Must do things if you are planning to purchase property in Malaysia

Buying a house will probably be your life’s biggest investment which can prove to be a daunting task if your plans aren’t backed by exhaustive research and thorough preparation.

Minute planning based on in-depth research at every level will go a long way in preventing you being at the receiving end of any resulting unfavorable development like buying a wrong property, loss of money or home loan rejection.

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Here are 6 things you need to ensure before you buy a house so that you achieve it without any obstacles

1. Increase your credit score

Buying a house is not something you can do within a week or a fortnight. Sometimes it can take years of planning and preparation. The first thing you need to ensure is to improve your credit score. Even if you plan to buy a house after 2-3 years, you need to start working on your credit score as soon as possible — as only if you maintain an excellent credit score, you will easily be able to get a substantial housing loan.

But how do you do that? Try your best to clear any outstanding debts on your personal loan or credit card dues. Not just that, also ensure you never miss a loan repayment deadline and avoid late repayments.

2. Decide on the type of house you want

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You may already have a vision of the type of house you want to own. Or you may be searching ideas for an ideal house. This is the time for you to decide on what type of house would fit your plan, budget, lifestyle and family’s requirements.

Each type of house would differ in price, area, utilities, and amenities. The factors you need to consider for choosing a particular house are space, security, maintenance, view, community facilities, accessibility, and freedom. All these factors are important as they will determine your lifestyle and routine once you start living in the house.

Do keep in mind the commuting distance to your work or other amenities like proximity to schools, hospitals, markets and so forth. Bottom line being, you need to take a balanced decision after carefully scrutinizing all these essential factors before you choose a particular house.

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3. Figure your budget and stick by it

This is an equally important step. Sit down and prepare a detailed budget. The first thing you need to consider is how much money you make, what are your total monthly expenses and how much are you able to save.

Based on your findings, draw a budget and start looking for a house that fits your budget and abides by it. While you may not be completely wrong to assume that in future your income will see a boost and it’ll get easier to afford your house loan installments, you should also consider that your financial responsibilities will also increase as you grow older.

Other considerations include inflation and the unanticipated events like a sickness that might cost you a lot in the future.

4. Boost your savings

This is probably the most important thing that you need to have in place, whether you plan to buy a house with or without the help of a home loan. A common misconception is that you need not save now if you plan to buy a house in the distant future. Well, we disagree. Start boosting your savings as much as you can, and as early as you can.

And how to go about that? Calculating your monthly income and costs and cutting unnecessary expenses, holding on to bonuses or monetary gifts, investing smartly are some useful tips.

And if you are considering taking a home loan, never forget that the loan provider would only fund a particular percentage of your total costs based on your credit score, and there will be many other costs like registration fees, interior decoration, car parking, etc that you’ll need to pay for which you’ll require liquid cash.

Here’s a pro tip if you are planning to take a home loan: Roughly calculate your monthly home loan installment amount and try and save at least that much every month, even if you plan to buy a house later.

5. Hire a good real estate lawyer and property agent

A lawyer would serve your best interests by providing you right legal assistance in terms of selecting a particular property or choosing a builder. You would need help in drafting sale and purchase agreements, contracts or other documents required to purchase a house.

You will also need a lawyer’s help in ensuring your chosen property or builder has every paper in order so that you need not face any legal troubles later.

Similarly, a good property agent or real estate broker is quite important in helping you find the right house and also deal with the paperwork. But choose a broker carefully, and check his track record or credentials of his firm. Also, ensure the agent’s commision justifies his/her services.

6. Check out for housing loan options

You can apply for a pre-approved housing loan where the bank will check your financial credibility, and let you know the amount they can finance. This way you can review all features of the loan such as interest rate, monthly payments and tenure beforehand, and then decide to go ahead or not.

Do not just settle for one bank. Look around and compare various housing loan offers extended by numerous banks.

You can find a variety of housing loans such as conventional home loans, flexible-home loans, and Islamic home loans. The interest rates for home loans would be either fixed or fluctuating interest rates. You can even get home loans tailored to your needs such as specific schemes for constructed houses or for houses under construction.

It’s obvious that buying a house can be an overwhelming experience if your plans are not in place. We hope these tips will help you if you’re planning to buy a house.

This article was first published in BBazaar.my.

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