The Buying Process - a Step-by-Step Guide
Before buying a home or property, you must first understand the basics of the buying process. Here is a simple guide extracted from the book ‘Buying Property Like A Pro’ by Miichael Yeoh.
Calculate how much you can borrow from the bank so you ensure that you buy within your capability. Normally, from the time you pay the deposit to the time you sign the Sales and Purchase Agreement (SPA) is 14 days.
Next, you put a deposit down on the house that you would like to buy. Submit your loan to your chosen bank. If you are not confident that your loan will be approved, submit to another 2 or 3 banks as insurance.
General documents you will need to prepare for the banks upon application:
- Photocopy of your Identity Card
- 3 months latest payslips
- Latest 6 months Bank Account
- Latest EPF Statement
- Income tax declaration with a tax receipt
- Any other bank accounts with good balances such as current, Fixed Deposit and etc…
- Proof of any additional income
Some banks might ask you to produce some other documents
The smart way is to look for a bank first before paying the deposit. Do not sign a SPA before knowing you that you can get a loan or risk losing money. There is no 100% guarantee that you will be approved for a loan.
When it comes to signing the Bank’s Letter of Offer, make sure you read through all the terms and conditions especially the fine print which is really ‘very fine’. You can ask your banker to go through point by point with you until you thoroughly understand what you are signing.
Sign your Sales and Purchase agreement and letter of offer from the bank.
When you sign a booking form and pay a deposit, usually you will have 14 days to sign the Sales and Purchase Agreement and most of the time this is not enough time for you to get approved for a loan. Keep in mind you need time to also prepare all of your financial documents for the banks. What if you are rejected? You risk losing your deposit so remember to first find out how much you are eligible for and never go over budget.