1. Know the difference between what you qualify for, and what you can actually afford
HDB will cap your monthly loan repayments to 30 per cent of your monthly income, as part of the Mortgage Servicing Ratio (MSR).
For private property owners though, the Total Debt Servicing Ratio (TDSR) applies instead. This caps your maximum loan repayment to 60 per cent of your monthly income, inclusive of other loans like education loans, or car loans.
2. Brace for maintenance fees, before buying a private home
Many people forget to factor in the monthly maintenance fees, but this can be quite a drain monthly on cash flow depending on the development.
The maintenance fees for a condo are based on *share value*. The bigger your home, the higher the share value; and the more you pay for maintenance.
For example, a typical maintenance cost might be $75 per share value. So a unit that is 50 sq. m. or less (around 540 sq. ft.) might have a share value of five, coming to $375 per month.
3. Study how much of the floor plan is really “liveable space”
For example, many old condos have huge unit sizes, such as 1,000+ sq. ft. two-bedders. However, a check may show that 200 sq. ft. is wasted on planter boxes, another 150 sq. ft. is wasted on a big air-con ledge, 50 sq. ft. is useless long corridors, etc.
So it may not always be more efficiently laid out despite the bigger size on paper.
4. If you’re buying a resale, visit at different hours
If you’re viewing a home at a time like 2 to 3 pm on a weekday, you’re not getting a true sense of the noise levels. Most people are at work during those hours.
It’s best to also drop by around 7 pm when the evening rush starts, and neighbours turn on the TV, start practicing the piano, talk in the corridors, etc. This will also give you a sense of how bad the traffic congestion can get, if you’re driving home.
5. For HDB flat buyers, remember that it could be longer than five years before you can sell
Remember, the MOP begins from the time of key collection, not from the time of purchase. This means you need to add the construction time to the MOP, to determine how long it is before you can sell or upgrade. Most HDB flats take around four years to be built, so a BTO flat typically means a nine-year wait before you can sell.
For the complete 10 tips before buying your first home, visit: https://stackedhomes.com/editorial/10-useful-tips-first-time-homebuyers-should-know-before-buying-in-2021/
Chapters
0:00 – Intro
0:52 – #1 – Affordable Vs. Qualifying Loan
2:07 – #2 – Consider Maintenance Fees
3:14 – #3 – How Much Liveable Space?
4:48 – #4 – Visit At Different Hours
6:10 – #5 – It May Take Longer To Sell
7:22 – Outro
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Stacked is an online editorial aimed at helping Singapore home buyers, sellers and renters make better decisions. By regularly conducting research and publishing our findings, we hope to give our readers a much better perspective on buying, selling or renting Singapore real estate.
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