My Executive


    Jun 18, 2013

    Help for the first-time home buyer

    FOR the first-time property buyer, purchasing a home can be a daunting task.

    What kind of property should one be looking for? What can one expect to shell out in cash, and what loans are available?

    Some 300 people who attended a recent My Paper seminar called EC (Executive Condominiums) and Mass-Market Condominiums: Buying your First Private Property, held at the Singapore Press Holdings auditorium, got insights into these issues.

    The catchphrase in the industry globally is "location, location, location", but Mr Donald Ng, senior marketing manager at Qingjian Realty, the event's main sponsor, had another view.

    He said that buying a property first - and ultimately - depends on the quality of one's financials.

    "So, instead of looking for a property first, engage (the services of a) financial consultant. Work out the budget you have, to make sure your loan payment is a comfortable number relative to your income," he said.

    Only then should you begin your search.

    Here are four tips gleaned from the seminar on what you should consider before embarking on the search for that home.

    1. The property should meet your needs, not your wants

    Before even starting a search, sit down and think about what it is you need.

    Buyers should get realistic about their search, said Mr Nicholas Mak, executive director of research and consultancy at SLP International. This means thinking not just about your immediate needs, but also your needs in the next five years, said Mr Mak, one of three speakers at the My Paper seminar.

    That includes family planning. Ideally, the home should be near your place of work, schools your kids might attend, and shops and transportation modes convenient to you.

    But, first and foremost, it has to be within your means, he said.

    2. Consider your finances carefully

    Mr Mak said the figure one ends up paying must not be too demanding.

    "At which point will you be comfortable with financially? The important thing to remember is not to stretch yourself too much," he said.

    This means the mortgage servicing ratio - the proportion of mortgage payment to household income - should be at most 30 per cent of one's gross monthly pay. Anything more than that is too taxing, he said.

    Thus, a couple with a combined income of $6,000 may be hard-pressed to afford a three-room executive condo.

    But do take into consideration the fact that one's income would grow steadily in three to five years, and by then the payments may be less of a stretch, he added.

    Mr Calvin Lee, head of mortgage sales at OCBC Bank, advised against going for a loan tenure of more than 30 years.

    "Is it wise to stretch (the loan) for that long a period? How many of us want to, or can, work until we are 65?" he asked.

    3. Check your credit standing with Credit Bureau Singapore

    "Many of us overlook the fact that we have had bad debts or bad account conduct, such as forgetting to pay a month's credit-card bills," said Mr Lee.

    All these will affect one's credit standing and how much one can borrow, or whether one can borrow at all, he said.

    So it is advisable to check your credit standing with Credit Bureau Singapore.

    Also check with your bank how much in loans you are eligible for, before you place a purchase order, said Mr Lee.

    Also, banks usually require the remaining lease on a property to be not less than 40 years upon loan maturity.

    You must also be between 21 and 70 years old and draw a salary.

    4. Have enough cash set aside for other costs

    Remember that there are other costs involved when buying a property, such as stamp duty, legal fees and valuation fees, on top of the cash down payment.

    Do research on whether you're eligible for housing grants, said Mr Tan Chau Chuang, associate director in the conveyancing and property-law department at PKWA Law Practice.

    CPF grants of between $10,000 and $30,000 are available for first-time EC buyers who are Singaporeans and have a partner who is either Singaporean or a permanent resident.

    But the grant is not applicable to ECs bought from the open market, he said.

    Consultations for first-time home buyers are available with SLP International (a fee will be charged for the service). Call 6238-1012. For more information on buying property, visit ST Property at