We’ve entered a time when more single people (women more so than men!) are buying homes than ever before. Gone are the days of the strict step-by-step: 1) fall in love 2) get married 3) buy a house.
Buying a house while single is an amazing, empowering thing to do but it’s also a huge commitment, and it’s not easy at all. As a single person, it’s tougher to get a loan with a good interest rate, tougher to save enough money for that 10% deposit and just generally more difficult to deal with the emotional toll that the purchasing process may take.
However, if you’re dead set on buying your first house without a partner, regardless of the hardships, here are 5 tips to help ease the process.
Get Your Finances in Order
As the famous quote goes: “A goal without a plan is just a wish.” Wanting to buy a house is no simple matter. This is probably the most expensive thing you’ll ever spend your money on and you need to prepare for that. First and foremost, make sure you’re being realistic. How much can you afford to spend on a property? Will you still have enough money left over to save for retirement? To keep in an emergency fund? To pay your other debts? Is your credit health good enough to even get a loan?
The best way to prepare yourself financially for a house is to stay atop of your pre-existing loans. Get rid of that student loan debt, pay all your bills on time and don’t open up new credit cards. While all of this might slow down the progress of your savings somewhat, it’ll prove to lenders that you’re a responsible individual who knows how to manage their finances. This is beneficial to you because you will likely be able to get a better interest rate on your loan.
Set Up Your Budget
If you’ve never been good at budgeting, that has to change now. Like I said, it takes great planning to get to where you want to be — in both your financials and life in general — so take the time to create a budget for yourself and stick to it. This should be after you’ve decided on the price range of your future home and you’ve familiarised yourself with all the expenses included in buying a house. Ideally, your budget allows you to save up enough funds to cover those expenses, the property’s deposit, as well as extra cash you may need to repair any damages or renovations on the house.
But what if you need a little assistance? The Malaysian government has several programs in play to make housing more affordable, especially for the first-time home buyers. One such program is the My First Home Scheme. Read our FAQ about the scheme and do some further research to determine whether or not you’re eligible for the program; it’s best to save where you can – every little bit counts!
Have a Confidant
Sure, you’re taking this huge step by yourself; you’re a strong, independent person who don’t need no man/woman. But you don’t have to go through this completely alone. Second opinions are great especially when it comes to house-hunting and shopping for financing. It can be too overwhelming to decide on everything by yourself and that could lead to decisions based on emotions rather than reason. Ask someone you trust (parent, sibling, friend) and who has your best interests at heart to accompany you when you look at houses, compare banks and just let them be your critically thinking cheerleader.
Be Picky with Your Banks
When you apply for a housing loan by yourself, it’s more likely that a bank or lender will charge you a higher interest rate simply because they want to ensure they don’t lose money by lending to a single income household — this is especially true if you’re a woman. You, then, have to make sure you negotiate fiercely for a good interest rate (every percentage point matters). This is where it’s extremely important to do your research so that you don’t go in blind and get ripped off. It’s also where you’ll reap the benefits of taking care of your debts and credit health.
Take note, though: many financial experts warn against borrowing as much as a lender is willing to give. Even if your monthly repayment amount would be less than a third of your income, you should give yourself more wiggle room as there are other expenses related to home ownership that you must take into account like home insurance, home loan insurance and property taxes.
This is particularly applicable if you’re buying property direct from a developer. Many offer special rates and discounts, such as early bird prices, discounts and rebates. Keep all of these in mind when picking out the properties you’re interested in and grab every available discount you can. Also ask for warranties if they aren’t already guaranteed. When buying a house alone, you can’t afford to miss out on the chance to save wherever you can.
Most importantly — don’t rush. Take your time. There’s no right way to live life, after all, no deadline for when milestones need to be reached. Purchasing a house is daunting enough for those who do it with a partner, let alone those who do it by themselves, so think very carefully. If you’re absolutely certain this is the right time for this massive financial step, go ahead and shop for your ideal home on NuProp! Or else go check out more home-buying and finance guides on our blog to help you with your research.
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