When considering a mortgage loan, the property you choose to finance is the most important factor after the finances. After all, this choice will have long-term effects both for the monthly payments you will make, the overall value of your investment, and most importantly, your quality of life. Here are the property details you must consider before taking up a mortgage in Singapore:
Your Long-Term Plan
Long-term plans will determine the right property for you. In the near future, are you going to start a family? Is your job relocating anytime soon? Or do you just wish to buy the property as an investment? Understanding your long-term needs and goals will guide your decision. If you’re planning to stay in the property for many years, choose one that meets both your current needs and potential future changes. If your goal is to rent out the property, select one that will appeal to renters and has strong potential for appreciation.
Location
In Singapore, proximity to important amenities like schools, grocery stores, healthcare facilities, leisure areas, your workplace, and other establishments can improve your quality of life. However, prime locations are always very pricey, and so you must balance between convenience and affordability.
While it’s tempting to opt for a home in a trendy, well-connected neighborhood, consider whether the property’s location will continue to offer long-term value. Areas that are currently undergoing development may experience rising property values, but it’s essential to research whether these areas will maintain their appeal over time.
Size and Layout
That doesn’t say, of course, that any house with more square footage is better. The utility of the space is what counts. Of equal importance is the property layout, as in Singapore, where any inch makes a difference.
Consider how many rooms you need based on your current activity and what you can see for the future. If you’re a single professional or a young couple who buys a house, a small unit may be enough. However, when you have children, you might need more. Assess if you and your family can move comfortably in the house. A well-planned layout will make the home larger and function better.
Age and Condition of the Property
The age and condition of the property are directly associated with the cost of maintenance and the long-term value of the home. Old homes or resale flats in Singapore might come with larger living spaces at a lower upfront price, but they will incur costly renovations to bring them up to modern requirements.
Conversely, a newly built-up can have modern availability and designs but for a premium price. When thinking of purchasing an older property, inspect every detail thoroughly to assess its overall state, especially plumbing and structural integrity. If the need arises for it to be repaired or renovated, factor these expenses into your budget and loan calculations.
The remaining lease period for Housing and Development Board (HDB) flats should then be checked. This can cause the value of an HDB flat to decrease when the lease falls under a shorter period, which could give them more problems in selling or refinancing in the near future.
Monthly Servicing Charges
If you’re thinking of buying a condominium unit, you should know that it usually comes with monthly maintenance fees for communal services. These are for facilities and services such as swimming pools, gyms, and 24-hour security.
Before committing to a property, it’s important to factor in these maintenance fees. While they might seem like a minor expense, they can accumulate over time and affect your monthly cash flow. Evaluate whether these fees are manageable within your budget and whether the amenities justify the cost.
Among others, HDB flats have condo fees for maintaining common areas and a fee that is collected by the town council. Though typically smaller than condo fees, it does add to your monthly costs nonetheless.
Aaccessibility and Connectivity
Living in Singapore, being close to public transport options such as MRT stations and buses willsave you valuable time and money. Alternatively, if you own a car, essential to be close to an expressway for those who drive.
Beyond transportation, consider how easily accessible the property is to basic amenities like supermarkets, hospitals, schools, or even play places. Not only does ease of access make life easier but it may factor in very well for resale value also. For instance, houses next to well-rated schools or business centers always fetch a lot of money.
Resale Factor
Even when planning to stay on a particular property for many years, you still have to consider resale value when purchasing it, as you don’t know what could happen in the future and might have to sell it. Some properties are viewed as having better resale potential depending on where they are, their size, and the condition that they are in.
In an investment purchase, the buyer would need to know more about growth and rental potential in the area. Property markets in Singapore are sometimes cyclical, so choosing a place of residence with excellent resale potential will give you peace of mind in case you need to sell it in the future.
Eligibility for Loans and Extra Costs
In addition to the property price, you have to consider the eligibility of a loan and what will cost you. The Singaporean government has several regulations requiring mortgage loans and setting some rules, like Total Debt Servicing Ratio, where monthly debt payments cannot exceed 55% of gross income.
Determine how much you can borrow from https://diocredit.com.sg or other lenders according to your savings. Also, do not overstretch yourself, as you still have to pay stamp duties, and legal fees beyond the down payment. Then there are other costs including renovations or repairs. Be sure that the total cost of the property fits comfortably into your financial plans.
Conclusion
Taking out a mortgage is a significant financial commitment that requires proper thought and other careful considerations. With an advanced, competitive property market, it would be smart to consider the location, size, age, and many other details about the property that will affect your immediate lifestyle and long-term financial security. Thus, after measuring the property’s features and comparing them to your personal and financial goals, you will be able to make the right decision with your property purchase.
