First-Time Home Buyer: Your Guide to Buying a House

Purchasing a home can be stressful, particularly if you’re a first-time buyer. But there’s no need to get worried when you have our advice. These pointers will assist you in navigating the procedure, saving money, and avoiding typical blunders. Let’s get right to the point and not waste any time.

Here’s a good read for couples in Singapore who wants to save money.

Analyze Your Options

There are a variety of mortgage options available, each with its own set of benefits and drawbacks.

A bigger down payment (DP) means a lower monthly mortgage payment. If you decide to go for the lowest monthly payment possible, go for a 30-year fixed mortgage. In contrast, if you can afford higher monthly payments, a 20-year or 15-year fixed loan may provide a lower interest rate.

Using a loan calculator, determine if a 15-year or 30-year fixed mortgage is a better fit for you. An adjustable-rate mortgage, on the other hand, is riskier but guarantees a low interest rate for the first few years of your loan.

Take into account other costs.

To add to your monthly mortgage payments, there are other expenses to consider when purchasing a property. These are some of them:

Survey costs

A survey cost is a cost of having a professional survey your home to determine its boundaries. The survey cost in Singapore typically ranges from SGD 200 to SGD 800, but you might need to pay more if the property is in a flood zone or if it’s on a hill. This is a one-time cost if you plan to sell the house in the next few years.

If you have plans or are planning to stay put for a long time, though, it could make sense to skip this expense and rely on existing structures for your property boundaries. However, there are some parts of Singapore where fixed structures don’t exist, and a survey has to be conducted before a buyer can register their ownership at the Land Registry.

Solicitor’s fee

When you purchase a home, you need to pay the solicitor who is working with your real estate agent. There are some cases that it may be possible to forgo this expense when you have agreed on a fixed price offer for the property.

Inspection costs

An inspector examines the house from top to bottom and reports any problems or issues that might not become apparent during an initial walk-through and inspection of the property. The cost of an inspection varies by location and type of property but can range from $200 to $500 per hour.

Removal costs

When you buy a house, you’ll need to pay for the removal of your belongings and any furniture that was included in the sale. Removal cost is often based on how long it takes the removal company to finish the job, not on an hourly basis.

Buildings insurance

The seller of the property is responsible for purchasing buildings insurance. As a new homeowner, you must purchase this type of policy regardless of your credit history (if you don’t, then it’s considered fraud).

Initial furnishing costs

When you have a new house, you will want to buy new furniture and other essential items to make the home space feel like home. The initial furnishing cost is difficult to estimate since it can vary greatly based on the condition of the property and what is already in place. It would be best to have or get assistance from a professional interior designer to make sure you go about buying the right furniture for your home.

Decorating costs

Just like furnishing costs, the decorating costs depend largely on the condition of the property and what you already have. Adding your own personal and unique touch to a home can be expensive and will most likely exceed $1,000.

Furniture removal costs

If you or someone else helped move your belongings into your new house, you would need to pay for taking the old furniture out. This cost may vary depending on whether you can transport everything yourself or if it has to be done by professionals.

Mortgage arrangement and valuation fees

A mortgage arrangement and valuation fee is when a lender arranges a mortgage and a surveyor conducts a valuation on the property. The charges for setting up your mortgage and examining the property value will vary depending on which company you go with. However, it’s safe to assume that in Singapore, they usually range from $1,500 to $2,000.

Stamp duty

Lastly, you will need to pay stamp duty on the purchase of a property. Stamp duty is a state tax that’s imposed on documents, payments, or transactions in some states and varies from one jurisdiction to another.

The most critical consideration for a first-time homebuyer is whether you can truly afford to take this step. Before you start seeking a new house, it’s a good idea to make a budget. Make sure you account for everything in your budget and determine whether you can afford to buy a home in Singapore.

Check your credit report and put any new activities on hold.

When applying for a home loan, your credit will be one of the most important elements to identify whether or not you are approved, as well as determining your interest rate and possibly loan terms.

So, before you start the home-buying process, verify your credit. Dispute any errors that may be lowering your credit score, and seek ways to boost your credit score (CS), such as paying down any outstanding obligations.

To keep your credit score from dropping after applying for a mortgage, wait until your home loan is closed before creating additional credit accounts, such as a credit card or an auto loan.

Choose the Right House and Neighborhood

You might expect to buy a single-family home, which could be excellent if you want a large yard or a lot of space. On the other hand, a condo or townhouse may be a better option if you’re prepared to forego size in exchange for less maintenance and extra amenities, and you don’t mind paying a homeowners association fee. However, even if the house is perfect, the neighborhood could be disastrous. So make certain to:

Attend Home Showings

If you’re a hundred percent serious about buying a home, then it’s important for you to check out properties in person. This is your opportunity to see what’s on the market and get an idea of how much homes are selling for.

Attend open houses

The best way to truly understand whether or not you like living in an area is by attending an open house. This gives you the opportunity to communicate and interact with neighbors and ask questions. But be careful, as there may come a time when this could result in pressure sales tactics used by real estate agents wanting to make a sale.

