Is Buying a Home Affordable for Young Couples?

Many young couples in Singapore team up to afford to buy a home. Singaporeans have a unique marriage proposal that goes along the line of “Want to BTO?”. Built-to-order (BTO) flats are an affordable way for young couples to buy their first home together. They have subsidized flat prices and offer more ways to save money to make home purchases.

As BTOs have long waiting lists, HDB resale flats are also a popular choice, but these do not get subsidized, so they are a bit more expensive. If you are a young couple looking for some tips and tricks on how to afford to buy a new home, check the list below. 

• Have a Plan

Doing your homework first makes buying a home that much easier. You should decide what type of house you want to buy. Do you prefer living in an apartment, or do you like properties with a backyard? Do you want to live near amenities? These are just a few things you should consider.

It’s better to discuss in advance, as you might have different wants and needs. You should also consider if you want to start a family together as you will need more space, another extra bedroom, a backyard and so on.

• Make a Pros and Cons List

Even if you have made some key decisions, you should also have a clear picture of your priorities, especially when choosing which estate to live on and what kind of property you want. Having a plan is just half of the process when it comes to getting an affordable home. 

It’s easier to make a pros and cons list, so sort out your key priorities. For example, you can consider living next to the grandparents should you ever need help with your kids. Another important element is if you want privacy or live close to amenities. This list will help you decide what you both want, and it will narrow down your search.

• Know Schemes and Grants

If you are considering buying an HDB flat, knowing which schemes you’d be purchasing under can help you make a more informed decision. You can filter your property search if you know what kind of property you can buy. 

You can also be eligible for grants, which will reduce the cost considerably. There are a few grants you can apply for, like the Family Grant, and you can get the maximum payment if both partners are Singapore citizens. If one is a Permanent Resident, the grant will be less.

You can also apply for the Proximity Housing grant if you want to buy a resale flat to live near your parents. If these grants sound confusing and you aren’t sure you qualify, you can complete a questionnaire to assess your eligibility.

• Build Your CPF

In Singapore, certain upfront payments can be paid from your CPF Ordinary Account (OA), whereas others, such as the Option-To-Purchase (OTP) fee, are payable in cash. If you are a Singapore citizen you can contribute to your CPF, a comprehensive savings system, to accumulate savings.

You can use these savings for a home, to get healthcare, and have a stable income when you retire. As you build your CPF, you might be able to afford a down payment using the savings system.

• Choose the Best Loan

The best way to pay the mortgage on your new house is to get a home loan through a site like PropertyGuru. PropertyGuru partners with all the major banks in Singapore, and they offer financial advisors to talk you through your best options. This site also has a mortgage affordability calculator should you want to calculate how much loan you can take out.

There is no best home loan in Singapore. They cater to different types of people for different needs and risk assessments. There are a few criteria you should consider when getting a loan. You should decide if you want a fixed interest rate or a variable one; discuss the lock-in period and many other things. 

• Research and Negotiate

It’s salient to do your research first before signing anything. There are lots of terms and conditions you will need to read when applying for anything house related. There are many steps involved in buying your own house, but gradually, you will get there.

If you choose not to go through an agent, you will have direct contact with the seller. You can negotiate with him and persuade him to sell the house at a much lower price. Don’t be afraid to negotiate, as the outcome can be worth it. If you buy an HBD flat at the market evaluation of the unit, then you won’t need to pay the Cash-Over-Evaluation (COV) fee.

At first glance, the process of getting a new house as a young couple can be complicated, expensive, and never-ending. In reality, with some planning, research, and a good amount of effort, it’s possible to secure a property to meet your needs.