If you’re buying a new house or condo for the first time, make sure you have the right information! First time home buyers are in an exciting and terrifying position -- and these tips for new home owners will help smooth the process. These 10 tips for first time homebuyers will help you figure out mortgage rates, interest payments, credit scores, financial budgets, and insurance costs.
1. Apply for a mortgage loan when home prices are low. Currently the prizes of houses are quite low and expected to be lower till 3Q
3. Buy a new house when interest rates are good. While interest rates have risen from their historic lows earlier this year, they’re still are appealingly low. For Malaysia, interest rate is expected to increase slightly by middle of 2022. Remember – buying a home is one type of good debt.
4. Check your credit scores. Before starting house-hunting, check your credit report to be sure it does not show any incorrect information. You can visit any financial institutions to check your CTOS (Credit Tiff-off Services) or CCRIS. People with damaged credit might not be able to get a home loan at all. If your credit score is poor, wait a few months and work to rebuild your credit score by paying every bill on time, paying down as much debt as possible and disputing any erroneous information on the report.
5. Make sure you have enough saved up. Whether or not you’re a first time homebuyer, a down payment is essential today! Ideally, put down 20 percent of the purchase price. If not, talk to a mortgage lender about options. And, learn how to save your money!
6. Don’t stretch your financial budget too far. Standard guidelines call for keeping housing expenses below 35 percent of total income. “Breathing room” in your budget will help secure a home even if something unplanned does occur. If you are uncertain, wait to buy.
7. Know the real costs of being a first time homebuyer. The principle and interest on a mortgage payment are only the beginning of home-related costs. Other payments – the funds withdrawn to cover home insurance, legal fees and taxes – and private mortgage insurance can add a few hundres ringgit per month (or more) to a mortgage payment. A general rule of thumb is to budget 1 percent of the home’s purchase price per year for upkeep.
8. Avoid prepayment penalty on your mortgage. If the mortgage has a prepayment penalty, borrowers face hefty charges if they pay it off early. This provision also can be triggered by refinancing down the road, so if you’re a first time home buyer – be forewarned! Review the Truth in Lending disclosures that your loan officer sends you prior to signing your loan.
9. If First time home owners: Beware of some of the lowest prices offered by sellers or developers. They maybe defect or perhaps for the reason not reveal to the buyer. Invest in a home inspection (typically costing under RM200 before agreeing to purchase any home. An inspection informs buyers of any faults in the home, and helps determine the approximate cost to remedy those problems.
10. Shop around for the offer from financial institutions. Some banks may give lower interest rates but with too many financial conditions attached. For instance, one bank offer house buyer at a lower rate but will increase the the same if the debtor make late payment or default in payment.
Please BE WARNED
No comments: