Whether you look for property online or through an estate agent, having a precise idea of your requirements will greatly assist in finding your dream home. The main criteria are:
1. The BUDGET factor
2. LOCATION of the house/property
3. TYPE of the house/property
4. The SIZE of the house/property
The BUDGET factor
Your initial budget is the amount of money you are prepared to spend to acquire your property.
Your budget should include:
- Down payment: the proportion of the purchase price not covered by financing (banks will typically lend 80-90% of the purchase price). So, you will need to prepare around 10 - 20% of the balance that is not covered by the loan.
- Legal fees: 1% for the first RM100,000, 0.5% for the next RM4,900,000
- Property stamp duty: 1% for the first RM100,000, 2% for the next RM400,000
- Loan agreement stamp duty: 0.5% of loan amount transfer
- Disbursement fees include fees for registration of charge, land search and bankruptcy search (RM300–700 in Wilayah Persekutuan and Selangor)
- Processing fee: one-time fee charged by the financial institution for loan processing (RM50-1,000)
You will also need to think about ongoing costs following acquisition of the property, such as financing costs. As a guide your monthly commitments on paying instalments for your house, car and other payments should not exceed 1/3 of your gross monthly household income. The Base Lending Rate (BLR) is currently 5.55% (most banks offer a small discount to BLR). The length of a loan can range anytime up to 45 years.
For information on mortgages, see http://www.bankinginfo.com.my/
Location of the house/property
Location is critical to your decision so get to know the area properly before buying. You may consider renting for a few months before buying in a new area. The following considerations will affect your choice of location:
- safety
- proximity and access to work
- proximity and access to schools
- amenities including shopping, leisure, religious facilities, parks
- prestige
TYPE of house/property
The main distinction is between landed and non-landed property. Landed properties include detached, semi-detached, and link houses. Non-landed include condominium units and flats. Apart from your personal preference it is worth bearing in mind that landed properties tend to appreciate more than non-landed properties while non-landed properties tend to give higher rental returns. You should also consider whether you want a basic home which you may want to renovate yourself, an already-renovated home or a new home. You will also need to consider whether you want a freehold or leasehold property. Freehold properties tend to appreciate more and are easier to sell, but if you wish to stay in your property for many years you may prefer a leasehold property as you will be getting a better house for the same money.
The Size of the house/property
Make a checklist of your requirements:
- land area
- built up area
- number of bedrooms (do you require a bedroom on the ground floor?)
- number of bathrooms
- reception rooms
- size of kitchen
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