5 Guidelines for Working Mums to Own a Home in Malaysia

Gamuda Gardens Sg Buluh Kuang Rawang, Guide Working Mums Own Home Malaysia
The vast greenery surrounding Gamuda Gardens, Sungai Buloh, Rawang. This residential development comprises landed properties such as bungalows, Semi-Ds, Superlink Terrace and Terraces, Lake Villas and Serviced Apartments. (Image Credit: Gamuda Gardens)

Mums have a lot of say when it comes to purchasing a home for the family. In Malaysia, most mums work and earn, contributing a sizable portion of the household income. Therefore, a lot of decision-making also lies in their hands.

Mums are also better at making decisions about the functionality of the home. They will look at details since they will be the ones cooking and preparing meals for the family, taking care of the needs of the children, doing the laundry, mopping the floor and so on. They want a home that will “work with them” in their daily flow of routines.

There are many new-launch projects that are worth considering ─ whether landed or highrise ─ and developers are creating housing suited to the current needs of buyers.

A Home as Education Fund for your Children

And it is good to buy rather than rent. In the end you will have a home that is yours. A home is always a great investment for the future. Homes give you capital appreciation ─ meaning it grows in value over time and this can be your nest egg for your future. You can sell that house say…10 or 15 years down the line and use that money to foot your children’s higher education.

Another way to buy that house is to consider it as rental property ─ meaning you rent out that house and use your tenant’s to pay off your mortgage. This means you do not have to fork out from your own pocket to pay your housing loan. In the end, the house becomes yours without you having paid much for it. That’s the basic premise for rental properties.

Owning a Home is a Lifetime Commitment

But, buying a home for whatever reason ─ whether you want a cosy abode to live in where you can bring up your children or whether you want to build equity for yourself ─ is going to demand a large commitment from you as it is a Big Ticket that you may be spending the next 35 years to pay off.  The first of a series of costs would be making your downpayment as this would be your first step towards purchasing that house.

The good news is ─ when you buy a new development (meaning a new project/building launched by a developer) ─ you get many things free, such as: Free legal fees for your Sales and Purchase Agreement (SPA), free or at least discounted Stamp Duty fees, free Memorandum of Transfer (MOT), Zero Booking Fee and so on and so forth.

Note that the above doesn’t apply to every single new project in town. Developer offers differ from developer to developer and project to project. However, developers are very creative these days in helping buyers own their first home.

Highlighted

Ativo Suites in Damansara Avenue, Guide Working Mums Own Home Malaysia
Looking to live in a township? Here is one that is very well connected. This is Ativo Suites in Damansara Avenue. It is a mixed development located in the heart of Bandar Sri Damansara and developed by TA Global Berhad. (Image Credit: Damansara Avenue)

Some of these projects are simply amazing, as can be seen in the pictures above.  They are are lifestyle-conscious, breathtakingly beautiful and affordable too (from RM300,000). A lot of new residential homes are nowadays surrounded by and built as part of a townships.

However, before you rush to sign on the dotted line or get infected by FOMO (just because your friends and relatives are snapping up units like hotcakes), mums (and dads of course) are advised to first do some homework regarding how to purchase a property.

Check out the following guidelines:

1. Know Your Stuff by Doing Some Research First 

As with anything in life ─ before jumping into a lifelong commitment, do a little research in terms of the various types of homes and land types available such as Freehold, Leasehold, Bumi Lot, Malay Reserve and so on. Each comes with pros and cons. Then there is Strata Titles and Individual Titles, the former applies more to vertical homes like apartments and condominiums, although some landed properties are also strata titled.  Additionally, research what Commercial and Residential title means and the many hidden costs you may have to pay if you choose a home in a commercial-titled project. (Commercial titles are for homes built as a mixed development where there may be hotels, shopping malls and retail units built as part of the development).

A lot of your early homework or research regarding your home’s titles can be found online and  read-up for free in the many property portals online.

2. Study the Types of Mortgages and Lending Rates Available

There are all kinds of flexible homes loans as well as Fixed rate loans as well as Conventional Loans versus Islamic Loans. Don’t rush into the first bank that offers you the loan. Then there are Bank Negara Malaysia’s Lending Policies. Those bank loans based on the Base Lending Rate (BLR) will go up or down depending on the BLR. For example ─ since May 2019, the Indicative Effective Rate of a Standard RM350, 000 Housing Loan for 30 years in Malaysia is 4.35% as stated by Maybank. What does this mean and how will it affect your housing loan/mortgage which you will have to pay off every month regardless of whether your household income rises or not?

