Since early of 2019, we have several government initiatives running on housing, such as loan agreement & property agreement stamp duty waivers. These initiatives are run in order to increase first time home ownership among Malaysians.
If you are thinking to buy properties, there are few markets where you can get your property from.
- Developer Project
- Subsales (second hand)
This article focuses on purchase of sub sale property.
“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.” – Lao Tze
If you want to buy a sub sale property, you need know yourself and the property well.
- Set a target (types of property: high rise or landed)
- Purpose of purchase (for own stay or investment)
- If it is for investment, is it for rental income/ to flip for profit?
- What’s your target range of property?
- How much loan can you take up?
- How much do you need to prepare for property purchase?
How much do you need to prepare for property purchase? Is your pocket ready for property purchase?
Normally, you will require lesser capital for developers new project as rebates are provided.
Let’s calculate how much you need for sub sale property instead, because if you have enough money for sub sale property, indirectly you are ready for new project purchase too.
For a property of RM400k, you would need close to RM70k capital in hand.
With government initiatives on S&P and Loan Stamp duty waiver up to RM300k effective 1st July 2019 – 31st Dec 2020, you will be able to save up to RM6500!
Let’s assume that you have 70k ready to buy a RM400k house. Next thing, you need to know if you are eligible to take 90% of RM400k.
How much can you take loan depends on DSR (Debt service ratio).
Normally, bank takes 70% DSR.
Now let’s examine how much is monthly installment for property RM 400k @ 90% loan.
The monthly installment is RM 1867.
Since the DSR calculation above shown that maximum that you can afford is RM2200, but the monthly payment from loan calculator is only RM1867, you are all good!
Now you have both capital & ability to loan based on DSR, lets go out and hunt for your dream house! Remember to take advantage on stamp duty waivers!