02| A Hilarious Guide to Budgeting for Your Dream Home

Oh, the joy and excitement of buying a property! It's like embarking on a wild adventure with a hefty price tag. Brace yourselves, folks, because we're about to dive into the world of housing budgets. Get ready for some financial fun!

1. Down-payment Dance:

Picture this: you've found "the one" - your dream home. But before you can move in, you'll need to perform the legendary Down-payment Dance. It's customary to shell out around 10% of the property price as your down payment. Consider it your initiation fee into the homeowners' club!

2. Booking Fee Boogie:

If you're buying directly from developers, they might throw a curveball at you in the form of a nominal booking fee. It's like a pre-order for your dream home, and it's usually less than 1% of the property price. Just make sure to find out if it's refundable, or you might be doing the refund rhumba.

3. Earnest Deposit Shimmy:

For those purchasing a sub-sale property, get ready to shake your hips and pay an earnest deposit. It's a 2-3% slice of the property price that the property agent will collect. Negotiate wisely, my friends, as you might be able to boogie your way to a refund if your loan falls through.

4. Progressive Interest Salsa:

If you're buying a home under construction, be prepared to add some spicy salsa moves to your budget. Progressive interest is the rhythm of payments you'll make to the bank during different stages of construction. Banks will release the loan amount to the developers as they hit milestones. Don't miss a step on the payment schedule set by the Ministry of Housing and Local Government.

5. Legal Fees Twist:

Once you've committed to your dream home, it's time for some fancy footwork with a lawyer. They'll help you prepare the Sale Purchase Agreement and loan facility agreement. The legal fees for the Sale Purchase Agreement depend on the property price, while the loan facility agreement fees rely on the loan amount. Cha-cha your way through the prescribed scale rate under the law.

6. MOT Stamp Duty Waltz:

Before you can officially own the property, you'll need to glide gracefully through the Memorandum of Transfer (MOT) Stamp Duty. Your lawyer will ensure all obligations are met, and the property has the necessary title. Once the dance is complete, your lawyer will submit the MOT to the land office for registration. Voila!

7. Loan Agreement Stamp Duty Breakdance:

It's time to bust out some breakdance moves with the Loan Agreement Stamp Duty. This agreement sets the terms and conditions for your mortgage. Groove to the beat of the lender's agreement, usually a bank, as they're prepared to loan you some serious cash.

8. Mortgage Insurance Macarena:

Shake those hips, because it's time for the Mortgage Insurance Macarena! This insurance offers peace of mind in case of illness, disability, or death. While it's not compulsory, it's highly recommended. Choose between Mortgage Reducing Term Assurance (MRTA) and Mortgage Level Term Assurance (MLTA). And the best part? You can add the insurance cost to your loan amount and keep on dancing!

9. Valuation Fees Cha-Ching:

Before you can own your property, a valuation firm will give it a once-over. If you're buying from developers, they foot the bill for this cha-ching dance move. But if you're buying a sub-sale property, you'll have to include the valuation fees in your budget. Cha-ching!

10. Utility's Deposits Rumba:

Now that you have the keys to your new kingdom, get ready to pay deposits for utilities like water, electricity, sewerage, and the internet. It's like dancing with the utility companies - just don't step on their toes!

11. Renovation and Furnishing Tango:

Time to tango with your renovation and furnishing costs. From a conservative estimate of 10% of the property price to jazzing up the kitchen and bathroom, these costs are all about personal flair. Don't forget to add furniture and fittings to your dance routine. Salsa your way to a well-decorated home!

12. Assessment Tax Break:

Just when you thought the dance marathon was over, the local authority swoops in with the Assessment Tax (Cukai Pintu). It's their way of collecting funds for public infrastructure maintenance and upgrades. Pay this tax twice a year, and remember, each state has its own dance moves!

13. Quit Rent Jive:

Don't stop moving yet! Every property owner must perform the Quit Rent Jive annually. This dance requires paying the relevant state Land Office. Keep the rhythm going, my friends!

14. Home Insurance Hoedown:

If you own a strata title property, the Home Insurance Hoedown is covered by the Joint Management Body or Management Corporation. But if you have an individual title property, consult an insurance agent to find the right home insurance for you. Let them do their cowboy job while you kick up your boots!

Conclusion: The Grand Finale!

When budgeting for a sub-sale property, reserve a minimum of 15% of the property price. This includes your earnest deposit of 10% and the remaining 5% for legal fees, stamp duty, and other expenses. But hey, if you're going for a new project, the required funds may be lower, around 5% of the property price, thanks to developer rebates. Just remember, there are still a few dances left, like progressive interest, the Memorandum of Transfer, deposits, and insurance. Keep your budget boogie going strong, and you'll be rocking your dream home in no time!

Now, go forth and conquer the property dance floor, my dear readers! Happy budgeting!