Scenario 2
Scenario 2
Mark and Michelle, both in their late 20s, work in an executive position. Their joint take home salary is RM5,000. Unlike John, this couple has a 2-year-old daughter. After renting a small apartment for the last couple of years, they decided that they should get a bigger place to raise their daughter comfortably.
The couple saves RM504 every month, despite having to fork out on groceries, car loan of RM600, fuel and maintenance, phone bills, baby products, to name a few. The couple monitor their spending wisely and tries to save wherever they can.
Here is a rough breakdown on what it would cost to finance a RM550,000, 3 bedrooms, 2 bathrooms, 1,000 plus sqft terraced house in Penampang today.
Property price
Down payment( 10 %)
Maximum loan( 90 %)
Tenure
RM550,000
RM55,000
RM495,000
35 years
Interest rate 4.35 %( estimated)
MONTHLY INSTALMENT
RM2,296
The government introduced the Malaysia My First Home Scheme; allowing first-time home buyers that earn less than RM5,000 a month to finance a house that costs up to RM500,000. The scheme removes the need for a down payment but the result of which is simply a large loan amount with a weighty monthly repayment.
Even though the property market is hot right now, with developers offering exclusive packages and rebates, it doesn’ t mean anyone – especially the younger generation, should jump into it before studying the market carefully. Without planning and precise calculation, you might fall in debt holes.
Before buying a property, ask yourself these 3 questions.
1. Do you really need this house? 2. Do you have enough money for deposit and all other fees that might be incurred? 3. Can you manage to repay the bank for 35 years consecutively?
Disclaimer: This article is intended for general awareness purposes only and should not amount to any form of advice. The calculations, information and data contained herein are mere examples and the writer accepts no liability for loss or damage suffered or incurred by anyone as a result of the reliance on this article.
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