4 Factors to Consider When Buying a House
For many of us Singaporeans, buying a home is probably one of the most important financial decisions they make in their lives. However, some among us may be too focused on working out the financial impact of buying a house and may or may not pay little or no attention to other factors. Below are some of them.
Factor 1: Consider the Long-Term Financial Impact of Renovation Details
Renovation may seem like a one-off expense but its financial impact can be long-lasting. For example, a home with both ceiling fans and air-conditioners installed gives its occupant(s) the option of using the fan on cooler days and using the air-conditioner on warmer days. This, in turn, allows the occupant(s) to effectively save money on electricity bills in the long run. Cheaper electricity bills also await homeowners who install mirrors and lights at strategic locations around the house can brighten their homes with fewer lighting, use instant heaters instead of storage heaters, use LEDs instead of incandescent bulbs and make it a point to use appliances with more ticks in their energy efficient rating.
Do consider how the sun affects the house as direct and constant exposure to sunlight could translate to higher cost in cooling off the interior.
Factor 2: Remember to Check the Neighbourhood
A home is a long-term commitment and it is important to make sure that one is comfortable in the neighbourhood and its facilities. A light sleeper or one who is sensitive to noise may prefer a quieter environment away from the traffic even though it could mean commuting a longer distance for work. Similarly, one who plans to have children may wish to settle in a residential area close to kids-friendly facilities and schools. If an elderly family member's convenience is of high priority, you may consider a residence surrounded by a higher number of mobility-friendly facilities.
Factor 3: Existing Problems That May be Costly to Rectify
There could be hidden problems to look out for before making the purchase.
A major existing problem in the house would be unresolved water leakage and seepage. Other existing problems such as damaged air con units, missing tiles, or cracks on the floor, etc, might be resolved if you are going to renovate anyway, but if you do not intend to renovate these areas, you need to be extra careful when inspecting your potential purchase. These issues may be costly to fix and taking the time to check carefully prior to purchasing the house can help reduce the buyer's exposure to hidden costs in future.
The above are key factors that can have a long-term financial impact on buyers. As a bonus, we have also added a key factor for you to consider.
Bonus Factor: Don't Overlook Professional Financial Consulting Services
Proper financial planning gets you into a good financial position to purchase a big-ticket item such as a home. A professional and independent financial consultant would come in useful when considering mortgage coverage - a powerful tool to reduce, or eliminate, the financial burden on a family should the one(s) shouldering the repayment of the home loan pass on unexpectedly.
Being industry professionals, financial advisers are more familiar with the mortgage-reducing-term-assurance (also referred to as "MRTA") products available in the market. They can help answer questions you may have, including but not limited to how much MRTA coverage is sufficient and what are their different characteristics.
It is highly recommended that one engages a financial advisory firm, like Financial Alliance, that has a client-centric approach and an independent status which ensure that the financial consulting services provided will be in the clients' best interest.
In addition to providing advice on home mortgage coverage, independent financial advisory firms like Financial Alliance also offer a variety of financial consulting services such as writing a will in Singapore or creating the best-possible retirement plans. Hence, individuals in Singapore who wish to have a variety of financial matters settled may benefit greatly from the consulting services provided by independent financial advisory firms.
Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek independent financial advice that is customised to their specific financial objectives, situations & needs.