roughly 11% of the cost of the home. 
      • However it might change due to discounts by the bank or if you bought a new home it's a discount by the property company
      • It's better to just have the extra 11%, if it's less you can use the funds for something else.
  7. Don't let them fool you or rush you, They usually give you about 20 days after you paid the booking fees for you to settle your loan.
  8. Boom you have a home.
As much as I think it was that simple, it turned very stressful for me. I thought I was eligible for the 100% loan but  I was not. Too bad the news comes after I paid the 10% down payment. The blame is place on me apparently because I was not to sign the SPA without my loan being approved. However the loan improvement took longer than 20 days I had to pay the down payment or I would be penalized for paying it late.

This a big step for me. Perhaps I should just started with a cheap home and learn the basic of home ownership. Gosh, in 2 more years, there will even be more drama with the various fees that comes with owning a home.

Can't wait..... 


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