Best Place To Get Mortgage For First Time Home Buyers

Best Place To Get Mortgage For First Time Home Buyers – For many Singaporeans, moving out and buying their first home is a major milestone, often accompanied by getting married or turning 35 and wanting their own space.

But between the excitement of browsing for interior design ideas and listening to feng shui advice from well-meaning relatives, it’s important to carefully consider the money involved in buying a home.

Best Place To Get Mortgage For First Time Home Buyers

Since your new home is the most expensive purchase of your life so far, budgeting can be difficult. But in this exciting new chapter of life, the last thing you want is to be caught off guard by an unexpected expense.

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In this article, we calculate the potential costs of buying your first home so you can be prepared for the likely costs.

It goes without saying that the cost of your home will depend greatly on the type of property. Depending on whether it is a BTO HDB, resale HDB, executive condominium, private condominium or landed house, the price of your home could range from S$300,000 to S$3 million.

Other factors that influence house prices include location, amenities, remaining taxes, and most importantly, the availability of housing benefit.

If you don’t know what types of properties you can buy, use the MyHome planning tool to calculate your maximum loan amount and set a suitable budget. You can check the eligibility status of different types of HDBs.

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Once you’ve decided on a property type and price range, it’s time to start thinking about the actual money. This depends on a few factors:

All of these factors are interrelated, but a good way to think about it is to consider the immediate costs (down payment, depending on your home loan) and future costs (monthly payments and loan term).

The deposit is usually paid at the time of formal purchase. Depending on the home purchase process (which varies by accommodation type), the deposit is payable approximately 1 to 4 months after exercising the purchase option.

Yes, the same goes for BTO HDBs and under-construction condos – the down payment must be made before your home is built.

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The minimum down payment can vary significantly depending on whether you choose an HDB loan or a bank loan. First, the down payment is 20% for HDB loans and 25% for bank loans. Additionally, there are differences based on whether you can pay with cash or CPF.

If you’ve got your eye on a property and know its price, you can use the MyHome planning tool to quickly determine the down payment you’ll need for your dream home.

Or, if you’ve saved some money for a down payment but haven’t chosen a home yet, you can use it to get an idea of ​​the price range of properties you should consider.

Of course, the other part of the home loan equation is the mortgage, which will impact your life (in some cases, for decades!).

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Unlike the minimum down payment, which is fairly simple to calculate, the monthly mortgage payment is a more complex issue. This largely depends on the loan amount and loan term you choose.

For example, a couple buying an HDB apartment worth S$500,000 and opting for a 25-year bank loan can expect monthly payments of S$1,572 to S$1,683. (If they are Singaporeans, this amount may come from their CPF Ordinary Account, regardless of ownership.)

If they decide to shorten the loan term to 15 years, the monthly payment will increase from $2,396 to $2,501. This would leave them “impoverished” (monetarily) by nearly $1,000 per month, leaving you short of cash for emergencies or unexpected expenses.

Pro Tip: Save the most money by getting the longest loan term possible. Even if you want to “pay off” the loan quickly, partial payments will save you more money than a short-term loan.

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Keep in mind that the government has rules called the Mortgage Servicing Ratio (MSR) and Total Debt Servicing Ratio (TDSR) to prevent borrowers from making more monthly payments than they can actually afford.

This all sounds very complicated, but you can take the guesswork out of it with the MyHome planning tool. The tool calculates your monthly repayments based on your loan type, loan term, MSR, and TDSR.

You’ve accounted for your down payment and regular monthly loan payments – that’s a good first step! But don’t forget that you have a life besides buying a house.

For soon-to-be-married couples, buying their first home needs to be combined with other expensive activities: a wedding, a honeymoon, or even planning to have a baby.

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Don’t forget that once you get the keys, you’ll have to renovate the house, furnish it, and invest in electronics and appliances.

For the first time in your life, you have utility bills, groceries, home maintenance, storage fees, property taxes, homeowners insurance, fire insurance…the list goes on.

Remember, these fees are not included in your mortgage. So during the first few years of moving into your new home, you can expect:

Check out MyHome to do the math and find a home that fits your budget and preferences. The best part: It eliminates the guesswork.

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, so you can determine how much you can borrow for your home, giving you an accurate idea of ​​your budget. By Erik J. Martin Erik J. MartinArrow Personal Finance Right Contributor Erik J. Martin is a Chicago-area freelance writer/editor whose articles have appeared in AARP Magazine, Reader’s Digest, Costco Connection, and The Motley Fool . and other publications. He frequently writes on topics including real estate, business, technology, healthcare, insurance, and entertainment. Eric J. Martin

By Suzanne De Vita Suzanne De VitaArrow Right Senior Editor Home Loans Suzanne De Vita is a senior editor on the Home Loans team, focusing on home loan and real estate topics for home buyers, homeowners, investors and renters. Connect with Suzanne De Vita on LinkedIn Connect with Suzanne De Vita via email Suzanne De Vita

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