This is for all first-time homebuyers: buying your first home is a goal most young Singaporeans hope to achieve. Some achieve this goal by applying for a BTO flat with their boo. Others patiently wait till they’re 35 to buy a BTO or resale HDB flat. Those who have the means purchase private property.
But being a first-time homebuyer can be difficult due to the various property jargon and numerous steps required. To simplify the process for you, we asked three existing homeowners for tips on their experiences as first-time homebuyers. From explaining home loan eligibility criteria to designing your space, we’ve got you covered.
*Views and opinions expressed in this article are the respondents’ own. Answers were edited only for brevity and clarity.
Summary of Tips on Buying Your First Home
|Comparing home loan types||Banks typically offer a lower interest rate than HDB, but HDB allows you to loan more|
|Calculating down payment||Save up for your down payment in advance so you can take a smaller loan|
|Renting as an option||Rent could be an alternative housing arrangement with your partner|
|Considering an HDB resale flat||If you’ve failed to get a BTO after multiple times or want more freedom in planning your life’s timeline|
|Setting expectations when buying your first home||Make a list of ‘wants’ versus ‘needs’ for a more focused search|
|Getting a property agent||Not always necessary but good for those who are busy|
|Housing direction affects the amount of sunlight||Pay attention to which direction your home faces because it’ll affect how much sun you get|
|Renovating your home||Design your space for your needs and renovate it according to your budget|
Sorting Your Finances When Buying Your First Home
For many Singaporeans, their first homes will be an HDB flat – specifically, a BTO flat. But for those who have more earning power, you could be looking at executive condominiums (ECs) or even condo listings.
Regardless of the type of property you choose, you’ll have to budget for your new home. This means having to consider the type of loan you’ll take to finance your property purchase. And that leads us to our first point on comparing home loan types.
1. Comparing Home Loan Types
The first person we spoke to is Eugenia Liew, 29. She bought a 5-room HDB flat in Punggol during a Sale of Balance Flats (SBF) exercise with her then-fiancé and now-husband. Eugenia and her husband didn’t have much time to save for their flat. They got their ballot result in June 2018, picked their unit in October 2018, and got their keys in June 2019.
“Because it happened so fast and we didn’t plan much, we took the HDB loan, which was the most straightforward and could loan us more (the maximum loan amount or Loan-to-Value (LTV) limit is 90% of the property’s price when she bought the flat; now the maximum LTV for HDB-granted loans is 80% of the property’s price).
We briefly checked if we could get a bank loan because we knew it was cheaper, but could not afford the 25% down payment at the time. HDB charges 2.6%, while banks offer packages below 2%. We recently refinanced to a bank loan, so it’s all good now,” Eugenia says.
Lesson learnt: It’s good to understand what home loans are available and how much savings you need to pay upfront for each one.
And if you can’t take a bank loan from the get-go, that’s okay. You can always refinance your home loan when you have cleared off some of the debt and/or have better earning power.
For guidance on refinancing (or anything to do with home loans, really), reach out to our mortgage experts. They’ll not only guide you through the process but also help you score the best home loan deals.
2. Calculating the Down Payment and How Much You Can Afford
Eugenia also adds, “In hindsight, I think my advice to others would be to plan ahead and start saving up early for that down payment. It makes sense to take a smaller loan and at a cheaper rate.”
Lesson learnt: Start planning a few years in advance so you have time to save up for it. This way, you may be able to score a more competitive bank loan and loan less (and incur less interest). It’s a win-win!
Don’t wait till the last minute! Working out your finances is the first thing you should do before buying a home. You can use online tools like the PropertyGuru affordability calculator to get estimates for your monthly repayment instalments and down payment.
Renting or Buying a Resale Flat for Your First Home
3. Renting as an Option
The next person we spoke to is Chloe Tong, 27. She bought a 5-room BTO flat in Tampines with her partner and is waiting for it to be completed.
“After I paid the down payment for my flat, the financial commitment of having to pay for a house became more real. Now, whenever I make any big life decisions like what job offers to accept, this remains at the back of my mind and influences my choices.
If you do want to live with your partner but are still exploring different paths in life, you might want to opt for a housing option that’s more flexible like renting in Singapore,” Chloe advises.
Lesson learnt: Unless you have many zeros in your bank account, a mortgage will always be a long-term debt that could take decades to repay. If you anticipate any major life changes or shifts in your finances but yet want to move into a new place with your significant other, renting could be an alternative housing arrangement.
When you do the math, buying a home may make more financial sense. However, we know life cannot only be measured in dollars and cents and renting can very well be a good compromise for those who want to know what it’s like to live with a partner.
4. Considering an HDB Resale Flat
Before we ended our conversation, Chloe left us with one more nugget of wisdom.
“I know of friends who applied for popular BTO estates like the Bidadari BTO project and failed over and over again. They were either unwilling to stay in HDB flats in non-mature estates or looking to flip their BTO flat for profit in the future.
From them, I’ve learnt that if you’ve failed thrice to get a BTO in a popular estate, it may be time to revisit your priorities or look into the resale market.
