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2017-08-08

Brace yourself when you are buying your first home

Brace yourself when you are buying your first home | It is time for you to step into adulthood. To start planning for your future and to start a family of your own soon. You start looking for property in Singapore or in Malaysia, depending on where you are stationed in. However, you are swarmed with the negative comments by people around you telling you various horror stories that you can ever imagine, e.g.: the debts that you got yourself into after getting your first property in Singapore, the tedious process of getting a property in Singapore and the commitments you get yourself into when you start buying a property in Singapore. Fret not, this article will share with you the common psychological effects of having your first own home in Singapore and that you should be bold and brave to take a step out of your comfort zone. Brace yourself when you are buying your first property in Singapore.

Brace yourself when you are buying your first home
Brace yourself when you are buying your first home

Brace yourself when you are buying your first home


The horror of getting into a debt with the bank for at least 2 decades of your life frightens you. You do not want to pay for mortgage loan half of your life. You worry about not having enough money for yourself after paying for mortgage loan for your first property in Singapore. However, you need to remind yourself that all these are just psychological effects of the thought of getting your first property in Singapore. To prepare yourself psychologically to get your first property in Singapore, there are a few psychological effects that you should brace yourself through. 

First and foremost, the first reaction that comes to you when a suggestion of getting your first property in Singapore hits you. You start refusing to acknowledge the debt that you will get yourself into after getting your first property in Singapore. You choose to live in denial. This seems normal to most people as it is a huge sum to deal with after all. However, do remember that you are allowed to use your CPF to make monthly payment for your property in Singapore and this might ease your anxiety and help lessen your burden. In addition, most down payment for your property in Singapore will be covered when you use your CPF to may payment. 

Not willing to have your CPF deducted to make monthly payment for your property in Singapore? Fret not. You can opt for HDB loan if you are purchasing an HDB flat. The benefit of having an HDB loan allows it to cover up to 90% of the HDB flat price. The remaining 10% will then come from your CPF. 10% of the remaining HDB flat price coming from your CPF definitely sounds much better than having to pay monthly for your HDB by using your CPF. Another thing to ease your mind is that there is a Home Protection Scheme (HPS) for your HDB flat. In case of any uneventful situations that you are dead, critically ill or disabled, the Home Protection Scheme (HPS) will cover the share of your mortgage loan up to the amount assured. As for private properties, the Mortgage Reducing Term Assurance (MRTA) does the same by covering the share of your mortgage loan that you assured. Bear in mind that these two schemes, however, do not apply to situations say, you are fired from your company. Hence, it is still advisable to have a saving plan in case of emergencies, preferably an amount that is enough to cover your mortgage loan for at least 6 months.

Next, after getting your first property in Singapore and getting yourself tied up with mortgage loan, you then decide that you no longer have the ability to make savings or to make other investments. You are left with lesser than $500 per month after paying for the mortgage loan. Therefore, your first property in Singapore becomes one of your retirement plans and your retirement asset. However, we would advise you to seek for a certified and trustworthy finanical planner about your decision of having only one asset or treating your first property in Singapore as your retirement plan. Truth is, even with lesser than $500 a month, the possibility of you making another investment is still high and you could make another extra few hundred dollars with it. So brace yourself in making another investment regardless of how much money you are left. 

Lastly, you start spending money on renovations that you once told yourself were stupid. You used to think spending $100 on a beautiful ceiling fan is stupid and the worst decision ever. But guess what? You start thinking that it is necessary. The aesthetic value makes you think the ceiling fan is worth it. You start to notice the difference between renting a house and buying a property yourself. You realize that all the furniture matters and it is necessary to splurge on all those things that you once thought were stupid and a waste of money. Therefore, to prevent yourself getting caught in the middle of wanting more but not having sufficient money for them, start saving in advance and plan your budget wisely. That will definitely save yourself a lot of time and renovation loan with high interest. And you will be thankful and glad that you started saving earlier. 

In a nutshell, buying your first property in Singapore is not so of a nightmare if you plan ahead and do you budget wisely. After all, getting your first property in Singapore is definitely going to worth your money, time and effort in the future. However, do your research and homework first before getting yourself your first home in Singapore. So brace yourself when it comes to buying your first home in Singapore. 

Maybe you like to read Why you should consider investing in Penang properties to. See you all nxt entry. 
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