‘I really want to buy a house,’ you think.
‘Like, really really want to.’
‘But there’s also a lot of things I want to buy…’
‘What to do? I’m a first-time home-buyer, too. What does research say?’
Hmm. Well, seems like most of us don’t take out a bunch of new debt (why do we want so much debt, anyway?”. But some of us do ignore our bills (oof) when applying for a mortgage. Probably should use a calendar for reminders, seeing as our phones have them and we take them everywhere we go.
A bunch of other factors play a part too, they’re just… little factors combined to make a huge problem. Like cafe-hopping, food-hunting, daily cup of coffee or bubble tea runs.
You get the point.
What can you do, you wonder. Don’t worry, there’s quite a few ways to help with that. Here are 5 Things To Avoid Doing If You’re Trying to Buy a House Sometime Soon.
1. No last-minute! Or 5-more minutes then I only budget lah. (No pls)
It’s never too early to budget! It’s not knowing about how much money the bank will give you (you don’t want to have so much debt), it’s about how you can plan to afford the house without debt or getting into debt.
Basically, getting a house without getting into a relationship with debt lah.
If you have a huge financial plan (if you haven’t, make one). you gotta know where home-ownership is gonna fit into that plan. Cause buying a house doesn’t just mean owning a house. You have rooms to maintain, furniture to buy or repair, plumbing and electricity to consider and so on.
Getting a house is basically a long-term commitment.
You should get your paperwork in order as well, like bank statements and tax returns. If you do this ahead of time, it’ll help a lot. And keep your home-related papers together.
2. Daily coffee run? What daily coffee run?
So this might be an undying crime or betrayal of your beloved to you. But sadly, these daily coffee runs are worth quite a bit of money. A cup of latte at a cafe or Starbucks cost about RM12, so imagine if you have a cup of latte 365 days per year. That equals to RM4380… You’re basically spending RM4380 on cups of latte per year.
That’s a lot of money.
Remember, there’s more to just buying a house. You have bills and utilities to consider. Not to mention other things like car maintenance and all if you have one.
You also have moving costs and furnishing to consider.
3. Credit score is Very, Very Important. Like VIP-important. Don’t make it bad 🙁
Never take credit scores for granted. Once they go bad, you go into the blacklist bag. Seriously. Banks, lenders and businesses generally take credit scores seriously. Especially for house loans and mortgages. If you have a bad credit score, you should look into improving it before getting a home – it’ll help in getting a lower interest rate. Check your credit score, make a plan if needed, and go improve it. You can do it!
You can raise it by staying on top of payments, apply and open new credit accounts only if needed and take advantage of score-boosting programs.
A great (above average) credit score would be 718-850. 651-717 is fair. But if you have a credit score of 650 and below, it’ll be really difficult to get credit from banks.
4. Don’t spend more than the value of the home
If the house is worth RM350,000, don’t end up spending RM500,000 for it. It’s just wasting an additional RM150,000, and money doesn’t grow on trees.
It’s understandable that sometimes the market becomes hot, and it becomes a bidding war festival. And many interested buyers end up overextending themselves, spending beyond their budgeted amount for the place.
Don’t be one of them.
If there’s multiple offers involved, it’s common to see the sale price pushed up above the actual value. But it pays to be careful, cause you don’t want to be stuck putting up like almost double the money you budgeted. You might have to lose out on a home, but it pays off in the long-while in terms of finances.
5. Don’t make large deposits or cash deposits.
Banks tend to be a little bit uncomfortable when large amounts of money starts coming through your bank account. They usually prefer you having the money for down payment in the account for about 2 months to show financial stability.
They call this period a “seasoning” period, as it demonstrates your ability to cover loan payments and bills. If you start doing unusual stuff or making huge deposits before buying the place, the lender might get cold feet and back out.
The bank might even be suspicious, wondering where the money is coming from.
So do be careful about making large deposits before buying a house 🙂
If you’re looking at just renting for now as buying seems intimidating, you can check out our listings here at our main site by clicking the button below.