Though resale flats are older and more expensive, there is more freedom. You can plan your life based on your timeline, rather than the construction timeline of a BTO,” Chloe concludes.
Cherynn Tan, 27, knows this feeling all too well. After trying nine times and failing to get a BTO flat, she and her fiancé bought a 4-room resale flat in Bendemeer.
Lesson learnt: It’s good to know what you want, but if you’re finding it challenging to find or secure your ideal property, it may be time to widen your net.
BTO flats are the go-to choice for many young couples, but that makes it incredibly competitive. If you haven’t been able to get a unit, consider browsing PropertyGuru’s resale HDB flats listings. If you have a more generous budget or just like to browse fancy apartments, check out these resale condominium listings.
Choosing a Home: What to Look out For
5. Setting Expectations When Buying a Home
Another tip from Cherynn is to list down your priorities when home shopping.
“Create two sets of requirements when buying a home: the must-haves and good-to-haves. For my fiancé and I, our must-haves were:
- A home that was within walking distance of an MRT station
- No west sun
- Some food options around the area
- At least a level five flat, and
- An unblocked view as we value having privacy
Our good-to-haves were a supermarket close by and a high-floor and windy apartment. Be realistic for your must-haves because you can’t have the best of both worlds unless your budget is super high,” Cherynn shares. With this method, she managed to find her dream home in just two short months!
Lesson learnt: Make a list of ‘wants’ versus ‘needs’ for a more focused search. Without a list to continuously go back and refer to, you may find your home search to be very inefficient.
6. Getting a Property Agent
Cherynn also shared her thoughts on hiring a property agent. “I didn’t find a buyer property agent, but it is a wise idea if both of you don’t have time or are not very experienced with the home buying process. Agents help you arrange viewing slots and look out for projects you might have missed.
If you’re arranging the viewing slots on your own, then arrange multiple viewings in one area within 20 minutes of each other. This way, you can walk from one viewing to the next.”
Lesson learnt: It’s not always necessary to hire a property agent to help you, but it could be good for those who are busy.
While Cherynn didn’t hire a property agent and her home-buying journey was smooth sailing, this doesn’t always happen. There are tons of steps and processes involved in buying a home and if you’re unfamiliar with them, buying a home can be challenging without help.
So if you don’t have the bandwidth to deal with the nitty-gritty details, outsource this labour to a professional. You can connect with trusted agents via the PropertyGuru platform. Who knows, you might get along so well with your agent that they become a friend.
7. Don’t Overlook the Small Details, like the Housing Direction
The last person we spoke to is Soh Vil, 27. She bought a 4-room BTO flat at Tampines North with her then-fiance, now-husband, and has lived there for slightly more than a year.
When she bought her home, she picked the north-facing unit. However, after living there, she realised maybe that wasn’t the best idea.
“The direction your house faces is very important. We wanted to avoid the setting sun, so our windows face north. But that means our entire house is very dark. Our service yard rarely sees the sun. Even during the day, we often have to turn on the lights. If we could go back and reselect our place, we’ll pick a unit that faces east to get more light,” she explains.
Lesson learnt: There is no detail too minor! If it is important to you, you may want to pay closer attention to which direction your home faces because it’ll affect how bright and hot your place will be.
Soh Vil planned to avoid the infamous setting sun, which tends to heat up homes quickly but didn’t think of how this would affect the natural light in her home. While most will view lighting and ventilation as secondary issues to consider, we think they have become increasingly important in our current climate.
Learn how to pick a home with good lighting and ventilation to maximise your comfort levels.
Renovating and Designing Your Home
8. Renovating Your Home
Soh Vil and her husband went the DIY route when renovating their home to save money. Only electrical wiring, plumbing and tiling were left to the professionals.
They ordered, assembled and installed furniture, got their family to help them paint, and designed the house to their needs. For example, the couple doesn’t watch TV so they bought a big dining table instead so they can host more friends and family.
“If the Optional Component Scheme (OCS) is an option, think carefully about whether every element will be used and kept. For example, if you’re hacking walls, then don’t go for the flooring option. If you want to redesign the bathroom, then don’t go for sanitary fittings. We opted in for things that we ended up getting rid of,” Soh Vil cautions.
Lesson learnt: Design your space for your needs and renovate it according to your budget.
One of the main ‘selling points‘ of the OCS is that you can use your CPF to pay for it as part of your BTO flat’s price. This could mean spending less cash on renovations. However, as Soh Vil has shared, it pays to consider carefully before opting in. The last thing you want is to spend more money on removing these structures!
How to Apply for a BTO Flat in Singapore
For a quick how-to on applying for a BTO flat in Singapore, watch our guide here.
Buying Your First Home in Singapore
As a first-time homebuyer, it’s good to ask around for advice and to do your research. But remember, everyone has different needs and preferences; every situation is unique. Ultimately, you should make choices based on what’s comfortable for you and your partner.
For all first-time home buyers, we hope this article has been helpful to you. If you need help working out your finances and have questions about whether you choose an HDB loan or a bank loan, you can always speak to our friendly Mortgage Experts for assistance at no cost. Good luck!Chat with us on Whatsapp Fill up an online form
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