Not everyone has envisioned themselves purchasing a property. Especially younger adults, or as we call them, the Millennials. A survey found that 39% of Malaysian Millennials were concerned about the unaffordable property market. On top of that, some Millennials choose to spend their hard-earned income or borrow to keep up with their lifestyle choices instead of saving for their future, such as owning a home.
Here are 5 mentality blocks that stop you from buying your dream home.
1. You are afraid that you may buy a house in the wrong location
Most of us place importance for our future home to be strategically located according to our needs, expectation or the potential growth of the place. Do you want a home with accessibility to your workplace, eateries, shops, relatives & etc.?
No one knows what the future holds for a particular neighbourhood, city or country. The only known factor is your expectations and hopes for your future home. In-depth research and your gut instinct will be helpful to alleviate those fears. Speak to real estate agents, friends, family, colleagues. You may also find useful information in property, economic and business articles. Nevertheless, only you know what's best for yourself more than they do.
2. Nothing fits me in the market.
The ones you want are too expensive. The ones you don’t want are within what you can afford. You may have come across the popular statement that the first property will usually not be the only property you live in forever. Buy one, start paying and a few years down the road, upgrade to a better unit and sell the current one or rent it out. The yield on rent is generally positive after a few years.
3. They are intimidated by the cost of owning a home
We can't escape from the reality that the true cost of homeownership is higher than many anticipate. You are expected to be spending a lot of money on interest payments, stamp duty, legal fees -- a belief that you will never see this money again. On top of that, you'll have to bear the cost of renovation.
It is now possible for you to buy your dream home without burning your wallet. Home Ownership Campaign (HOC) initiative by the government offers an exemption of stamp duty for memorandum of transfer and loan agreement on top of 10% discount on the purchase price. Developers are also offering incentives such as absorbing the legal fee for Sale and Purchase Agreement (SPA), offering partial or fully furnished unit, free gifts, etc.
4. It is more convenient and/or cheaper to rent
You may think it is more convenient and/or cheaper to rent because you don't need to bother about the long-term maintenance of a house, renovation and refurbishment cost in addition to the hefty fees of stamp duty or legal fees.
Identify whether you are going to stay at the same place for a long period of time or if you plan to move somewhere else before taking the next step to owning a home. While the journey to owning your dream home is filled with challenges, it is still worthwhile. Let's not forget there are financial aids out there to help you such as the HOC 2020 incentive or MyHome RM30,000 subsidy.
5. I can't qualify for a mortgage
Banks and other lenders will take great comfort in seeing that you have a track record of stable and continuous employment. It assures them that you should reliably be able to meet the monthly mortgage payments because the records show that your income is steady and regular. Banks will also want to see your monthly commitments and expenses to determine if you can reasonably afford to make the monthly mortgage payments.
Should you plan to purchase a home of your own, consider improving your financial health to prove that you have a stable flow of income and your expenses under control then the chances are better to qualify for credit facilities.
In conclusion, put aside the mentality blocks by doing lots of research from reliable resources. Sufficient knowledge will help you to gain confidence in paving the way for you to own a home.