Buying a house is one of the biggest financial undertakings in a person’s life. Some say it’s an emotional rollercoaster. But I am here to tell you that we don’t need to pour out our emotions for this decision. We just need to be prepared.
Here are five things you need to do before and during the start of searching for a property:
[thrive_headline_focus title=”Do proper research and preparation” orientation=”left”]
This is the first step and probably where most home buyers fail to do. Make sure the decision to buy is rational, well-researched, and certain (not rushed or emotional).
[pullquote align=”normal”]The biggest risk for any ordinary homeowner is when you didn’t do any research not on the property itself but on how much you can afford. [/pullquote]
Understand family finances and needs. Before looking into buying a house, enumerate assets, list debts, and get pre-approved for a loan.
Research takes time. Don’t be obliged to rush on to buying. Don’t be pressured by what your friends or family members say. Instead, focus on knowing yourself more, what you consider essential for you based on your disposition (growing family, retiree), and your capacity to pay.
Remember that buying a house is a financial transaction. You must first understand where you are now and ensure that your finances are in place to meet your big decisions and future challenges.
Use your head, not your heart.
[thrive_headline_focus title=”Get a pre-approved loan” orientation=”left”]
This is the second step that most Singaporeans are not completely familiar with.
The AIP is a guarantee that the bank will provide you with the loan when you need it based on your credit standing and finances.
When you know your AIP pre-approval amount, you are aware of the cost of the property you can purchase. This helps you better understand the budget you need for the full costs of buying your own property (downpayment, monthly mortgage, ABSD, Legal fees, Valuation report costs, property taxes, home insurance, and home maintenance).
The home loan process might be a challenge for some but with the availability of online tools, ordinary homeowners will be able to work out the sum they can afford to purchase their own property or next investment.
Start early and choose the best home packages carefully.
Always remember to receive a pre-approval, not just the pre-qualification.
[thrive_headline_focus title=”Buy regardless of the “Market Condition”” orientation=”left”]
Once you have a clear idea of your current situation, your AIP, and the “estimated” monthly mortgage (based on an online tool), you are able to create a plan around the budget you have set off with the consideration of your present and future needs.
Your decision to buy will rarely depend on market conditions because your finances and plans have been set in place.
Regardless of the situation happening around us, most of our clients are set to buy a property because the funds are ready. Plus, it could be beneficial for them to buy at this time with lower prices given that the families’ original budget for a property purchase is still untouched and that they continue to be living well (possible problems identified and options are ready to be used).
There won’t be any waiting to buy or waiting for the right time. Instead, buy because you are ready.
[thrive_headline_focus title=”Stick with the budget” orientation=”left”]
We all have these moments where we are tempted to check a more expensive home and go overboard on our budget. I am here to tell you that “wanting more” is dangerous and could ruin your finances in the future.
The loan granted to you by the bank is there for one good reason – it is based on your ability to repay the loan.
[pullquote align=”normal”]Having clarity on your current financial situation means you have created a safety net or buffer for any changes life may present to you in the future. [/pullquote]
[thrive_headline_focus title=”Consider the future” orientation=”left”]
When buying a home, we always think of it as the end of the process. We fail to see beyond the end of the transaction and ask ourselves these questions:
- Will I stay here until I retire? Will this property be manageable for me once I get older? Or should I downsize?
- Will I have children? How many bedrooms do I need? Is the space enough for us?
- If one of us will stop working, will we be able to afford to pay for the house with only one income?
So it’s best for any ordinary homeowner to come up with an exit plan as well just in case you need to find another home that will suit your family.
No need to be overwhelmed with the process of buying a property. You just need to get a good start. Be aware of what you really need to do. By then, you will be able to confidently purchase your own property.
Should you wish for us to build a property plan for you and your family, drop us an email at singaporerealestateinsider@gmail.com.
Planning keeps your family’s goals and desires attainable by preparing for the future in the present. You can always do it NOW. This will provide your family with direction, guidance, and confidence.
