Buying a home is the largest purchase most of us will make in our lives. Yet many folks rush to buy a property with less preparation than they would planning a holiday. This may have financially tragic results, especially in light of the measures announced by the govt. on Aug 30th 2010, which have created a large amount of doubt in the market's direction.
Follow the steps I have laid out below when acquiring a property and you will be much less likely to make a dear mistake.
Step 1 Judge whether you need to lease or buy
Buying a home is frequently an emotional call. That's fine "just make absolutely sure it's a sane one too. Truthfully ask yourself if you want to buy a home, and whether leasing could be an acceptable option.
Step 2 Figure out how much you are able to afford
First look at what amount of cash you presently have, including money and CPF. Note that based on the government's property measures, if you already have at least one loan exceptional, your minimum money outlay will increase from 5% to 10%. Next figure out how much you can borrow, taking all of your toal debts into account. You can work with a banker, or use the price calculator available on Loanguru. Most banks will only lend up to a 35-50% Debt Service Proportion (your absolute debt payments divided by your monthly revenue).
Step 3 Figure out what kind of home you need
What are your current and future desires for housing? As an example, a just married couple that purchases a studio or one bedroom might find inside a year or 2 that they want a two or three bedroom house once a baby is on the way. Would you prefer HDB or non-public property, if you can afford it? Which districts or areas do you like to live in? What are the conveniences and public transport options you want?
Step 4 Build up a list of options
You can choose to either employ a buyer's agent and/or go DIY. Look at both offline (e.g. Classifieds in the newspapers) and online (property websites) sources to get the biggest pool to choose between. Based on what you have worked out from Steps 2 and 3 above, come up with an inventory of potential projects to consider.
Step 5 Do consumer analysis and reduce down your choices
Check the current transacted prices of these projects from the URA web site. Compare costs there with surrounding projects. Compare the transacted costs with the asking prices. If you're buying for investment, glance at the market leases and rental yields. Eliminate the projects that do not look attractive.
Step 6 Go for property viewings
Based totally on this smaller list of projects arrange viewings of a minimum of a few different units in each project. It's useful to take photos and notes to help remember what you saw. Visit each project at different times of the day and night to calculate if it is loud or otherwise unpleasant. Reduce your list to your top few units and do a second viewing if required.
Step 7 Get indicative valuations and your mortgage pre-approved
Don't miss this vital step! Prior to making an offer ensure you have gotten an indicative valuation from a bank and an in-principle approval for a mortgage. You can approach the different banks yourself or employ a financial consultant to save some time. Based totally on the new measures, if you already have a superb loan your Loan To Valuation (LTV) limit has been lowered to 70% from 80%, so you'll need to cough up more cash.
Also, banks will only lend to you primarily based on the LOWER of the valuation limit or purchase price, so if you are buying above the bank's valuation you'll need to pay the difference in readies. If you're selling your current home to purchase a new one and hope to borrow at 80% LTV, you now have to present proof to qualify (in the shape of a signed purchase agreement for your present home and ratification showing that stamp duty for your existing property has been paid for by the purchaser).
Step 8 Make an offer and barter the purchase
After you get the indicative valuations and one pre-approved mortgage from the banks, you can then make an offer knowing you can borrow what you want. There have been several unlucky cases of consumers who've lost their deposits because they realized later that banks would not finance their acquisition. When negotiating the purchase price, it helps to have several options on hand so you aren't made to overpay thanks to a lack of options.
Step 9 Sign and. Exercise the Choice To Purchase
If the seller accepts your bid, often you've got to put down a 1% deposit to get the Choice To Purchase, and have 14 days to exercise it, by which time you'll have to pay another 4% of the purchase cost. Make sure you have the funds available to do so. Once you get the OTP communicate with your conveyancing counsel and mortgage banker to settle the techniques.
Step 10 Complete the sale and collect the keys
Before the completion date, do an inspection of the home to ratify that all agreed on fittings and items are still around. On the date itself, collect the keys and check that you've a complete set. Congratulations! You are the owner of a new home. Time to think about renovation and furnishing
Go through these steps when acquiring a home "it'll save you tears and money! Hope you enjoyed reading this acquiring Singapore property article!
