guide to save for first home malaysia young adults

The Complete Guide to Save for First Property for Young Adults

By: Guyub
27th Dec 2021
Buy & Sell

Out of all the purchases you make in your life, buying your first home may just be the most daunting. As a first time home buyer in Malaysia, you may feel overwhelmed by the amount of things you need to consider before you sign on the dotted line.

It can be a huge challenge, especially as a young adult working as a fresh graduate. The biggest hurdle for most first-home buyers is that most properties require you to make a 10% down payment of the purchase price of your home. Not to forget the other costs too such as stamp duty, legal fees, bank processing fees, stamping for SPA etc. But not to worry, as we will go through many ways to make it a reality.

Plan And Determine How Much You Need

Before we even begin saving, the very first step is to do your research. List down all the locations that you prefer, and find out the average prices within the neighbourhood. This way, you will be able to set yourself a clear attainable goal.

If you are able to save even more for the upfront down payment, the better it will be for you, because this means that you will have to pay less for your loan. While there are some who may want to go for a 0% down payment plan, this is not necessarily a good idea. Many experts agree that if you’re able to pay more for your down payment, the less your mortgage loan will cost.

Create A Budget That Works For You

This is probably the single most important tip. One of the key things of making your monthly income work out is to create a budget that works for your needs.

Rather than putting what is left over at the end of the month into your savings, set aside 30% of what you earn as savings for your home loan instead. This sets a routine to always have a set amount of money ready to be saved, because remember – consistency is key when it comes to savings.

This leaves you with 70% of your income. Spend it wisely, and you will be surprised how much unnecessary expenses you can do without when you have a clearer view of your budget. Always remember to save first before you spend.

“How can I save and live within my means” you ask? This leads to the next point…

Save Where You Can

You will be amazed by how much money can be saved when you start looking for cheaper alternatives to the things you use, and cut out everything else that’s unnecessary.

You will often be able to find alternatives to brand name products that are more or less similar to what you get. Then, cut down on unnecessary shopping by avoiding buying fancy clothes, or spending on junk food and snacks. The thought of buying that brand new iPhone may sound really nice, but there are many other cheaper alternatives that do the job just fine (sometimes better). They’re nice to have, but they’re not a necessity.

You can also make do without those monthly subscriptions, like your gym membership, Netflix or Spotify. It may be only RM15 to RM20 per month, but they all add up to a huge amount at the end of the month. (But fret not, we’re revisiting this at the very end of the article.)

This new lifestyle may take a while to get used to, but it will be so satisfying to check your savings balance at the end of the month, to realise that you are able to save more than you think you could!

Hustle On The Side

Sometimes, your monthly savings may not be enough. You may want to start considering other ways to increase your sources of income. Of course, you could ask your boss for a raise. But wouldn’t it be better to perhaps turn what you love doing into an income-generating hobby?

Treat this as an investment into yourself by using your own skills and talents freelancing jobs. Start a blog, sell your own paintings, or take time on the weekend to become a Grab driver. There are plenty of opportunities out there to make a secondary income, especially online. Look out for platforms (like on Facebook Groups) that specifically cater to these sorts of markets.

Who knows, you may even turn your passion for baking into your very own business!

Take Advantage of “Skim Rumah Pertamaku/My First Home Scheme”

Skim Rumah Pertamaku, or My First Home Scheme, is an affordable home scheme launched in 2011 to provide financing support for first-time home buyers. This is an excellent scheme that allows those who are eligible to finance up to 110% of the price of a property, while also providing a path to homeownership without the need for a substantial downpayment!

There are several criteria to be met; it only applies to residential properties in the primary and secondary market in Malaysia, up to a maximum property value of RM500,000, and it must be owner-occupied. There are different participating developments and banks, so make sure you ask the developer or your preferred banks.

You can learn more about the scheme right here.

Reward Yourself

You’ve made it thus far by following the above steps. Now it’s time to treat yourself for the great job you’ve been doing so far in maintaining discipline by saving every month, and sticking to your plan. It’s always a good idea to set aside about 5% to 10% of your income, as long as you don’t go overboard on this.

So go ahead, let loose. Treat yourself to a fancy meal. Buy that console game that you’ve been waiting for. Go for a micro retreat with your loved ones. Oh, and subscribe to that Netflix K-Drama programme that you find really hard to let go. You deserve it.

The statement and information in the articles are the opinion of the writer and meant only as a guide. Any property purchase, rental or lease involve many legal issues and other complication depending on the individual facts and circumstances. Readers and Users are strongly advised to seek professional advise including from qualified and competent lawyers, bankers and/or real estate agent to verify the information and the statement before embarking on any purchase, rent or lease of any property. To the fullest extent permitted by law, we exclude and disclaim liability for any losses and damages of whatever nature and howsoever cause and arising including without limitation, any direct, indirect, general, special, punitive, incidental or consequential.

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