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| "A home loan is the largest loan you’ll ever take in your lifetime" |
A home loan is likely to be
the largest loan you’ll ever take in your lifetime. The tenure is often several
decades and you’ll usually be borrowing a few hundred thousand Ringgit in one
go. With such a heavy commitment, it stands to reason that you should think
long and hard before applying for one.
Now we have even more important tips on things to do before you apply for
that home loan.
Decide the Utility of Ownership
versus Rental
As
a decision like this will impact your financial management for years to come,
it’s important to consider whether or not it’s the right choice to make.
Ownership of a property might not be the best course of action for you if you
value mobility, flexibility, or are thinking about relocating permanently sometime
in the future.
Take
your time to sit down with yourself (or if you’re buying a house to start a
family, sit down with your partner) and properly outline your goals, targets,
and finances to be absolutely sure that purchasing a property is really what
you want to go for.
Understand the Value of Your Property
Once
you’ve decided that buying your own property is the best move, it’s time to
study up on the property you want. Much like purchasing a car, you may want to
consider the eventual resale value of the property you’re going for. There are
plenty of factors that contribute to the value of a property, so be sure to
consider them all.
Things
like location, accessibility, future developments in the vicinity and the reputation of the developer are all criteria that you should examine closely to
ensure that the property you want won’t just be good for you right now, but
will also be a worthwhile investment for the future.
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| "The tedious task of having to go from one place to another, just to get the comparison you need for a particular product or service." |
Know Your Loan Inside Out
Now
that you’ve decided on the property, it’s time to shop around for the right
kind of home loan. You can go to different lenders and ask their representatives or a loan comparison tool such as BolehCompare to see the kind of loans that best fit your budget, capacity, and price.
Remember
that there are several different kinds of home loans out there, including
Islamic home loans where the profit rate works differently, Flexi-home loans
that link to your current account, and other variations that help you manage
your commitments differently as well.
“Time is money,” quipped Benjamin Franklin, and would you ever want your time to be wasted on something unnecessary? Case in point: the tedious task of having to go from one place to another, just to get the comparison you need for a particular product or service.
Figure Out if You Can Pay a Higher
Down Payment
The
standard 10% down payment is the typical amount to save for, but if you can
afford it, we recommend saving up a little more so you can pay a bit higher. Why do this? A larger down payment is a strong indication
that the borrower is a good enough paymaster, and this might improve your
chances of getting the loan approved.
In
addition, a higher down payment can help you save on cumulative interest charges,
which is a good move if you want to keep your commitments low.
Make Sure Your Credit Looks Good
Paying
a higher down payment isn’t the only way to help increase your chances of
getting your loan approved. You can also make sure your credit health and the credit score is up to snuff. A good credit score reflects well on your
creditworthiness in the eyes of banks and lenders, so the best first step is to
obtain your full credit report with credit scores, such as the MyCTOS Score report and CCRIS
