03 October, 2006

Notes on Buying a Property for Beginners

Seven simple steps to a beginner.

step 1: Getting the down payment
Own Saving (FD), EPF, borrow from relative, parent, silbings, etc. , or look for low down payment developer. Of coures, i don't ask you to borrow from Ah Long (private finance with no gurantee, no deposit, fast approval). Again, get it from right channel.

step 2: How much you can borrow
Check with banks or financial institution, some can offer from 100% - 80% depend on type of property and banks. Friend, some of even offer 110% loan package come under the developer advertising strategy..rules of thumb here is the installment is about 1/3 of your monthly income and currently it increases the lending power up to 1/2 of your monthly income. Again, final reminder, Not Borrow from Ah Long ( they are not called Sharks for nothing..)

step 3: Factor in the many costs (including hidden)
Simply name few of the costs that you may not be aware, of course, you may not strange to MRTA/MLTA, how about those like stamping duty, legal fees, inspection fee, land title search, transfer fees, valuation fees, processing fees, etc. These are all dollar and cent. Get the quotation out from Banker / Lawyer firm and make a comparison, it can help you to estimate more accurate on budget.

step 4: Check out the different loans and terms
This one even more easier. Flip over the newspaper or switch on ur radio, you can always hear Bank A or Bank B or/ even Bank C offering unbelievable home loan.. Give them a call, tell them about your property, location, purchase price, they are very helpful to serve you and offer you the best loan package. Then, you can ask them about the term and condition of the loan agreement as it may vary from one to another. Normal information that you need to know is, of course, how much the installment, loan tenure, bonding period, penalties imposed for defaults, other facilites involve, etc.

step 5: Shortlisting of locations and/or type of properties.
Location and type of property are always justified the price of the property. It helps you to understand the limit and affordability of individual. For instance, you can't take Rawang property compare to Subang property. Then, list out the amenities you are looking for or all requisite for dwelling purpose. Property price can be easily obtain from the classified or any property agent.

step 6: Return of investment or just in case
If you aim for appreciation return will be landed property, rental income will be high rise condo/apartment, etc. After that, pay a visit to site to check out the actual condition and the surrounding environment. Then, classified section in newspaper also is also very informative to understand the market value in demand and supply ratio.

step 7: Do a comparison chart and be patient
Always No Hurry on buying property! Hurry will be misleading your decision. Outline all the collected information, in term of pricing range, location, affordability, loan interest or packages available and total cost involved. Plot a chart and make a comparison, the more systematic approach you do in comparison, like tabulation or chart, the clearer picture you get on the Intended-to-buy- Property!

At the end, wish you good luck in getting your Dream Home!