Tips for First-time Home Buyers

Tips for First-time Home Buyers
Home Buyers in Singapore

Tips for First-time Home Buyers

Buying a home can be nerve-racking, especially if you’re a first-time homebuyer. But worry not when you have our tips handy. These tips will help you navigate the process, save money and avoid common mistakes. Let us now look at the tips and not beat around the bush.

Home Buyers in Singapore

Explore Your Options for Home Buyers

There are lots of mortgage options out there, each with its own combination of pros and cons.

Making a higher down payment will mean having a lower monthly mortgage payment. If you want the smallest mortgage payment possible, opt for a 30-year fixed mortgage. But if you can afford larger monthly payments, you can get a lower interest rate with a 20-year or 15-year fixed loan. Use this calculator to determine whether a 15-year or 30-year fixed mortgage is a better fit for you. Or you may prefer an adjustable-rate mortgage, which is riskier but guarantees a low-interest rate for the first few years of your mortgage.

Consider Other Costs

Apart from your monthly mortgage payments, there are other costs when buying a home. These include:

  • Survey costs
  • Solicitor’s fee
  • Removal costs
  • Buildings insurance
  • Initial furnishing and decorating costs
  • Mortgage arrangement and valuation fees; and
  • Stamp duty

As a first-time homebuyer, the most important thing to bear in mind is whether you can really afford to take this step. It’s wise to put together a budget before you start looking for a property. Make sure you include everything in the budget and see if you can really buy a house in Singapore.

Check Your Credit and Pause Any New Activity

When applying for a mortgage loan, your credit will be one of the key factors in whether you’re approved, and it will help determine your interest rate and possibly the loan terms. So check your credit before you begin the homebuying process. Dispute any errors that could be dragging down your credit score and look for opportunities to improve your credit, such as making a dent in any outstanding debts. To keep your score from dipping after you apply for a mortgage, avoid opening any new credit accounts, like a credit card or auto loan, until your home loan closes.

Pick the Right Type of House and Neighborhood

You may assume you’ll buy a single-family home, and that could be ideal if you want a big yard or a lot of room. But if you’re willing to sacrifice space for less maintenance and extra amenities, and you don’t mind paying a homeowners association fee, a condo or townhouse could be a better fit. But even if the home is right, the neighborhood could be all wrong. So be sure to:

  • Research nearby schools, even if you don’t have kids, since they affect home value.
  • Look at local safety and crime statistics.
  • Map the nearest hospital, pharmacy, grocery store and other amenities you’ll use.
  • Drive through the neighborhood on various days and at different times to check out traffic, noise and activity levels.

Stick to Your Budget

Look at properties that cost less than the amount you were approved for. Although you can technically afford your pre-approval amount, it’s the ceiling, and it doesn’t account for other monthly expenses or problems like a broken dishwasher that arise during homeownership, especially right after you buy. Shopping with a firm budget in mind will also help when it comes time to make an offer. In a competitive real estate market with limited inventory, it’s likely you’ll bid on houses that get multiple offers. When you find a home you love, it’s tempting to make a high-priced offer that’s sure to win. But don’t let your emotions take over. Shopping below your pre-approval amount creates some wiggle room for bidding. Stick to your budget to avoid a mortgage payment you can’t afford.

Make the Most of Open Houses

When you’re touring homes during open houses, pay close attention to the home’s overall condition, and be aware of any smells, stains or items in disrepair. Ask a lot of questions about the home, such as when it was built, when items were last replaced and how old key systems like the air conditioning and the heating are. If other potential buyers are viewing the home at the same time as you, don’t hesitate to schedule a second or third visit to get a closer look and ask questions privately

Buy a Home Insurance Policy

Before you close on your new house, your lender will require you to buy homeowners’ insurance. Shop around and compare insurance rates to find the best price. Look closely at what’s covered in the policies; going with a less-expensive policy usually means fewer protections and more out-of-pocket expenses if you file a claim. Also, flood damage isn’t covered by homeowners’ insurance, so if your new home is in a flood-prone area, you may need to buy separate flood insurance.

Your first home in Singapore is a big purchase maybe even the biggest one you’ll have ever made up to this point in your life! So make sure you are mindful of things and take the right steps only.

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