Thursday, February 1, 2018

Don't Miss Out on The Perks As A First-Time Home Buyer

Buying your first home is a daunting and exciting process.
The process is not as straightforward as buying goods from a store shelf; a lot of complicated processes and procedures are needed for real estate transactions.
For example, if there is affordable housing development on Penang land for sale, you must register yourself with the State Housing Department before you can be considered for the application for affordable housing.
Also, as the prices in the real estate market soar higher and higher, so does the average age of first-time home buyers.
Luckily, the government has put in place a number of schemes to aid the younger generation in acquiring their first home.



Photo credit to Google images 

If you have never purchased a property, chances are you may not know of the benefits that you are entitled to.
Just like myself, I never thought that I actually can apply for up to 100% margin of financing from any bank for my first home.
So, in today’s guide, I have compiled a list of perks that are available to first-time home buyers.
I hope you will benefit from today's sharing a lot. :)



Photo credit to Google images 

#1 Stamp Duty Remission
In Budget 2017, the government announced that a full waiver of stamp duty for first-time home buyers is effective between the period of January 2017 to December 2018.
Thus, the Sale and Purchase Agreement for the purchase of the said property must be executed between the period as stated.

This exemption applies to stamp duties for the instrument of transfer and for loan agreements.
The catch is, this 100% exemption is limited only to residential properties with a maximum property value less than RM300,000.
For properties valued upwards of RM300,000 and below RM500,000, waivers of RM5,000 and RM1,500 from the total stamp duty for the instrument of transfer and loan agreements, respectively, is provided.

This remission is however, not valid for any residential properties, first-time owner or not, obtained through inheritance or gift.



Photo credits to Google images

#2 My First Home Scheme (Skim Rumah Pertamaku)
The My First Home Scheme or Skim Rumah Pertamaku (SRP) as announced in Budget 2011 allows prospective home owners to apply for up to 100% margin of financing from any bank that is in the participating list of financial institutions.

Criteria for eligibility under the scheme include:
#1 Malaysian
#2 Aged 40 years or below
#3 The applicant is buying a residential property for the first time
#4 Gross maximum income of RM5,000 per month, per applicant

Eligible properties must be:
#1 A residential property located in Malaysia
#2 Minimum property value of RM100,000
#3  Maximum property value of RM400,000
#4 Property must be purchased for the applicant’s own occupation

Financial requirements include:
#1 Financing tenure not exceeding 35 years with the borrower’s age not exceeding 65 years at the end of the tenure.
#2 Amortizing (fixed repayment schedule in regular installments) only
#3 Instalments to be paid via monthly salary deduction or standing instruction
#4 Compulsory Fire insurance/takaful

Notes: Housing financing can be obtain from a list of banks in Malaysia



Photo credits to Google images

#3 First House Deposit Financing Scheme (or MyDeposit Scheme)
This financing scheme, announced during Budget 2016 offers assistance in the form of a one-off contribution of either 10% of the purchase price or a maximum of RM30,000 (whichever is lower).

Criteria for eligibility under the scheme include:
#1 Malaysian
#2 Aged 21 and above
#3 The applicant is buying a residential property for the first time
#4 The applicant is able to secure financing for the property from financial institutions
#5 The applicant’s gross monthly household income lies between RM3,000 and RM15,000
#6 The maximum purchase price is capped at RM500,000

Eligible properties are subjected to certain restrictions imposed by the scheme:
#1 The property cannot be sold within a period of 10 years after the date of the Sale & Purchase Agreement
#2 The property must be a licensed housing project from a licensed housing developer
#3 Government housing projects are not eligible

The application process and approval will usually be completed within a period of two months for approval. However, do note that applications for the scheme are only open a few months a year.



Photo credits to Google images

#4 MyHome Scheme
This scheme was announced in Budget 2014, and aimed at encouraging the private sector to develop more affordable housing.
The scheme offers a RM30,000 incentive per unit of residential housing for first-time house buyers. Development projects must be approved by the National Housing Department to be eligible for financing under this scheme.
However, do remember that affordable housing in certain states are subjected to certain criteria.

Criteria for eligibility under the scheme include:
#1 Malaysian
#2 Aged 18 and above
#3 The applicant is buying a residential property for the first time
#4 One unit of residential housing per household
#5 Gross monthly household income between RM3,000 and RM6,000

Houses purchased under this scheme will be subjected to a moratorium of 10 years from the date of the Sales and Purchase Agreement.



Photo credits to Google images

#5 Bank Loans with High Margins of Financing
In Malaysia, most banks will offer bank loans with higher margins of financing (most of the time up to 90%) if you are buying your first home.
That is, provided you have a good financial record and if your financing eligibility meets the minimum requirements.

Depending on the margin of financing approved for your loan, the amount you pay for the down payment may only be as little as 10% of the purchase price.
However, you do need to have a small amount in cash to pay for the booking or earnest fee, which is usually 2%-3% of the purchase price.
After signing the Sales and Purchase Agreement (SPA), only then are you required to pay the remaining 7%-8%, bringing the total down payment up to 10% of the purchase price.



Photo credits to Google images

#6 Withdraw funds from EPF
But, what happens if you do not have enough cash in your pockets?
Fret not, as you are entitled to withdraw funds (although in a limited amount) from Account 2 of your Employees Provident Fund (EPF) to pay for the down payment.
This however, is subjected to certain rules and regulations.
You need to have secured a bank loan and have the formal Sales and Purchase Agreement (SPA) signed before you are allowed to make the withdrawal from your EPF. Remember that all documents must be certified and stamped.



So, are you ready for your first home now?
I AM! :)

No comments: