Buying property in Singapore and Australia doesn’t have to be tricky.We’ve got all the useful tips from HSBC on how to buy a new home
Admit it: trawling through property websites and brochures can be a lot of fun, especially when there’s no commitment to actually purchase a home. It’s nice to imagine yourself sipping a latte while looking out of your bay windows towards the ocean, when in reality, today’s view is brought to you by your next-door neighbour.
If buying a home has always intimidated you, you’re not alone. After all, it’s just like having a child. It’s a huge responsibility – financially and emotionally – and you’re “stuck” with it for quite a while. To take the anxiety out of buying a home, the folks at HSBC have come up with a handy guide to help you make home ownership a dream come true. Here’s what you need to know:
Do you qualify for a loan?
Whether you’ve been eyeing a house with a yard or a renovated shophouse in Singapore or even a condo in Australia, you’ve got to know what you’re eligible for. If you’re applying for a housing loan, banks will usually check your minimum income, age, residency status, fulfilment of local property loan rules as well as the bank’s internal credit requirements.
What kind of home can you afford?
Once you’ve got all the above figured out, you’ll need to know the kind of home you can actually afford at your current income level. To find out, you’ll need to use the Total Debt Servicing Ratio (TDSR) and the Mortgage Servicing Ratio (MSR) to determine the maximum amount you can take out for a loan. Confused yet? To make your life easier, check out HSBC’s Home Loan Calculator to determine how much mortgage you can afford.
Ranojoy Dutta, Head of Retail Products, HSBC Bank (Singapore), said: “Buying a property is often the biggest and most significant purchase we make but some home buyers may be taking their passion for the perfect home too far. An industry of property magazines, TV programmes and websites is making it harder than ever before to have realistic expectations about what you can afford.”
“It is essential to begin this buying process by having an open discussion with your partner, your family or financial advisor to discuss what you can afford and what compromises you might have to make. Buying a property should be a positive experience, and with some careful planning, it can be an exciting one too.”
How much should you save for the down payment?
So you’ve found your dream pad after doing all that math. The next step? Handing over a down payment so you can finally seal the deal! If you’re buying a private home in Singapore (not HDB), you’ll need to put down at least 25 per cent of the purchase price. You’ll also need to consider legal fees, which usually start at around SGD $2000, and valuation fees that start at SGD $200.
Wondering how to make it work? Why not consider moving some assets around to free up some capital. You could also cut back whenever you can – try to keep vacays with the fam to a minimum and maybe think twice about purchasing that new car!
Should I consider investing in property?
When you’ve got kids, you need to think long term. Think about what makes sense for your family’s future. Before you think of investing into an overseas property, do ensure you have the financial means to commit over the mid to long term and that it aligns to your investment goals.
According to HSBC’s Beyond the Bricks research, 66 percent of respondents agreed that property is the best type of investment, while 30 percent agreed that it is a great financial opportunity to invest in property overseas, such as Australia.
If you’re thinking about investing in property in Australia, here’s a quick guide to make it easier for you.
Ask your property agent the right questions
E.g. How much did the property sell for the last time, are they any strata levies and pending levies, and whether there are any approved alteration plans for the property
Determine your budget
Up to 70% of the value of property can be borrowed and you will need a deposit of at least 10% of the purchase price. Also look out for other costs such as valuation fees, conveyancing fees and stamp duty.
Get the right financing solution
Speak to the friendly HSBC Mortgage Specialists who will give you advice on the application process and recommend a financing solution based on your needs.
So what’s next?
Buying a home doesn’t have to be so complicated. Plan well and you’ll be able to make that down payment sooner than you think! Trust us, nothing beats the feeling of coming home to a place you can truly call your own.
Ready to make your foray into real estate? With HSBC, you can choose from a range of home loans to turn your dream of buying your own home into a reality. Or if you’re looking to diversify your portfolio by investing in property in Australia, check out HSBC’s International Mortgage.
This post is sponsored by HSBC