Purchase of a home has become a hot topic among the younger generation these days because many regard this as impossible and cannot be done due to the current economic climate. Never make excuses before we even try our best. The proof is, the writer, yours truly, has successfully purchased her first home at the age of 24 years old with a salary of below RM 3 thousand in 2018. Want to know how? Continue reading this article!
1. Set home purchasing goals
A clear goal on purchase of property is very crucial to ensure that you have taken the correct steps to achieve your goals. List your goals, and the steps that will take to achieve that goal. Your goal must be clear for the purchase of the said property, whether it is for investment or residence. What is important in your goal is the evaluation in terms of your financial capability. For example, with a salary of below RM 3 thousand, qualification checks with banks must be performed to identify the amount of repayment that can be done with your financial capability. This qualification check is very important to be performed to ensure that you are really qualified and are able to undertake the commitment of repaying monthly installments to the bank. Do you already have a goal? Read the next step!
2. Plan your expenses
Monthly expenses must be planned well. When you have a clear goal, you must be wise enough to differentiate what is a need and what is a want. In terms of expenses, there are three main aspects that often take a large chunk of our salary, which is food expenses, shelter and entertainment. We will share a few tips on how you can save in this aspect but still have fun in planning your expenses!
Food
Food is a necessity in terms of expenses but try to limit your food expenses by cooking at home or try to set your daily food expenses goals. Try to set daily minimum expenses and if you are successful in achieving this goal, give yourself a reward at the end of the month with your favourite food!
Shelter
Try look for a place to live that is near to the place you work. By renting a house that is near your workplace, you can save money on transportation costs. As an example, the distance of the writer’s workplace is only 10 minutes from her residence and the writer only walks to the workplace every day! This is not only beneficial to health, but it also saves costs indirectly!
Tips for those who have to travel to and from the workplace due to limitations in residence, we suggest that you try alternatives of public transportation if available, and if there is a problem in taking public transport, try carpooling or sharing a vehicle with your workmates. Not only the expenses can be shared among colleagues, traffic congestion can also be reduced!
Entertainment
After a day’s work, many among us will spend a certain amount of money to reward ourselves. The writer also allocates a small amount of her salary to provide herself some entertainment but BEWARE, many of us can be too carried away when the salary is first received by spending uncontrollably on entertainment, but ultimately have to be spent prudently to survive until the month is out! ALWAYS BE CAREFUL!
Extra tips for you all, always keep abreast with the promotions offered by various companies. For example, price discount promotions on cheap cinema tickets and others. While entertaining yourself, you can save further for your home purchase!
3. Obtaining a loan from the bank
The process of obtaining a loan from the bank is a complicated process but it can be made easier if you know the right way in easing the bank in approving your loan. The following are three things that you can practice in the process of applying for your home loan!
Perform studies and comparisons of housing loans between different banks
Studies and comparisons of loans between a few different banks are very important because each bank has their own terms and conditions. Compare the loan in terms of interest rates charged, repayment period and the margin of home loan offered. Send your application to various banks and if there are any offers from multiple banks, choose the best loan! Don’t worry if your application is turned down by some banks because you still have a chance to apply from other banks!
Having debt record is important
If you have never had any records of debt with any banks, do not be surprised if the bank turns down your loan application. This can be a huge problem in the approval of application because the bank does not have any proof that you are indeed a very good paymaster. Remember, not all debts are bad.
Good financial records (CCRIS and CTOS)
The bank will evaluate your application based on good financial records. This financial record will be evaluated to see your capability in servicing your loan’s monthly installment commitment to them. Your good financial record will give a good impression to the bank and it will ease the process of your housing loan approval. Are you worried because your CCRIS record is negative or blacklisted? Fret not, you still have ways to clean your negative CCRIS records!
4. Always enhance your knowledge about finance and property
The most important thing is you are always enhancing your knowledge in the field of finance and property. There are many personal finance blog, e.g. Direct Lending’s blog, that you can read to enhance your knowledge in finance and property for free. For example, loans are always misconstrued as bad loans, but using loan facilities can help you build your assets, like buying a house. What is important is that you understand what is the loan facility chosen and plan in detail so that it is suitable for your financial capability!
In summary, there are many ways and efforts that can be taken for you to achieve your home purchasing goals although you may have a salary of below RM 3 thousand and it is NOT IMPOSSIBLE. With sufficient effort and knowledge, you will surely succeed and we are always here to support and assist you! In case you need financial assistance to have enough money to pay your housing deposit, check out Direct Lending and find out your personal loan eligibility
