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3 Things To Do Before Purchasing Your First Home Sweet Home | Everyone has 1 of this dream which to have your own house. It can be from penthouse, condo, apartment, bungalow and even terrace house. As for me as long as I have a place to shade from hot sun or rain that should be fine. Do you know that when I purchase my house that currently I’m staying , the process is not simple . The process of buying a house can be daunting as it can get a bit confusing with so many terms such as stamp duty, legal fees and so on, especially for first timer. In addition, buying a house is a huge investment that involves a lot of money. Definitely anyone do not want to take the wrong steps and to regret later on. I’m sharing tips and guide through the 3 things you need to do before purchasing your first home.
1.The cost of your house
- This is the first thing of all that you need to focus and pay more attention . Should always stay within your budget when it comes to buy your first house. Definitely, you do not want to fall into a huge debt after purchasing your first house. Do some survey upfront before purchase it especially if it’s not a new property, After you have found the right house which you can afford within the budget, do always remember to add in extra cost into the accou
- a,Stamp duty
You will also need to pay for the Buyer’s Stamp Duty (BSD). Stamp duty is calculated based on the selling price of the HDB flat. A 1% stamp duty is charged for the first $180,000, 2% for the next $180,000 and 3% for the remaining amount. Certain home buyers will need to pay the Additional Buyer’s Stamp Duty (ABSD) on top of the BSD:
|Singapore Citizen||1st property||NIL|
|3rd property and above||10%|
|Singapore Permanent Resident||1st property||5%|
|2nd property and above||10%|
Let us say if the property is bought by both Singapore Permanent Citizen and Singapore Citizen, the ABSD rate will then be higher.
b. Legal Fees
HDB lawyers are so far the cheapest choice if you are planning to buy a HDB flat, usually below $500. If you do not wish to engage with a HDB lawyer, then you will need to pay extra, approximately $1,000 to $5,000. The amount you pay will depend on the type of property and value of property that you are buying.
c. Registration fees
There will be more registration fees included in your bill beside your legal fees. If the registration fees are not included in the legal fees, do as the for the quotation as it will be easier for you later to calculate roughly how much it costs.
d. Administrative fees & home loan interest
Administration fees are incurred if you are using a bank loan. As for home loan interest, you will need to pay the interest to your engaged bank regardless of the type of loan you are taking: bank loan or HDB loan.
2. Choose the best loan
HDB loan has an interest rates of 0.1% higher than the CPF Ordinary interest rate. As of today, the CPF Ordinary interest rate is at 2.5%. That being said, the HDB loan interest rate will be 2.6% and that is considered high as compared to bank loan. If you opt for a bank loan, you will then need to choose whether to get a fixed interest rate or a floating interest rate. Fixed interest rate are usually higher than floating interest rate, but they allow a certainty of fixing the same interest rate for a few years. As for floating interest rates, they can be really low but that is greatly dependant on the fluctuation of Singaoire Interbank Offered Rate (SIBOR).
You will need to be familiar with the differences between HDB loan and bank loan before you decide which loan is the best for you and the most important thing is you are able to pay everymonth
3. The Right Location
Choosing the right location is important. You will need to really testify if the distance from your desired place to the MRT station or bus station really takes only 5 minutes as stated in the description for the property. The 5 minutes stated might only be applicable to marathon runner. The express highway that should be 10 minutes away from your HDB flat might take more than 15 minutes if the traffic is jammed. Therefore, you should always try it out yourself before deciding on the location. Moreover, you should not forget on your personal needs as well. Check for nearby education institutions if you have school children. Basic amenities available such as supermarket, hospital and so on within the vicinity is a bonus as well.
In addition, you should also check out on the future developments in your desired area. Check if there are any new facilities, infrastructure or upcoming bus or MRT stations coming up in the area. These new developments may cause inconvenience to you due to the construction, but it will definitely bring positive impact to you in terms of convenience and the value of your property in the future.
In conclusion, buying a property involves some planning. However, it should not be too difficult if you do your survey , more research and plan ahead. Most importantly, you should always be realistic and stay within your budget.