My-Daybreak.org » Home Buying http://www.my-daybreak.org/main Our Country can be better Wed, 10 Feb 2010 14:26:43 +0000 en hourly 1 http://wordpress.org/?v=3.1.3 Our First Home – To Buy or To Rent http://www.my-daybreak.org/main/2009/12/30/our-first-home-to-buy-or-to-rent/ http://www.my-daybreak.org/main/2009/12/30/our-first-home-to-buy-or-to-rent/#comments Wed, 30 Dec 2009 12:41:47 +0000 Teoh KH http://www.my-daybreak.org/main/?p=291 They had return from their honeymoon and now, it’s time to make some adjustment as a family.
As money is a sensitive topic, many couples keep its discussion out of their relationship. Below are some pointers for all newlyweds to consider:

  1. Your financial plan has to move from being an individual to shared one
  2. Decide how to handle rountine bills, paying for the family and children’s well being, house hold budget, as well as saving & investment
  3. It may be wise to have at least three bank account – ” Mine”, ” yours” and ” ours”. This would enable each spouseto have some autonomy over their own finances while still able to meet common expense from their shared account.
  4. Like you individual financial plan, as a couple, you need to put a side an emergency fund.
  5. Talk about each other’s investment style, including your risk appetite and preferences. It is wise to have a common investment portfolio to meet future goals.
  6. You may need to review your insurance coverage as well , especially if you spouse isn’t working or there are children.

Form the budget (see table), Adam and Aida have a healthy surplus of Rm3,000/-per month. With this saving amount, they figured they should be able to afford a home of their own.

Adam & Aida Income & Expenses

Adam & Aida Income & Expenses

As a rule of thumb, we can allocate up to one third of our monthly take-home pay towards all our loan commitments. with a loan tenure of 30 years and an assumed avarage interest rate of 7% they should limited their home loan to not more than RM300,000. However, they should also have about Rm 30,000/- car for down payment and another Rm10,000/- more or less for other incidental costs such as stamp duties and legals fees.

There are 2 reasosns why Adam & Aida felt that buying a home is better than renting.
Firstly, they can increase their net worth over time while servicing their loan.
Secondly, Owning a home will give their family a greater sense of security.

However, buyer should do their homework! The Golden rule of any property incvestment is Location, location and Location! more Tips:

  1. Drive around the neighbourhood at different times of day and week to see what your potential neighbours are like.
  2. Check the infrastrutures in the area that can add value to the house, such as schools, shops, park/playground, public transport and business. Watch out for conditions and any future development that may make the area economically disadvantaged.
  3. Check the properties is on free hold or Leasehold land. The market value of the house on freehold land is usually higher than if it is leasehold Land.
  4. Talk to experts who can advise about the market, locations or types of properties such as apartment, condominiums or landed properties.
  5. Shop around for the best home loan package in town.

You must be able to afford to buy and pay for your house. Otherwise, your dream home will turn into a finacial nightmare !

]]> http://www.my-daybreak.org/main/2009/12/30/our-first-home-to-buy-or-to-rent/feed/ 0