Bank Rakyat shares eight tips to consider before applying for a home financing 

Buying a first home is a major milestone but it also brings a financial commitment that can extend across several decades. Before considering paint colours, furniture or moving arrangements, first-time buyers should first assess whether they are financially prepared for homeownership.

Here are several practical tips first-time buyers can consider to better prepare for the financial responsibilities involved.

• Review monthly income, existing financial commitments, savings and regular household expenses before deciding how much to spend on a property. The amount a buyer may qualify to finance is not necessarily the same as the amount that will feel manageable every month.
• Review the CCRIS record and ensure existing financing commitments are well managed. This can help provide a clearer understanding of financial standing before submitting a financing application.
• Buying a home involves more than the property’s selling price. Buyers may need to account for a down payment, legal costs, valuation fees and other purchase-related expenses. Building sufficient savings can make these upfront costs easier to manage.
• Consider the property’s location, accessibility, amenities and price, as well as whether it will continue to suit household or lifestyle needs as circumstances change over time.
• Consider both the monthly instalment and financing tenure carefully. A longer tenure can reduce the monthly instalment amount but it also means carrying the financing commitment for a longer period.
• Compare different home financing options, including profit rates, financing margins, payment terms and eligibility requirements. Understanding the differences can help identify an option suited to individual financial circumstances.
• Before applying, check the eligibility requirements and prepare the necessary supporting documents, including identification, income records and information relating to existing financial commitments. Having these ready can make the application process more straightforward.
• Maintain an emergency fund and allow sufficient financial flexibility for changes in income, family expenses and other commitments. Homeownership is a long-term financial commitment, so planning for the unexpected is equally important.

Financing option for first-time buyers

Once financial readiness has been assessed, the next step is to consider financing options designed to support first-home ownership.

For eligible young adults purchasing their first property, Bank Rakyat’s Home Financing-i My 1st Home Scheme offers financing of up to 110%, including Mortgage Reducing Term Takaful (MRTT), legal fees and valuation fees.

The financing period is available for up to 35 years or until the applicant reaches 70 years of age, whichever comes first. The scheme may also be used for properties that are under construction, completed, auctioned or purchased through the sub-sale market.

For first-time buyers, securing financing is only one part of the homeownership process. Equally important is entering into the commitment with a clear understanding of the long-term financial responsibilities involved. 

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