Hi all. Throwaway account. Seeking for advice.

So, here's the context:

Me and family (grandma, mom, and I, plus 2 cats) are still renting at a Selangor suburb double-storey terrace, RM900 a month, for almost about 5 years now. (we also have been renting all our lives, but at other places. This house has been the longest since.)

So we have been planning to buy a house for our own stay.

Mom is a single mother since we were kids, and has been a bankrupt ever since, so cannot buy house. She is still working, self-employed, making abt RM1k - RM2k a month. Siblings have moved out (renting also) close to their work.

So I have just started working at a private company, for almost a year now. So I carry the responsibility to buy the house. And I want to. Really wanna live in a house that we can call our own. (siblings willingly agreed to also chip in the monthly repayment though)



My profile:

26 y/o f single, fresh grad

Net pay is RM3000, office in Klang Valley

Commitment: credit card (5% of credit limit is RM175). No other commitment.

Budget: <RM320k. But mom has always wanted a landed house in Selangor. But about that... ok more on that later.



So, we went house hunting for months, did our "research", went to rumah contoh and all that. Long story short we placed a booking for a townhouse project KITA Mekar at Cybersouth. Agent submit loan.

- Selling price: RM419,900.00 (I know! So out of budget. But its like the cheapest for a landed house in good area of Selangor and the agent said there's a possibility of my loan being approved.)

- Nett price after discount: RM369,910.00

- Zero d/p, free legal fee, loan fee, MOT. Booking: RM500.00

- Free kitchen cabinet

- Malay reserved land; 1,346 SF, 4BR + 2B + store + yard (townhouse lower unit)

- Year of completion: Q2 2024

- Distance to/from work: 36 km, 45 mins (MEX) Toll: Up to RM11 per day.

- By then the MRT Cyberjaya will be in operation so can take MRT.



So after a while, we thought, ok let's also opt for high rise since its more ngam with our budget. I applied RUMAWIP (mom didn't really quite like since its in KL. I like, because its closer to work. But after thinking about my mom and grandma, the house is not as comfortable for them to live long term). And then we found a project that make us reconsider our life choices. Residensi Adelia 3, Bangi Avenue.

- Selling price: RM338,000.00

- Nett price: RM304,200.00

- D/P: 10%, Rebate: 9%. So deposit only become 1% which is booking: RM1000.00, upon sign SPA: RM2,380.00

- Free furniture (3 aircond, 3 wardrobe, 3 water heater, kitchen cabinet and tabletop, fridge, TV 32 inch, cabinet TV)

- Freehold; 1045 SF, 3BR (2 master bedroom) + 3B + yard + balcony

- Year of completion: Q4 2024/Q1 2025

- Distance to/from work: 37 km, 45 mins (PLUS) Toll: Up to RM3 per day. But jammed as hell I think.

- But can drive to MRT Kajang and take MRT.



We already placed a booking for this project also. Fully refundable. I know, we made impulsive decisions . Agent said after some weeks we can choose unit, and then agent will submit loan. We like this project because it has 2 master bedrooms, which is perfect for all 3 of us. And the location. The town is more matured there. But for our cats... kinda sad la because our cats have been living the fabulous "landed" life for all their lives also (they love playing outside).



Fast forward to now, the loan for the townhouse is approved under condition:



- Loan 100%

- MLTA RMxxxx

- MRTA RMxxxxx (30+0yrs)

- Total loan RMxxxxxx

- Rate 3%

- Tenure 35 years

- Repayment RM1,688

- FD pledge RM 20k, for 5 years (btw what does this mean? Tried googling and reading but not quite get it)

- Because loan is 100%, we will get 10% cash (around RM50k) on key collection.



Our concerns are:

- The repayment is too high. Although my siblings agreed to chip in, but there's really no guarantee we can rely on that. And not even including utilities, wifi etc yet. And my DSR also will be high too.

- Scared if we don't sign this loan offer, and then what if loan for project Adelia also not approved.

- After some calculation, let's say the loan for Adelia is approved under SAME condition as above, the monthly repayment can be up to RM1341, so quite a difference there. But that is if its under the same condition. The lowest repayment, (90% loan) is RM1170. Oh and the maintenance fee is also quite high, RM200.



Other thoughts:

- Townhouse in Selangor for that price is actually really worth it. "2 years later, for RM369k can only get studio, nak dapat townhouse tak mungkin lagi. 2 years later when you see the property price, you might regret. The best time to buy a property is 10 years ago, the 2nd best time to buy is now". These are the words from the agent. Deep down I kinda agree, it's a great asset but at what cost? Ikat perut to pay monthly Although the repayment starts upon key collection, which means in 2 years time, and probably my salary also increase (but who can guarantee, I also just started working). Yea, all is risk. High risk high return gitu. But, I really don't know to decide now.



So my dear Malaysians, I would like to seek for your advice, thoughts, and anything that you can share with me. I really appreciate it.

Thank you.

Conservative advice:

At this point of time, your finances and job stability is a bad time to commit to a home loan.

I'm assuming since you've just started job, you haven't had emergency savings planned, and you have a parent to care for.

Siblings promising to chip in is not enough, you never know in the worst of times what might happen.

The way you've worded it "carry the burden" sounds like your other siblings either unstable job security or high financial commitment. It's best not to guarantee on their promises to chip in.

26 years old is still quite early to commit to a home, at least 4+ years can still qualify for high tenure, give yourself those few years so you can build savings and security slowly to get a home.

RM900 rental for a house is pretty dang cheap, it's more worth it to rent for now.