Follow the steps I have laid out below when acquiring a property and you will be much less likely to make a dear mistake.
Step 1 Judge whether you need to lease or buy
Buying a home is frequently an emotional call. That's fine "just make absolutely sure it's a sane one too. Truthfully ask yourself if you want to buy a home, and whether leasing could be an acceptable option.
Step 2 Figure out how much you are able to afford
First look at what amount of cash you presently have, including money and CPF. Note that based on the government's property measures, if you already have at least one loan exceptional, your minimum money outlay will increase from 5% to 10%. Next figure out how much you can borrow, taking all of your toal debts into account. You can work with a banker, or use the price calculator available on Loanguru. Most banks will only lend up to a 35-50% Debt Service Proportion (your absolute debt payments divided by your monthly revenue).
Step 3 Figure out what kind of home you need
What are your current and future desires for housing? As an example, a just married couple that purchases a studio or one bedroom might find inside a year or 2 that they want a two or three bedroom house once a baby is on the way. Would you prefer HDB or non-public property, if you can afford it? Which districts or areas do you like to live in? What are the conveniences and public transport options you want?
Step 4 Build up a list of options
You can choose to either employ a buyer's agent and/or go DIY. Look at both offline (e.g. Classifieds in the newspapers) and online (property websites) sources to get the biggest pool to choose between. Based on what you have worked out from Steps 2 and 3 above, come up with an inventory of potential projects to consider.
Step 5 Do consumer analysis and reduce down your choices
Check the current transacted prices of these projects from the URA web site. Compare costs there with surrounding projects. Compare the transacted costs with the asking prices. If you're buying for investment, glance at the market leases and rental yields. Eliminate the projects that do not look attractive.
Step 6 Go for property viewings
Based totally on this smaller list of projects arrange viewings of a minimum of a few different units in each project. It's useful to take photos and notes to help remember what you saw. Visit each project at different times of the day and night to calculate if it is loud or otherwise unpleasant. Reduce your list to your top few units and do a second viewing if required.
Step 7 Get indicative valuations and your mortgage pre-approved
Don't miss this vital step! Prior to making an offer ensure you have gotten an indicative valuation from a bank and an in-principle approval for a mortgage. You can approach the different banks yourself or employ a financial consultant to save some time. Based totally on the new measures, if you already have a superb loan your Loan To Valuation (LTV) limit has been lowered to 70% from 80%, so you'll need to cough up more cash.
Also, banks will only lend to you primarily based on the LOWER of the valuation limit or purchase price, so if you are buying above the bank's valuation you'll need to pay the difference in readies. If you're selling your current home to purchase a new one and hope to borrow at 80% LTV, you now have to present proof to qualify (in the shape of a signed purchase agreement for your present home and ratification showing that stamp duty for your existing property has been paid for by the purchaser).
Step 8 Make an offer and barter the purchase
After you get the indicative valuations and one pre-approved mortgage from the banks, you can then make an offer knowing you can borrow what you want. There have been several unlucky cases of consumers who've lost their deposits because they realized later that banks would not finance their acquisition. When negotiating the purchase price, it helps to have several options on hand so you aren't made to overpay thanks to a lack of options.
Step 9 Sign and. Exercise the Choice To Purchase
If the seller accepts your bid, often you've got to put down a 1% deposit to get the Choice To Purchase, and have 14 days to exercise it, by which time you'll have to pay another 4% of the purchase cost. Make sure you have the funds available to do so. Once you get the OTP communicate with your conveyancing counsel and mortgage banker to settle the techniques.
Step 10 Complete the sale and collect the keys
Before the completion date, do an inspection of the home to ratify that all agreed on fittings and items are still around. On the date itself, collect the keys and check that you've a complete set. Congratulations! You are the owner of a new home. Time to think about renovation and furnishing
Go through these steps when acquiring a home "it'll save you tears and money! Hope you enjoyed reading this acquiring Singapore property article!
About the Author:
Propwise.sg, a top Singapore
property blog, is devoted to helping you understand the real estate market and make better calls. Visit us to read more Singapore property market articles.
No comments:
Post a Comment