While the overall property market sentiment are leaning towards the pessimistic end, not all hopes are lost. There are still many undiscovered opportunities in the residential segment, especially for first-time homebuyers due to the extension of Home Ownership Campaign (HOC), provision of stamp duty & RPGT exemptions and a low interest rate environment. Homebuyers have many options to choose from, be it the primary and secondary market, or auctioned properties. However, the issues of income levels, house prices, loan eligibility and affordability are still concerns that should not be overlooked. To make the best out of this situation, we are guiding you to execute prudent planning based on your financial capabilities.
So.... How do we know that we are financially ready to buy our first house?
Don't worry, we got you covered. To be on the safe side, your monthly loan repayment should be 30% to 40% of your remaining net disposable income. Here is a simple calculation scenario for your better understanding. The calculations are based on assumptions of 70% Debt Service Ratio (DSR) and that you do not have other monthly commitments such as student loan or car loan.
Calculation:
Monthly Gross Income RM 4,500
Less:
EPF, SOSCO & PCB @ 20% of monthly gross income -RM 900
Monthly Net Income RM 3,600
Less:
Monthly living expenses @ 30% of Monthly Net Income RM 1,080
Remaining Net Disposable Income RM 2,520
Maximum amount that you can allocate for monthly loan repayment
@ 40% of Remaining Net Disposable Income RM 1,008
The reason that we advise you to cap your monthly loan commitment is to ensure that you still have funds just in case any unexpected events happen. Furthermore, there are other associated cost that you have to be aware of such as maintenance fees, quit rent and assessment fees. Most importantly, it is to reduce your chance of your loan being rejected by the bank.
Now, you might be wondering about the property price that you can afford based on the given scenario. Based on the above scenario, you can afford to purchase a property priced at RM 270,000 with 10% downpayment for loan tenure of 35 years. You can find out here based on your actual income.
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If you are interested in real estate , please feel free to get in touch with us.
Wesley Tan: +6017-688 9998
Jasone Gan: +6017-6018899
Brandon Lim: +6016-416 9193
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