Shelter Over The Head

Saturday, 14 May 2011

Other costs in purchasing a house / Kos tambahan pada pembelian rumah

As a general guide, majority of house buyers are required to pay a 10% deposit to purchase a house and get a loan of 90% from the bank.The 10% is to be paid when signing the Sales and Purchase Agreement.

Many first time buyers make the mistakes of under budgeting to purchase their house. There are other costs involved when you sign the Sales and Purchase Agreement : besides the 10% of the house value, you need to pay the other costs such as lawyer fee, stamp duty and disbursements for both the Sales and Purchase Agreement and Loan Documentation, mortgage and fire insurance, and valuation report.

Sometimes, the developer's representatives do not make it known, they assume the house buyers know it or have extra money to pay for it. While there are many who have more than 10% of the house value that they purchase, there are many more who have just barely enough to buy it, but still buy it for the fact that it's a shelter over the head.

It's advisable that the house buyers ask for the list of cost of purchase, direct and indirect one, from the developers' representatives who handle the house purchase and related documentation. With this data, you can plan for it. As a rule of thumb, you should set aside 5% of the house value for this part of the cost of purchase.

Thursday, 12 May 2011

Purchasing your first house / Membeli rumah pertamamu

How much loan can you get from the bank versus how much should you borrow?

Try not to over borrow or go to the maximum of the loan amount which you are qualified for. As a guide, you should not commit to a monthly housing installment where it's more than 40% of your salary / income. Once the loan is approved, every month you have to pay the installment, no ifs and buts. You cannot pay, the bank will lelong your house. You must be able to take care of the house in order for the house to take care of you.

The bank can give you 100% loan for the house, but the question is : Can you afford it?

It's advisable to still have some balance of cash for saving after the monthly commitment for emergency.

BUY WHAT YOU CAN AFFORD - this is a valid advice, be it you are buying a single storey house or a much bigger house . Don't let the house stay on your shoulder in the form of monthly installment which you struggle to pay every month ; buy one you can afford, one that can provide shelter over the head.