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How to Save And Buy for Your Dream House

Having a house is something that almost everyone wishes to own. Due to the expensive house prices, hopes of owning a house might seem difficult but it is definitely not impossible. Ideas on savings and financings can help tremendously in owning your dream house relatively faster.  

So now, you will need to take things into your own hands. Banks typically finance up to 90% of your mortgage so your first priority is to put enough money aside for your 10% down payment and some extra budget for the lawyer fee, stamp duty, and renovation cost. Then, with the right mix of financing and government scheme, you are well on your way to becoming a homeowner. In this article, we will show you how.

Save for your deposits

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Set a monthly savings plan that will allow you to save enough for your down payment within a reasonable timeframe, and be disciplined in executing the plan. There are many saving tips that can help you to achieve your saving goal faster. While they’re totally practical, you may be required to cut back on things you enjoy. 

Compare this yourself: switching your RM10 meal at a restaurant for an RM4 homemade lunchbox;  an RM10-12 artisan coffee for an RM2 brewed dark coffee from home. And quit smoking! A pack of cigarette costs RM18-23, and if you don’t smoke, you pay NOTHING. Did you get the idea?

A few hundred or even a few thousand ringgit here and there can really make a HUGE difference. If required, you can tap into your savings in your Employee Provident Funds (EPF) Account 2 so that you have enough for your down payment.

Choose the right housing loan

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For most people buying a house, it is considered one of the largest purchases in their life. Therefore, picking a home loan that offers the best interest rate is very important to pay off your mortgage.

There are quite a number of bank loans available in Malaysia, with a current market interest rate between 4.2% and 4.4%. Spend time to do some research and you may find a package with a lower interest rate. You can check out the financial comparison like Imoney, Ringgit Plus, Loan Street to find the best home loans in Malaysia. A home loan calculator can help you to figure out your monthly repayment of the mortgage as well.

Alternatively, you can tap into alternative home financing scheme such as Maybank’s HouzKEY. Under the scheme, you can choose to rent a property from the bank with a flexibility to purchase the property as and when you are ready during the rental tenure. The scheme is open to the public. Three months upfront rental deposit is all you need to have, and you will be able to move into your dream house in no time.

Get assistance from government housing schemes

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Combine frugal habits with a smart long-term mortgage strategy and you’re almost there. Here’s more good news: there are some schemes from the government that can help you out. These government housing schemes available for Malaysian are PR1MA, Rumah Mesra Rakyat 1Malaysia (RMR1M), MYHOME, My First Home (SRP), My Deposit 2018. For a civil servant, there are the PP1AM, etc.  

We’ve compiled an overview of the mentioned government schemes to assist you in picking out the ideal one that could work for you. For more information, you can refer to:

Scheme Requirements
PR1MA – provide affordable housing between RM100k and RM400k
  • Income (individual or combined): RM2,500 – RM15,000/month
  • Single or married age 21 and above
  • PR1MA unit can only be either a first or second purchase only
RMR1Mprovide a subsidy to a low-income group to build a house on their land
  • Income (individual or combined): RM750 – RM3,000/month
  • 18-65 years old
  • Own no property or incomplete housing between you and your spouse (if any)
  • Own a land without any restriction
MYHOME – provide RM30,000 subsidy for first time home buyer 
  • Income (individual or combined): RM3,000-RM6,000
  • For the first-time homeowner
  • 18 years and above
SRP – provide financing up to 100% from the financial institution for property value between RM100k and RM400k
  • Income: not more than RM5,000 (for an individual) or RM10,000 (combined)
  • Up to 35 years old
  • First-time home buyer
My Deposit 2018 – a contribution of 10% of the property price or maximum RM30k for property not more than RM500k
  • Income (individual or combined): no more than RM3,000-RM15,000/month
  • For a first-time home buyer
  • 21 years old and above
PPA1M – affordable housing project for a civil servant in Malaysia
  • For civil servant in Malaysia (already retired or contract position can apply)

Conclusion

Starting early, planning and saving whatever you can for your dream house puts you in a better position down the road compared with someone who waits. If you need financial assistance to help you to get on the property ladder, Direct Lending is here to help 

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