Chapter 1

Know If You Are Ready

Chapter 1

In most cases it’s better to buy instead of rent, and buy as soon as you can afford to do so. However, there are a few things you need to consider before you take the plunge to become a homeowner.

By buying a home, you may be paying as much monthly as a renter, when you factor in other expenses such as taxes, insurance, maintenance, and mortgage interest, which renters don’t pay.

The real benefit from buying is that you freeze your monthly payment for a maximum period of 35 years, and then you stop paying it altogether. And of course, the house is yours.

However, home ownership is a huge commitment as you signed on to a home loan in Malaysia and you will need to sell the house before you can relieve yourself of the responsibilities of ownership, whereas renting a home, you can just give a month’s notice before you move out.

Before your start shopping for your dream home, ask yourself these questions to determine if you are truly ready to lose your property virginity.

Are you ready?

  • Can you commit to settle down in one place for at least a few years? If you move around a lot, it may not be a good idea to buy a home as the cost of buying and selling a home (i.e. lock-in penalty and Real Property Gains Tax (RPGT)) within a short period of time may cause you to lose money.
  • Have you saved up enough for the down payment and other fees and charges? You may need up to 20% of the price of the home you intend to buy.
  • Do you have a clean credit report? This will determine whether or not you get financing for your home.
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