Visit neighborhoods at different times of the day.

This does not entirely mean that if a neighborhood has crime, you shouldn’t live there. Instead, consider all elements to determine whether it’s safe. Not all neighborhoods are safe at night, so visit them during different times of day before signing anything.

Research surrounding amenities

If your favorite supermarket has a location in the neighborhood, chances are good there’s something else worth considering nearby as well. Having a hospital nearby is a huge plus, especially if you’ll be living with your elderly parents. So be sure to research other available services that could make life easier for you.

Be sure to check out public transportation in the area and consider all your travel options when budgeting for a home. What is the cost of commuting from work every day? In addition, you should check out schools nearby and recreational facilities such as parks, gyms, shopping centers, and supermarkets.

Get professional help with financing.

While some people believe they can do all of this on their own without assistance, many first-time homebuyers benefit from hiring a real estate agent and mortgage broker. A reputable real estate agent can help guide you through each step of buying a new home in Singapore while a trusted mortgage broker builds

Look into the schools in the area.

If you have a child or you are planning to have children, then the quality of local schools should be a major consideration. You may even want to buy in an area that’s known for having excellent public schools, so you know your child will get a good education no matter where they go to school.

Take a look at the area crime and safety statistics.

One of the biggest concerns many first-time homebuyers have is how safe their new neighborhood will be. For those who don’t want to worry about the safety and security of their family, areas with higher crime rates might not be ideal places to buy a home.

Maintain Your Budget

Look for houses that are less expensive than the loan amount you received. Despite the fact that you can theoretically afford your pre-approval limit, it is just that: a restriction. It doesn’t take into account other monthly costs or problems like a broken dishwasher that might arise during homeownership, especially early on.

Shopping with a certain budget in mind will also help when it comes time to make an offer. It’s likely that you’ll bid on residences that receive several offers in a competitive real estate market with limited inventory. When you locate a home you like, it’s tempting to make a high-ball offer that you know will be accepted. But don’t allow your emotions to get the best of you.

Shopping within your pre-approval limit gives you some leeway when it comes to bidding. To avoid a mortgage payment you might not afford, stick to your budget.

Here are some tips to help you stick to your budget:

  • You can try to refrain from buying unnecessary things until you have more money.
  • You can stay on a budget by cooking your meals at home and packing school lunches for your children.
  • You can look into purchasing a new car that costs less than what you were pre-approved for after buying the house. You could also ask for a bonus or seek a raise from work to help with your financial situation, as some employers do offer bonuses as part of their benefits package.
  • Purchase furniture from garage sales and thrift stores. You might be able to find something brand new at a way lower price.
  • Put away some of your salaries immediately after receiving it, so you know what is available to use.
  • Don’t take on any additional debt such as credit cards or student loans.
  • Investigate utility costs in your prospective neighborhood and compare them with rates at current residences. Always remember that some companies offer discounts for senior citizens, students, and people with disabilities when considering new energy bills.

If you want to start saving money, here’s an article that offers tips to save money.

Take Advantage of Open Houses

When touring homes during open houses, be alert of any odors, stains, or objects in disrepair. Inquire about the home’s construction, when items were last changed, and how old critical systems like the air conditioning and heating are. If there are other possible buyers visiting the house at the same time as you, don’t be afraid to plan a second or third visit to take a deeper look and ask questions discreetly.

Visiting an open house is the best way to get a feel for what homes are on the market without any pressure or obligation. You can see how much other people are offering for properties, how long they’ve been listed, whether there are multiple offers, and if you would be happy living in one of them.

You should also look online at several open houses before making your final decision. Some real estate agents even offer virtual tours of homes you cannot visit in person.

If possible, tour the neighborhood at different times of day to see if it changes your impression of the area and home itself and whether you will be comfortable with the surroundings day and night.

Purchase a Home Insurance Policy

A home insurance policy is a type of insurance that protects you in the event of damage to your home and its belongings. Insurance rates for different policyholders can vary widely, depending on risk factors like the condition and location of a property, how many claims have been filed, and whether or not it has suffered damages in the past.

You need to purchase a homeowners insurance policy if you want to be eligible for a mortgage because lenders typically require borrowers to fund such policies. It could also help protect you from lawsuits filed by others who claim they were harmed while on your property.

Your lender will need you to get homeowners’ insurance before closing on your new home. To get the greatest deal, shop about and compare insurance prices. Sift through the plans’ coverage; a less priced insurance generally means fewer safeguards and more out-of-pocket costs if you file a claim. Additionally, this insurance does not cover flood damage, so if your new house is in a flood-prone location, you may need to get extra flood insurance.

Your first house in Singapore is a significant investment, maybe the largest you’ve ever made in your life! So make sure you’re paying attention and just taking the appropriate measures. You’ll want to know what you’re getting yourself into and how you can protect your investment.

If you don’t already have a real estate agent, look for one who specializes in first-time homebuyers, as they will be familiar with the process and help steer you through it. You may also want to consider hiring an attorney or financial adviser before making such a commitment. Based on all personal factors involved, they will provide their expertise on the best course of action for your situation.


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