{"id":23445,"date":"2016-04-14T12:25:59","date_gmt":"2016-04-14T04:25:59","guid":{"rendered":"https:\/\/www.imoney.my\/articles\/?p=23445"},"modified":"2016-05-24T12:08:42","modified_gmt":"2016-05-24T04:08:42","slug":"how-to-apply-for-mydeposit-scheme-own-your-first-home","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/how-to-apply-for-mydeposit-scheme-own-your-first-home","title":{"rendered":"How-to: Apply For MyDeposit Scheme & Own Your First Home"},"content":{"rendered":"

The median household income in Malaysia in 2014 was RM4,585 a month, and an affordable home for such a middle-income family should be at RM165,000.<\/p>\n

However, the sad truth is, houses with enough space for a family at that price point is very hard to come by. In Petaling Jaya, a 850-square-foot apartment with three bedrooms, cost about RM205,000. That\u2019s RM40,000 above the affordable price point.<\/p>\n

Housing affordability leaves the biggest impact on middle income households, not just in Malaysia, but also around the world. It is a major concern, especially in developed countries.<\/p>\n

The biggest amount in any household budget is housing, and with prices of residential properties skyrocketing in Malaysia at a much faster pace than household incomes, Malaysians are finding it increasingly difficult to own a roof over their head.<\/p>\n

The Government has implemented many initiatives to control the escalating property prices, from cooling measures to stop speculation, to financial aids to help the lower- and middle-income groups to be able to afford their first home.<\/p>\n

One of the most recent effort is the MyDeposit scheme<\/a>, which was launched by the Prime Minister Datuk Seri Najib Tun Razak earlier this month.<\/p>\n

<\/span>What is MyDeposit scheme?<\/strong><\/span><\/h2>\n

\"mydepositThe MyDeposit scheme was first announced in Budget 2016 last October. It aims to help the lower-and middle-income groups, with a household income of RM10,000 and below, to purchase their first home.<\/p>\n

This is perfect for those who are struggling to save up enough to cover the down payment of a property. For first-time property buyer, whose finances is in the pink of health, they are typically offered a 90% property loan. Hence, the shortfall of 10% is paid in cash by the buyer as down payment.<\/p>\n

Other than the 10% down payment, buyer will also have to fork out about 5% additional to cover miscellaneous costs such as legal fees and stamp duty<\/a>. It is always recommended for home buyers to have about 20% of cash to cover down payment and these miscellaneous fees.<\/p>\n

This means RM60,000 for a RM300,000 home. That\u2019s a lot of money to save up!<\/p>\n

The Government understands the difficulty faced by first-time home buyers, and hence, about RM200 million has been allocated for the MyDeposit scheme. This scheme essentially helps first-time home buyers cover the 10% of down payment, or a maximum of RM30,000, whichever is lower.<\/p>\n

If you are purchasing a RM500,000 property, you will still need to come up with RM20,000 cash on your own, on top of the RM30,000 covered by MyDeposit scheme.<\/p>\n

However, this scheme is limited to eligible home buyers looking to purchase residential properties priced at RM500,000 and below.<\/p>\n[sc:sample_banner]\n

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<\/span>What are the key\u00a0concerns?<\/span><\/h2>\n

The scheme is undoubtedly a game changer for many lower- to middle-income groups, but there are a few danger areas that applicants must be aware of.<\/p>\n

The 30-day period to sign the Sales & Purchase Agreement can be quite tight and will require applicants to follow-up closely with their lawyers to expedite the process. This also means applicants must do all the necessary property shopping and viewing prior to MyDeposit applications. The application approval process will take about two months.<\/p>\n

All negotiations of prices must be done, and the seller or developer must be informed of your intention to apply for the MyDeposit scheme.<\/p>\n

Buying a home with the\u00a0MyDeposit scheme does not mean you can buy a home cash-free. You will still need to ensure you have enough cash to pay for the legal fees and other miscellaneous costs , and also enough cash to pay for the booking fee.<\/p>\n

Before you get the lawyers to\u00a0draft the Sales & Purchase Agreement, which should be done before the approval of the\u00a0MyDeposit application, you will need to pay a 2% to 3% booking fee to the developer\/real estate agent,\u00a0so the seller would not sell the property\u00a0to anyone else.<\/p>\n

Upon receiving the approval for MyDeposit, you are required to sign the Sales & Purchase Agreement within 30 days, from the date of the approval.\u00a0Failing to sign the Sales & Purchase Agreement within the 30 days, will result in the buyer forking out the full down payment amount.<\/p>\n

This can be quite risky as all proceedings have already been kick started with the lawyers (seller and buyer). Don\u2019t forget, all the costs that you have already incurred with the booking fee, legal fees, stamp duty and other costs of buying a property.<\/p>\n

However, if you are confident that you will get the approval for the scheme, here’s how you are going to get it.<\/p>\n

<\/span>Who is eligible for the MyDeposit scheme?<\/strong><\/span><\/h2>\n

The Ministry of Urban Wellbeing, Housing and Local Government has been tasked to establish a screening process for the scheme based on the following eligibility criteria.<\/p>\n

\"mydeposit<\/a>

Image from German Embassy Colombo<\/i><\/p><\/div>\n

Applicants for MyDeposit scheme must be:<\/p>\n