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Setia Eco Templer, Guide Working Mums Own Home Malaysia
The trend nowadays is to buy into townships. Setia Eco Templer, is SP Setia’s eco-themed township that was launched in 2016. This 194-acre township is set amongst the majestic Bukit Takun, Templer Park and Kanching rainforest reserves in Rawang. (Image Credit: Setia Eco Templer)

3. Check out the Developer’s Reputation

You may not think this is important when told by a salesman about what a great buy a property is but reputation of its developer is key in determining whether you home will turn out to be the dream home investment it is touted to be or a dud. As a rule of thumb, stick with long standing, award-winning or recognised developers. A developer’s track record is a dead giveaway as to the kind of property you will get in the end such as whether or not the home you are investing your life savings in might fall apart due to shoddy materials and workmanship, or if it will appreciate in a bustling township over time is determined by the name of that developer.

Check also the facilities promised in a project. They may look great in a brochure and some projects or apartments and condominiums boast 70 to 100 facilities designed for the multigenerational family unit ─ children, parents and grandparents ─ to use for the next few decades. Will your family use all of these facilities or will you just be paying a lot of money to maintain these 70 to 100 facilities? Remember, when purchasing apartments or condominiums, you have to pay maintenance fees on top of your housing loan/mortgage as all facilities have to be maintained to keep them in good working condition for the residents over the years. Do not be swayed by pizzazz.

4. Money, Money, Money ─ Can You Afford to Buy a Home?

Generally speaking, your monthly loan installment should not exceed one-third of your household income ─ the pay you and your husband take home after all the deductions. If your combined household income is RM12,000 for instance, then the monthly repayments of your first home must not be more than RM4,000.

Also, first-time homebuyers have to pay about 10% of the house purchase price. The remaining price of the home will be financed by the bank through a housing loan. If your target home costs RM300,000 – you will have to come up with RM30,000 as its initial downpayment.

You may utilise EPF Withdrawals for Housing using money from your EPF Account 2 to pay the downpayment. However, there are steps involved in the withdrawal of this money but it should not cause any delay if you submit your forms immediately after you sign your SPA.

Remember too, to set aside some cash for the purchase of furniture, fixtures, fittings and renovations.

Furthermore, there is also such a thing known as Central Credit Reference Information System (CCRIS) and CTOS to ascertain your financial repayment history for your credit cards and so on. The information is stored in Bank Negara. Whether or not you qualify for a loan will depend a lot on CCRIS and CTOS.

(CTOS is a private company, and one of Malaysia’s leading Credit Reporting Agency (CRA) under the Credit Reporting Agencies Act 2010. They too provide credit reporting and is also widely used by financial institutions to determine an applicant’s creditworthiness aside from CCRIS).

5. Determine the Location of Your Would-be Home

Location plays an important role in your decision as to where to buy versus what to buy. Sure, a project may look like a value-for-money deal with many spacious rooms, a huge kitchen and wide living spaces for you to bring up your family comfortably in. But look beyond your front door. You don’t live in an oyster and “No Man is an Island”, as the saying goes. You will need to connect with the outside world.

Will your dream home  be surrounded by a teeming hub filled with clinics, childcare centres, banks, schools, restaurants, supermarkets and an LRT or MRT for public transport,  or will you be stuck in the boondocks without accessibility to even your daily needs such as food?

The Tropika, Bulkit Jalil, Guide Working Mums Own Home Malaysia
Everybody knows the strategic location of Bukit Jalil and its connecting highway ─ Bukit Jalil Highway. The Tropika in Bukit Jalil is a unique nature-inspired mixed development and lifestyle hotspot comprising of 868 units of serviced apartments and commercial units. It is developed by Berjaya Land.

The home may be affordable but cost in how much money, time and inconvenience will factor in to fetch and send the children to the nearest school everyday or for you to reach your workplace using your car and paying tolls or even to grab a bite or buy groceries.

Sometimes it takes developers at least 10 years to build up a masterplan. If you move in early to a proposed township further away from the city centre, you may have to contend with some inconveniences while the township gradually fills with life. Go back to Point No: 2 to get indications from developer track record to ascertain whether a township will materialize as seen on paper, or not.

The good part about buying a new project in a yet-to-be developed township is that you will usually enjoy a lot of early-bird discounts and freebies. It will save you a lot in the long run. Otherwise buy closer to town or at least where you will have easy access to all the amenities you and your family will need.

For more information on how to own a home, go to Motherhood.com.my.

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