Being the sole breadwinner of the family, owning his first home has always been one of Mr.T’s biggest milestones in life.
Mr.T works as a sales executive in Bangsar with a basic salary of RM5,500. From his sales commissions, he could get an extra RM500 – RM800 a month.
He lives in a 3-bedroom apartment in Damansara Perdana, paying a monthly rental of RM900. With two little children on the tow, his monthly expenses can easily eat up a huge chunk of his salary.
However, he’s able to save a little from not having to send the kids to daycare thanks to his lovely home-making wife.
Mr.T shares the common dream of many a husband out there; to provide quality life for his family.
With that in mind, he practiced a healthy spending habit like bringing home-cooked lunch to work and going out shopping only when it’s necessary. The family would go on holiday trips once in a while, but made sure not to overspend by going to local attractions.
These may sound insignificant to some people but by monitoring expenditures closely, he’s been able to construct a good long-term plan which involves buying a big asset – a home.
So, Mr.T executed his plan in September 2019, starting with checking his home loan eligibility on Property Guru’s Home Loan Pre-Approval website.
He found out that he could get a home loan up to RM300,000, so he immediately narrowed his options down to properties within this budget.
When looking for a house, Mr.T had some specifications in mind. Knowing that RM300,000 won’t promise him fancy condo facilities, he aimed for the more important and practical aspects – freehold title, gated and guarded, personal parking space, nearer to the city centre and easy access to public transportation.
One day, he found an online listing of a very decent low-density apartment unit in Cheras, Selangor. The property ticks all the boxes with an asking price of RM280,000.
It’s in the sub-sale market, situated within a matured area with plenty of amenities nearby. It was developed some 20 years ago, when the seller purchased it for only RM90,000 back in 1999.
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Sub-sale is basically ‘second-hand’ properties. Why not buy a brand-new developer’s unit?
Simple – sub-sale properties tend to be cheaper and located nearer to the city center. They are usually located in matured townships with amenities like schools and public transportation.
However, Mr.T realized that sub-sale properties typically require the 10% downpayment as the seller would usually be an individual, not a corporation or company that can offer attractive schemes and rebates.
Putting his feet down after weeks of home-hunting, Mr.T contacted the agent that put up the listing and paid RM1,000 first as booking fee. Then, he’s off to find a bank that offers the best interest rate.
Once his home loan of 90% financing with 4.3% interest rate p.a. was approved, he proceeded with the downpayment of RM28,000 in cash. His booking fee was returned and his sales & purchase agreement were processed by the agent.
He received his new home key about 1 month later.
With a combination of hard work, frugality and some EPF withdrawal, Mr.T managed to accumulate enough money to move in to his dream home.
He allocated some RM40,000 (RM28k downpayment + RM12k renovation cost) before deciding on the purchase. His monthly mortgage repayment from now on for the next 35 years is about RM1,160.
Currently, he’s busy renovating the empty 900-sq.ft. unit with new kitchen cabinet, furniture, lightings, fixtures and the usual paint-job for a fresh start. The family will move in by the end of January 2020.
“When you’re just starting out in purchasing a home at a young age, it’s okay to settle down for the less fancy option. As you improve in life, earn more and have lesser burden, you can always upgrade. There’s no need to rush,” says Mr.T.