When first-time home buyers buy their first residential property they are often so anxious to close the deal quickly that they forget to do the home inspection – a decision they may pay for dearly in the future.
By: Phoenix Lee/
Property analyst Ku Swee Yong notes in his book ‘Weathering A Property Downturn – Defensive Plays for Real Estate Investors’, that bad workmanship is apparent in several public housing developments.
“Bad workmanship is not just getting more apparent in private residential developments. Some of the recent incidents in public housing discussed in Parliament included: defects and design flaws in DBSS (Design, Build and Sell Scheme) flats such as Centrale 8, Pasir Ris One and Trivelis, and BTO (Build-To-Order) flats in Chua Chu Kang, Pungol and Bukit Panjang. Residents complained about overly narrow corridors, cracked walls, plaster slabs falling off the façade of HDB blocks, uneven flooring, leaks and overflowing toilets.”
A residential property is a big ticket item and remains the biggest financial commitment for most first-time home buyers. This is why you should make sure that the home you buy is in the best possible condition, before rushing to close in on it.
Jumping into a deal is one of the most common mistakes first-time home buyers make.
They fall in love with a property, worry about losing out, and throw caution to the wind or spend more than they should. A residential property is one of the biggest investments most people ever make, so it’s important to plan ahead, to think about what you need in a home and what you can afford.
Getting pre-approved for a mortgage is a great way to budget for a home and signal that you’re a serious buyer. Buying a home is an important decision. Many people may not be aware of their own financial health and hence overestimate their ability to buy a new residential or commercial property.
Often property buyers commit to buying a property and pay for the option to purchase only to realize that they cannot get a loan, therefore losing their 1% OTP. Worst still, some property buyers may have exercised their option to purchase without a bank loan in hand only to find out later that banks may be unwilling to lend them.
Keep in mind that the amount for which you are approved is the maximum amount the lender feels you can afford based on your income and projected property expenses. That figure doesn’t account for other expenses you may face, such as renovations or emergency home repair, as well as regular household costs.
The last thing first-time home buyers want to do is hang themselves out to dry with mortgage payments that are simply too high to carry.
First-time home buyers should also know their credit score. A credit rating is a record of your credit history and current financial situation. A good credit rating can improve your ability to get loans, so if your score is low, you may want to work on improving it before you apply for a mortgage.
Being a homeowner brings new expenses, including property taxes, higher insurance costs, regular upkeep and an emergency fund for repairs. Don’t forget to factor in the cost of any renovations your new home may need.
First-time home buyers should not rush in to buy their first residential property without considering the overall cost of home ownership, including the cost of the proeprty, the type of mortgage, the amortization period and payment options.
Remember that paying off your mortgage sooner saves you interest costs, while a longer amortization period reduces your regular payment and frees up cash flow. You can save thousands of dollars in interest by choosing a shorter amortization period. Use an online mortgage calculator to run the numbers.
When calculating the costs of closing your first home, assume that you will need an additional 1.5 to 2.5 per cent of the purchase price to cover such things as the home inspection, legal fees, taxes, property insurance, utility hook-ups and moving costs.
How to Secure a Home Loan Quickly
For first-time home buyers, planning to buy a new private home could be stressful as they are ensure of funds availability for purchase. But worry not, because iCompareLoan mortgage broker can set you up on a path that can get you a home loan in a quick and seamless manner. We are the experts who do the work for you for free, while you lean back, rest and rely on our professionalism at absolutely no cost to you.
Our brokers have close links with the best lenders in town and can help you compare Singapore home loans and settle for a package that best suits your home purchase needs. Find out money saving tips here.
Whether you are looking for a new home loan or to refinance, the Mortgage broker can help you get everything right from calculating mortgage repayment, comparing interest rates all through to securing the best home loans in Singapore. And the good thing is that all our services are free of charge. So it’s all worth it to secure a loan through us.
For advice on a new home loan.
For refinancing advice.
White site at Pasir Ris receives weak response to tender Next Post:
What every first time homebuyer should know