Step by Step Guide For First-Time Homebuyer
This article is to teach those youngsters or people who never purchased a house before. If you are one of them and wonder what is the process, how it works and how long it will takes? Continue read on and we’ll clear your doubts!
Search for the house that suit to you
The first thing you need to do is looking for the house that suit to you, meets all of your requirements as well as current financial status. While, the requirements may vary as it is depends on whether you’re buying a house for your own stay or investment purpose. If you are struggle with deciding between which type of house that suit to you, you can read our another article: 10 type of homes in Malaysia.
Reserve the house if you decided to buy it
Should you have found the house that you wanted and you decide to buy it, you’ll then required to pay 2%~3% for booking fee to developer/property agent and they will issue a booking receipt to you and you have to keep it in well condition. Within the 14 days, you will be asked to sign the S&P Agreement (also known as SPA and Sales and Purchase Agreement). You can read our another article: What is S&P Agreement. In addition, you will have to pay the remaining amount of 7%~8% of deposit upon signing the S&P Agreement.
How much deposit that you’ll need to be paid is depends on the loan amount that you can borrow from bank. In some cases where the property valuation is lower than the property purchase price, Bank will only approve the loan of up to 90% which according to the property valuation amount. Thus, you are require to pay the balance between the loan amount and the property purchase price. Due to this circumstances, it is advisable to secure your financial flows within this 14 days because you have no idea how many loan amount that you can borrow from bank.
Getting Loan Approval
This is the process that took the longest time to get your loan application approved by bank. It is advisable to search for the bank that offer the lowest interest or has an attractive product features. But, the most importantly is you have faith in that bank.
During this process, you are require to submit the mortgage loan application form along with all the supporting documents such as photocopy of ID, EPF statements, pay slips, booking receipt and etc. to the bank. Bank will decide whether reject or approve your application by assessing your credit profile. (Know your credit history before they do, click here to read How To Check Your Credit Score?) Should the bank approved your loan application, you will have to go over to sign the Offer Letter for acceptance.
Sealing the deal
You will have to hire a lawyer to execute the Loan Agreement and S&P Agreement. In some cases, you may need to execute your Loan Agreement and S&P Agreement with different lawyers. Once the necessary agreements are signed, the lawyer will take it and stamp the agreement and perform the transfer registration at the land office registry. This is the reason why you need to pay for Legal Fees and Stamp Duty. Sometimes, the transfer registration might take up to a year to complete. While, should there is no any problems, the normal period would be 3 months or less.
Once everything is completed, bank would disburse the loan amount to the seller and you will be informed to collect the house key. And congratulations, you’re officially the homeowner and you can started to decorate the house that you like.
Lastly, here is some tips and advice for you;
- Other than house deposit, do aware for the other entry costs of house purchasing such as legal fees, stamp duty, property valuation and etc. Do read our another article: How to calculate Stamp Duty and Legal Fees
- One good news is, according to Budget 2015, should your first home purchase is RM 500k and below, you are entitled to enjoy 50% discount on the stamp duty.
- Be cautious of the valuation of property as you might bought the house at certain price that doesn’t mean the bank will value the property at the same price. Normally, bank can only offer the loans up to 90% of purchase price or property valuation. Hence, if the property valuation is lower than your property purchase price, you will need to top up the difference in cash.