[VIDEO] Buying a house: A must-have ke?
PUBLISHED 13 SEPTEMBER 2018
When should you buy a house? Are you financially ready? With proper planning, could your dream house be just around the corner? We speak to Desmond Chong Kok Fei, Financial Trainer of Agensi Kaunseling dan Pengurusan Kredit (AKPK) on what you can expect when committing to a 35-year housing loan and the potential gains of property investment.
FULL TRANSCRIPT
Hello?
Hi, I’m Jazmin. I’m 22 and well, adulting – it’s been tough. Think you can help me adult?
[INTRO MUSIC]
“EPISODE #6: HOUSE”
JAZMIN SIEH | Host
The Asian vibe in me is so strong, I’m okay with staying with my family for the rest of my life. They like me. It makes sense, too. Rumah mahal. Maybe future Jaz boleh think about that? Sorry, man.
I mean, in this economy, mampu ke?
DESMOND CHONG KOK FEI | Financial Trainer, AKPK.
When last time I stayed with my parents, I didn’t have to worry about anything.
[MUSIC]
DESMOND
Everyone is looking for the dream house, but the dream house always comes with a price tag. People always have a misconception. Is my first house going to be a condo? Go back to your own footing first. Don’t set the standard too high. It would be easier for you to upgrade from the first house to the second house. You don’t have to straight away buy your dream house.
You should have a discussion. You have to decide what kind of house you want. Is it a landed property or is it a condominium? Renting or buying depends on your own financial priorities. For example, I want to further my studies – maybe renting a house would be a better choice for you.
But let’s say I really want asset appreciation – buying a house would be better. You must see whether there is a need for you to have a house. For what purpose? It’s okay to choose based on your lifestyle. There’s no point in you buying a house when at the end you don’t like it, especially for your own stay. So go ahead for it. If you can afford, then what’s the problem?
[SAD VIOLIN MUSIC]
“Every day I wake up, I hate my house. Every night, these walls suffocate me.”
DESMOND
The thing is not the matter about the repayment itself, it’s the expenses that are going to be incurred. 10% is the normal downpayment that you have to pay, 5% is for the lawyer fees, for the stamp duty. When we buy a house, we’re never satisfied. Sometimes feng shui is not good, you want to do renovations. It’s not only the housing loan alone.
If I have my downpayment, I put my 10% in there.
“DOWNPAYMENT”
“A payment used in the context of the purchase of expensive items such as a house, whereby the payment is the initial upfront portion of the total amount due.”
DESMOND
The higher I pay, the lower the repayment I’m going to pay later. This encourages you to come up with a plan. People keep telling you – zero downpayment. But I start to worry. You would have zero commitment. When you have zero commitment, the money is not there, than you have a high chance of defaulting. If you are not ready for it, you will find that, “Oh I have to handle so many things.” Yeah, it’s not easy to be a landlord.
DESMOND
Of course there are many many things that are hidden for you, you wouldn’t see it. First of all is the maintenance. To own a house, you know lah – everything has its own lifespan. Second is maybe the security fee. Cukai pintu, cukai tanah. I wouldn’t say it’s hidden charges, I might call it fine print. It’s printed there, do you see it or not? If you don’t see it, it’s simply because, “I trust whatever the people are telling me.” But I have to keep reminding you; trust no one.
DESMOND
The only advantage that you would have now is that you are at a young age. At a young age, you can go for 35 years, so your repayment gets lower. Buying a house is a long-term commitment. 35 years is a long long-term.
You have to think about, “Okay, I want to have a house, maybe two years from now.” What do you need to do? Start doing your homework. You go and look for the houses that you want. Or call an agent, “I want to see a property.” I’d check on the renovations, I’d check all the rooms. For the Chinese, they’d want to know whether it’s east or north and all these things. The best news is you don’t need to pay for this. By the time you’re really ready, immediately all this is your information.
DESMOND
Buying a house for investment purposes, you are building a passive income. It’s actually accumulating your retirement assets. Maybe one day I really feel like tired of working anymore. My income actually I can collect from my renter. The only thing is investments carry risks. So you make a wrong choice means that your investment for your retirement money is also gone. So you always must have a plan.
I want to remind you of the non-financial factors. Are you ready for this? For a long-term commitment, 30 years? Your mother agree with it? Your spouse agree with it? Everyone happy with it? Is it part of your investment plan? Is it part of your house ownership plan?
You really have to discipline yourself for only one purpose, “I want to buy a house. I want to have a better retirement life. I want to earn money, that’s all.” So do your homework. There are no shortcuts.
[END]
CREDITS
