Views From First Time Homebuyers On Their First Purchases
A Positive outlook for home ownership among the young adults
Buying a first home resembles a scenario of falling in love for the first time with your spouse. There must be some chemistry in the relationship which sparks the love and emotional senses to a couple. Well the same can be happening to the first-time homebuyers too! Falling in love with the perfect home which you first set your eyes on can initiate the senses to plan and save sufficiently to meet up the expectations that have been bottled up in your heart. In Budget 2011, the Malaysian government has announced a new initiative, ‘My First Home Scheme’, to attract young adults who were earning about RM5,000 per month or less to obtain financing from banks to purchase their first home.
Chur Associates managing partner Chris Tan said the homebuyers should prepare their mindsets prior to planning the purchase of their first homes. Buyers needed to be realistic, and subsequently get something that works based on their current station of life. “In fact, it is not going to be your dream home straight away; you are supposed to make it your dream home along the way; best to buy within your means, rent first if you cannot buy yet,” said Chris Tan.
Nevertheless, Chris said it is a ‘Buyers’ market’ in both the primary and secondary markets. It’s a great time to look for great values with more realistic asking price. Sellers are more willing and accommodating to innovative suggestions in transacting. Banks in the pursuit of more businesses will also look at ways to overcome the tight lending policies. Maximum tenure from the banks would be 35 years, or until such a time when one reaches the age of 65 years.
There are a few factors which can determine the eligibility of loans from the banks, shared by Loanstreet, such as your debt servicing ratio (DSR), risk profile, value of the property, the maximum loan-to-value (LTV) ratio, or margin of finance that you can access, age, the number of dependants, the nature of work, past records like CCRIS or CTOS, which may dampen or liven up the chances.
PLAN THE FINANCES CAREFULLY
Chris added, it is safer to plan the financial strengths and stabilities conservatively before committing for a purchase. There are a lot of hidden costs for a home purchase. An interested buyer need to stress test the financial standings for a period of non-income generation. “If you are buying Strata Property, there are also financial commitments to pay the monthly service charge, monthly sinking fund over the monthly repayment to the banks,” Chris reiterated.
MCM Homes Sdn Bhd property marketing manager, Faye Go Yen Fei elaborated on her first experience as a buyer. “This was my first time buying a property, of course I felt very nervous but happy. Property is something so big and expensive. I was so surprised that I can own a property because I have never thought that I could own one before I am 30 years old,” exclaimed Faye. She realised that she needed a considerable amount of money to purchase a property. So, she decided to change her job. After a year working in her current company, Faye was confident and satisfied with her income which prompted her decision to purchase.
Faye shared, “I am a property advisor and I always look out and research for potential projects in the market. I even recommended my friends to buy if I found a good deal. I believed that buying property is one of the most rewarding investment.” She said her first house was purchased for her own occupancy as she was renting elsewhere then. “As I own a house now, I feel better to utilise the rental money to pay off my monthly home loan instalment. It is always good choice to own a house,” said Faye.
SAVE FOR DOWN PAYMENT
Louis Ng, who is currently attached to HSBC Bank and handles corporate events, said “Purchasing my first property, a condominium, was like making the most important decision in my life. I felt excited but was also bothered with a lot of uncertainty in property investment. However, I convinced myself to go for this commitment as my first step if I want my life to get into better milestone”
He saved for two years from daily expenses and did part time work to earn extra income and managed to save RM20,000. He had strict control over his expenditures and forced himself to save between RM1,000 to RM1,500 per month, besides saving from travel allowances, bonuses, incentives, and taking up part time jobs too.
Many of his colleagues and friends owned a property and even sold them to make a profit. Fortunately, he had a chance to purchase a condominium at a property fair, which he realised would enjoy a higher appreciation in value. He believes that fixed assets investments were safer than investing in foreign currency or gold. Depending on condition, Louis said he would opt for either own occupancy or investment purposes.
As for attorney, Jason Chan from Winson & Tan Advocates and Solicitors, who bought his first property, a condominium at Bandar Tun Razak, said it was a tough ride due to lack of experience in the primary or resale market, especially due to the uncertainty in property market now. As the housing loan may last for up to 20 – 30 years, it should be well-planned, otherwise instalment payment can be a lifetime financial burden instead.
“I know sufficient funds were needed, only after working hard for another year, I managed to save enough and bought a property,” said Jason. He affirmed that the sense of responsibility ensued him, and as such he no longer wasted money since he realised that to own a property is somewhat a burden which he needs to bear positively. Jason planned to use the property for own occupancy so that he does not need to rent elsewhere.
BETTER BUY THAN RENT
TA Properties Sdn Bhd’s assistant project manager, Saiful Tajudin said his first feeling was surreal. “We never thought that we could actually buy a property as soon as we got back from UK. I got to settle down with a new job in KL, and immediately I was looking for my first property. I was worried about the selling price which had been escalating speedily. The idea of my wife and I to raise our family in our own home was exciting,” said Saiful.
He explained that the seed money for their double-storey link house came from his investment in few financing packages, such as unit trust and dividends. Hence, he applied for loans to finance their upfront money to roll the cash while waiting for the year-end dividend. That amount was calculated to cover the booking fee and a portion of the 10% down payment.
“I guess at that time, my wife and I just got back from the UK after completing our studies, it was the only right thing to do at that time as our family was expanding. We were a family of three going on four. So, we found a property that was close to amenities, easily accessible from multiple highways, reasonably spacious, most importantly within our financial capacity,” opined Saiful.
As he was previously renting, he would like to have an own property that he could decorate and make it feel more like home. The other option back then was to continue renting while taking more time to look around. That would have given him more options in term of location and size. However, he decided against it and bought the current home, because it’s always better to own a property as early as possible.
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