Tips for House Buyer

Here's some tips for a first time house buyer in Malaysia:

1. Your Savings - Make sure you've enough money in the bank for the down payment. Don't buy a house thats too expensive for you to afford. You need to develop a financial plan so that you'll be able to save money for the down payment ( which usually cost 10% of the purchase price), but also for other causes such as credit check, morgage application and the closing.
2. Your Credit - Make sure you've a clean background. Consistent in paying your loan, limit your debt, and most importantly use your credit card responsibly. The better your credit history, the better your credit score and the higher chance of getting a bank loan. There certain things need to be aware of: Mortgage Pre-approval, down payment, Mortgage options and Closing Costs (legal fee & stamp duty).
3. What is Mortgage Pre-approval? - It is a simple calculation that tells you the amount you'll be able to finance through a loan and what your monthly payment will be. You can get this from any bank that offer a home loan. You can also ask them on details regarding house financing. They breakdown the calculation to how much you should earn month, how much you should pay monthly, and the years that you need to pay.
4. Down Payment - The money you pay up front for your new house. Usually is 10% of the purchase price. However, you can pay more, and the more you pay cash, the less you will need to pay each month on the mortgage, and the lower the interest costs will be over the life of the mortgage.
5. Mortgage - House financing options available for you before you buy your new house.
6. Closing and other additional costs - This is when ownership of the house is officially transferred from the seller to you. In most case, the developer to you. If you're interested to buy the house, you may also pay deposit for it (e.g 1-10% if purchase price), and this is called good faith deposit.
7. The Offer - When making an offer, you not only specify the price you are willing to pay but also the details of the purchase. Most importantly before making an offer you need to evaluate the property (property conditions, market conditions, seller motivation, deposit, inspection)
8. Insurance - Before they can approve your lending-arrangement and allow you to close on your new house, they will ask you to show proof of title, title insurance (a protection against loss arising from problems connected to the title to your property), and house owner's insurance.
9. The final visit - To ensure that the house has been left in the expected condition. You may ask for discount or credit at the closing to cover any missing item or last-minute to the property

And now you're one step closer to finding and buying your dream house. Happy house hunting :-)