What is my budget to buy a property?

Hi bro, now I'm willing to know my budget.

Now you are getting serious to buy your home ya Owluu. Okay, let's talk about the financial part. Let me show you this image first:

If my salary is above RM7,000, how much is that?

About that part, maybe you can calculate that in 10 years, ok?

Hehe sorry, bro. But, hopefully, it could be in the next year...

Ok, but anyway you may have some image. When you will buy a house, you will take a housing loan, right? Do you know what percentage you could get?

Since I’ve never bought any property, I could get 90%, right?

Bingo! 90% borrow from the bank and you should prepare the 10% as the down payment.

Downpayment?

Yes, you should pay 10% of the housing price upfront. It’s called downpayment. Ok, see this big chart.

Oh, I see. The monthly installment is from the housing loan, right?

Maintenance cost should also be considered.

But what’s the miscellaneous cost? 

When you purchase a house, it requires legal documentation. Thus, you need to pay the loan legal fees for the SPA (Sale and Purchase) and loan agreement, as well as the stamp duty and disbursement fee. Here's a quick reference: 

This means, if I want to buy an RM500k house, I need to save RM50,000 for the down payment and RM20,750 for the miscellaneous cost. So, the total is around RM70k, correct?

I can say that based on industry average. If you have more savings, actually it’s quite good for you in long term.

What do you mean, Kawan?

Because your loan amount will get less. This is a simple comparison:

Wow... I can see the gap.

I know I share this with you, Owluu. It also depends on your purpose. Let's say you intend to sell the house in the future, it is better if you keep the cash and apply for a 100% loan of the house price.

I see. I'm getting overwhelmed... I'm a single core.

Stimulate your target budget based on your income. You can read this if you want more details.

Thanks, Kawan. I will properly do the math hehe!