Buying Your Dream House

So, you decided to buy a house. Good move, but there are a lot of factors you need to consider before deciding on what type of house to buy. Here are some suggestions that you may want to consider to ensure your house-buying experience is a smooth one.

Everybody has his or her own idea of a dream house but rule number one is to buy a house within your means. This is to avoid you from ending up in a difficult financial situation. It is advisable for you to come up with a budget based on the amount you can fork out to pay for the down payment and the amount you are willing to commit for your monthly loan payment. Factor in the amount you can withdraw from your EPF savings for this purpose. You also should know that a year after the first withdrawal, you are allowed to withdraw from your Account II EPF savings to reduce your housing loan on yearly basis.

You may want to note that apart from the down payment, you will also need to pay legal and stamping fees for your Sales and Purchase (S&P) as well as Housing Loan Agreements. These dues can be troublesome if you do not set aside enough money for them.

Once you have decided on the budget, you can start looking around for a suitable house. Remember, location of the house is another important factor. If you plan to stay in the house for a considerable length of time, then get a house in a location that you would feel comfortable to live at. But if you are buying the house for “investment” purposes, then a location where property values can appreciate rapidly is, perhaps, more appropriate.

You also have the option to either buy a new house from a developer or buy a completed one from its owner.

Perhaps, buying a brand new house is more desirable for most as the price is most likely at the lowest but you may have to wait for up to two years for the construction to complete. In the meantime, you would have to keep up with your monthly rent as well as service the interest on your loan periodically until the full loan is released (upon completion of the new house). Buying a completed house on the other hand, has less “waiting” time but you may have to set aside some money to carry out some repairs or renovation works.

Please take note that you cannot use your EPF savings to pay for repair and renovation works.

Then again, you may not find the house you like that fits your budget. You may decide to defer your purchase so that you can save more money (on your own and through EPF). It is up to you but you must also consider that prices of houses will also increase.

Alternatively, you may also lower your “expectation” and settle only for a house that you can afford now. It will not be so bad at all. You can sell the house later and use the proceeds to buy your dream house. You may be happy to note that EPF does allow members to make withdrawal to buy a second house, provided that you have sold the first house.