Home Guides Buying Determine Your Requirements

Determine Your Requirements

Determine Your Requirements

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. Budget
2. Location
3. Type of Property
4. Property Size

Budget

Your initial budget is the amount of money you are prepared to spend to acquire your property.

Your budget should include:

1. Down payment: the proportion of the purchase price not covered by financing (banks will typically lend 80-90% of the purchase price)
2. Legal fees: 1% for the first RM100,000, 0.5% for the next RM4,900,000
3. Property stamp duty: 1% for the first RM100,000, 2% for the next RM400,000
4. Loan agreement stamp duty: 0.5% of loan amount transfer
5. Disbursement fees include fees for registration of charge, land search and bankruptcy search (RM300–700 in Wilayah Persekutuan and Selangor)
6. 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 www.bankinginfo.com.my

Location

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:

1. proximity and access to work
2. proximity and access to schools
3. amenities including shopping, leisure, religious facilities, parks
4. safety
5. prestige

Type of 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.

Property Size

Make a checklist of your requirements:

1. land area
2. built up area
3. number of bedrooms (do you require a bedroom on the ground floor?)
4. number of bathrooms
5. reception rooms
6. size of kitchen