Malaysia current property market is still on the high side relative to median income level, there's no rush to buy new houses. Affordable housing like RSKU RumaWIP etc. has a "generous" upper limit of RM5k income monthly, which tells you that even RM5k you can be considered in B40.

There's always a healthy subsale market you can tap into, or auction if you're willing to research.

Give yourself time and buy a proper home, since you're getting own stay. The fact that seeing the instalment on a relatively low priced home is already making you think twice is not a good sign.

FD pledge usually means you need to open an FD with the bank, deposit RM20k in it, and set the tenure for 5 years to use it as collateral for your loan.

This post has been edited by DragonReine: Apr 3 2022, 06:44 PM

How reliable are the siblings when it comes to helping you out? After a while, will they think "why so sohai to pay for his house"?

Also, 36km journey can be taxing.

ready another 15-30k to move in

do you have emergency saving? your grandmother is old and need to prepare emergency fund for her health. Also don't rely on your "future salary" because nobody will guarantee anything about raise, u might lose your job in the next 2 years, who knows? better save up your money for a few years more then only start to commit to a house.

I am sorry to tell you, i only commit into housing loan worth of 400k when my salary reached 5 figures. for 3k kind of salary, even a rumah wip is far fetch. you will have financial problem once commit into the loan. Dont forget other commitments which can easily suck up 1k from your net salary such as duit dapur for your mom and grandma.

Simple math, your net salary is just around 2.7k, do you have health insurance? how about your mom and grandma? do you have other commitments such as internet? travel expenses? mobile phone? household expenses? car maintenance inclusive schedule and preventive maintenance? pet expenses?

Beside the above mentioned, you will have to consider extra fund for house reno, kitchen setup, furniture, perhaps aircond? Also, in coming 5 years of ownership, do you have extra fund for house fix for water leaking? damaged walls. tiles and even maintenance and sinking fund assuming its a strata title.

2.7k per-month is too high risk to own a house, even owning a Perodua Axia, it will easily suck up half your salary for hire purchase monthly repayment, petrol, tolls on monthly basis.

This post has been edited by mypalm79: Apr 6 2022, 09:49 AM

yes...have to agree with most comments here....

I am holding 1 house and sold off 1 house before. your income is still raw and quite unstable to own a house.

Just remember this....you need at least 10-20k on hand because owning house is a money pit....the hidden (non-upfront) costs will really drain financially, emotionally and mentally for some.

I always told my friends....buy a house if you are prepared to be broke but able to absorb the hole in the pocket.

This post has been edited by toffeemoose: Apr 6 2022, 09:35 AM

"True words are not pleasant; pleasant words are not true".

The truth to your current condition - you cannot afford this property with your current salary. It was an impulsive/ emotional decision.

You are ready for your 1st house when this conditions are fulfilled:-

1) Able to fork out 10% down payment.
2) The monthly commitment of your installment < 1/3 your net salary. Anything more than this, you will be choked financially & don't have room for contingency.
3) Additional 5% for the legal fees ( loan agreement, SPA, MOT).

Current market, the rental is dirt cheap, the landlord is subsidizing for tenant rent ( the rental cannot cover landlord monthly installment to bank ).

Just rent until you are financially ready. If you were to remove all the emotions in this decision making (ego, sentimental, etc), decline the signing. Let the booking burn.

This post has been edited by nihility: Apr 9 2022, 12:10 PM

Rent first until your salary can hit around 4k+ at least. Don't let housing loan be more than 40% of your DSR if possible.

Hi TS,
The fact that you are here on LYF deliberating with forumers shows that your guts are telling you not to pursue with the house purchase although your pride is telling you otherwise.

Let me just share that I totally understood your feeling. I grew up in the bottom of B40 family. My father was a taxi driver, my mother was a housewife. I used to stay and grew up in low cost flats. Fast forward to today, I am now 34 years old, earning 34k/month and currently owned 3 properties (all condos though)!

And this is my advice to you:
1. The first thing you should do is invest in yourself. Earning rm3k is not too shabby, but ultimately set a target plan- do you see yourself getting promotion and perhaps doubling your salary in 3 years time? Your income level and the price of property you are buying goes in tandem, and you should plan your purchase based on your vision of salary expectation .
2. You will also need to take baby steps before you purchase your first property. I feel that you are heading towards financial suicide if you aren’t prepared. OPR is expected to increase by end of the year, and if you are feeling pinched with current low interest rate, you will feel much worse when interest rate goes up by 1% or more. The worst thing that can happen is that several years later you are not able to sustain the loan, you will then need lelong your house and become a bankrupt yourself.
3. Baby steps in financial planning. First -save a minimum of 6 months of expenses. This money can come in handy in case of bad economic situation, retrenchment, etc. Second, aim to reduce your deductible income tax by purchasing medical insurance, takaful, PRS, etc based on your income level. Third, save an amount equivalent to 10% of your target property price. If you are planning to get a 400k house, you will need the 10% for the renovation /furniture and miscellaneous fees. You will need easily 25% (10% downpayment, 5% spa/legal fee and 10% for reno/furniture) if it’s subsale house.
4. At the end of the day, let’s face the fact. Your siblings will not be included in the SPA. They do not have a stake in the house. Do you think they will continuously “chip in” if they do not have monetary benefits eventually? After all, they have their own lives and families to take care of.
5. And finally, you can always take advantage of lelong property. A few years later, once you are financially in a better position there is a decent chance you can pick up the same property at a lower price through auction. I have seen my first condo getting transacted 10-20% cheaper via auction soon after VP.

This post has been edited by Avenger_2012: May 7 2022, 01:12 AM

Malay reserved land, dont expect future price will appreciate much