Growing up, we’ve come across myths about almost every aspect of our lives. Property is no exception. Buying a house is one of those milestones that is often filled with misinformation. It is important now more than ever that property buyers have all the information they need to make the best decision for themselves.
Here at Ohmyhome we believe in making things as simple as possible with accurate information to assist you on your housing journey whether it be to buy a house to live in or to invest.
We’ve compiled a list of the most common myths and debunked them so that you will make smart and informed decisions when you decide to buy a house.
1. When buying a house, nothing less than a 20% downpayment is required
By far this is one of the most popular myths out there that deter potential buyers from even taking that first step to becoming a homeowner. This myth is false. By law, only 10% of the buying price is required.
For example, if the property you’re interested in is priced at RM 700,000, you would only need to pay 10% of the amount (RM70,000) for the downpayment required to secure the property.
The reason that this myth is so prevalent is that buyers aren’t aware of the additional cost that they are required to pay, such as the stamp duty, application fees, valuation fees, legal fees, and insurance mortgage. Some of these costs are usually covered if it is a newly launched property – developers will absorb the cost as a means to attract buyers.
2. Putting down a larger downpayment is better in the long run
Unlike other myths on this list, this one entirely depends on the financial circumstances of the buyer. It is true that putting down a larger down payment then what is required would result in lower monthly mortgage repayments.
However, if you aren’t in a financial situation that permits a larger than needed sum of money to be tied up, then you should definitely not ‘pay’ by the rules of this myth. Exercise prudence and put down the 10% required amount, and apply for a loan with monthly installments you can comfortably afford.
3. It is cheaper to rent than to own
If you’ve just started to work at an entry-level position and don’t have enough funds for a hefty downpayment, then this myth is a fact, especially in the current property landscape of Malaysia. The truth is it’s only cheaper to own than to rent if your monthly home loan payments are the same amount as it would be to rent a place, and that is usually not the case for most Malaysians.
But don’t fret, there are property schemes options currently put in place by the Malaysian government out there for first time home buyers.
However, if you need to move or you’re looking to move, and buying a house isn’t a feasible option yet, then browse our non-duplicated listings to find your perfect home/ room to rent.
4. Waiting for the right age to buy a house
Like many things in life, it is never the right time because you have to make it the right time. If you are financially independent and can afford the downpayment and monthly loan payments then this myth is false.
The younger you are means you can apply for loans with a longer payback period, instead of a shorter loan tenure that will usually mean higher repayments. This way you won’t be putting a strain on yourself or your financial status.
5. Being ‘debt-free’ means I shouldn’t get a credit card
Many Malaysians are taught from a young age to only ever use cash for purchases, avoid getting a credit card, and to stick to a debit card. This way you will be debt-free, and applying for a home loan will be easier in the long run.
This is by far one of the most common false myths out there, not just for purchasing a house, but also for anything you may want to buy with the help of a loan. Banks will only be able to approve a loan if they know the candidate can and will pay them the monthly payments on time. Think of a credit card as a financial track record – it doesn’t matter what you use it for, it only matters if you pay the amount back.
A good tip to keep a spotless financial track record is by using the card to pay for utilities, such as your monthly water, electricity and phone bills. You can also put monthly membership payments for the gym, along with fitness and language classes on the card. This will demonstrate to the bank that you are consistent in monthly payments, however small the amount may be.
If you don’t have a credit card yet, be sure to sign up for one at least six months before applying for a loan.
Now that these myths have been debunked, why not take the next step and find your dream home with Ohmyhome?
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