Congratulations on the next milestone in your relationship! Buying a house in Singapore is a huge step forward in your new life with your partner. However, there are many concerns and considerations that could make some couples nervous.
Fret not, here’s a list of what to consider before you make this major decision!
#1: Know your budget
Knowing what you can afford begins with a simple calculation using an online affordability calculator. You can increase your budget by factoring CPF housing grants into the equation. Then, you might want to decide between a BTO and resale flat, or perhaps an EC. Bear in mind that this home will primarily be for your own stay, so pay attention to immediate needs such as amenities rather than any future sell-on value!
#2: Plan out a timeline
If you and your partner decide on a BTO, bear in mind that it can take a long time before you get a decent queue number, because BTO projects are always oversubscribed.
Moreover, there’s 3 to 5 years of construction even after you successfully ballot for one. If you need/want to live with your partner while waiting for your new home, consider rental options such as HDB’s Parenthood Provisional Housing Scheme (cheap; for those with kids) or other rental options (more costly but acceptable for mid-income earners).
If you’re buying a resale flat, you should plan a timeline for the longer term, which helps you determine the flat type you should get, based on whether you plan to have children in the future or have your parents move in with you.
Unclear goals might lead to getting more expensive flats because you could be paying for space you won’t use. This may not be financially prudent.
#3: Choose the right unit
Be it a BTO or a resale flat, choosing the right unit is crucial to the enjoyment of your home. Aside from weighing the merits of a lower or higher floor unit, also pay attention to the unit’s facing: a playground could get noisy, but not any more than facing the main road. Exposure to the searing sun in Singapore is also a key concern, so make sure the unit isn’t facing west or has adequate shielding (e.g. from trees) or superb ventilation.
It’s likely that the first-time homeowner will miss out on crucial details on home selection, so it’s best to consult a property agent!
#4: Decide on your loan
Most first-time BTO and resale buyers will automatically gravitate to the HDB Concessionary Loan for their home, which comes with a stable 2.6% per annum interest.
Before deciding to pay all or most of your monthly home loan installment with your CPF Ordinary Account savings, first understand the concept of accrued interest, because this is additional $$$ you’ll have to return to your CPF account once you sell your flat!
Although taking a bank home loan is cheaper (i.e. lower interest rate) at the moment, bear in mind that interest rates can increase. Banks are also less forgiving about late payments. Note that you can always convert a HDB Concessionary Loan to a bank loan later on, but never the other way around.
If you want the best rates/packages on your home loan, speak to a trusted mortgage broker!
#5: Find a reliable agent (if buying resale)
Sure, there have been horror stories about property agents, but most of them are legit, honest folks who can help you immensely in your property journey. If you’re looking for a resale unit, an agent can help you negotiate for a better price and spot defects or dealbreakers you could otherwise miss.
Here’s what you need to know about agent commission.
#6: Align your goals with your partner
It is crucial to discuss and communicate with your partner to align your goals for your first property purchase. Communication is key to getting things done efficiently, and to avoid conflicts down the road.
For instance, many couples disagree on whether a property is meant to be a home or an investment. Our advice is not to overcomplicate the process, and focus on what is right to live in. The fundamentals to choosing a first home, after all, is to build a family after marriage.
Aside from being the biggest purchase you’ll likely make in your lifetime, your home is where many fond and loving memories will be created for yourself and your partner in the years to come. Take your time, enjoy the process of seeking your first property and good luck!
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