If you’re planning on buying a home in the not too distant future, you’re extremely fortunate as the majority of Malaysians these days struggle to own one. Buying a home is a big investment, and requires careful financial planning. It’s a good idea to only buy a home if you can afford to pay the monthly loan repayments, as well as the maintenance bills.

Here are the main financial costs you’ll have to cover when buying a home.

1. Down payment

The normal minimum down payment for any property is 10% of the property’s selling price. However, some people are able to put down only 5% if the bank agrees to increase their margin of finance (housing loan) to cover 95% of the cost of the house.

The more down payment you pay, the less your loan amount will be. This down payment will have to be paid upfront during the house buying process.

2. Legal fees

To be clear, when you buy a home, you’ll have to deal with two sets of lawyers. One will manage the Sales and Purchase Agreement between you and the property vendor, while the second will manage the housing loan agreement between you and the bank. This means you’ll have to pay them separately.

Legal fees will also cover stamp duty, disbursement fee, 6% GST and reimbursements for land search and other tasks. Each fee will be about 2-2.3% of the value of the property. This means you should budget about 5% of the value of the property for your legal fees alone.

3. Property valuation

While the bank is processing your loan, they need to perform the valuation of your home. This will be done by an independent property valuation firm which you’ll have to pay by yourself apart from the legal fees.

The valuation fee depends on the size of your property and will be about RM1.10 to RM1.30 per square foot. Therefore an apartment that’s about 950 square foot in total will have a valuation fee of about RM1,000.

4. Home renovations

Whether you’re moving into a sub-sale property or a brand new one, you’ll need to do at least the basic renovations. The minimum fixtures will include curtain railings, lights and ceiling fans, as well as safety grills if the home is landed.

You’ll definitely also find little things around the home that require fixing like peeling walls, leaky pipes, broken tiles and such. Set aside at least RM1,500 to RM2,000 for these small repairs.

Major renovations can cost anywhere from RM5,000 to RM50,000 and usually involves installing kitchen cabinets and renovating toilets or redoing the flooring. Major renovations can be done gradually even after you’ve acquired the house.

5. Moving-in costs

When you move in, you’ll have to contact Tenaga Nasional and water bodies like Syabas to connect these utilities. Once you set-up an account with them, you’ll need to pay a deposit.

Tenaga Nasional, for example, charges RM700-plus as a deposit while water companies charge less than RM100. In addition, you’ll have to ensure that you pay other bills like Indah Water and taxes like quit rent.

If you’re buying an apartment, you’ll have to budget to pay your maintenance fee for the month too, which can range anywhere from RM100 to RM500. Let’s not forget that you’ll have to hire a moving van and movers as well.

This article first appeared in kaodim.com