According to HSBC's first Beyond the Bricks study, only one-third of millennials (those born between 1981 and 1998) can afford to own a home. Yes, you read that right.
This is due to the increasing house prices and sluggish wage growth.
Based on the survey, Malaysian property prices rose by 3.2 percent in 2016, while wage levels rose by only 3.9 percent in 2017.
Excessive spending is also caused by failing to allocate funds for the extra expenses of homeownership that go beyond the purchase price.
So, will millennials be able to buy a house? Fret not, here are 4 ways for gen-z to buy a house or select the house that they can afford, by knowing how to get a down payment for a house.
1.Make a plan and figure out how much you'll need.
Debt service ratio is a key part to determining whether you are eligible for a housing loan. Debt settlement, auto loans, personal loans are some of the factors that will affect your debt service ratio. The remaining disposable income is used to determine how much you can pay for the loan you applied for. How much cash do you have to raise to buy a property worth RM700,000? Can you pay the down payment or monthly payment along with your current financial status? Can you get a loan for that much money? Once you know how much loan you can borrow, banks will calculate your debt service ratio. To achieve your goal, it is best to be specific with your budget.
2.Do not overlook the additional costs associated.
You should always strive to be accurate with your budget to take into account many unexpected costs that may come your way. Numerous different expenses associated with home ownership include legal costs, stamp duty fees, and land tax, to name a few. These may add up to tens of thousands, which is significant to the overall cost of home ownership. Healthy cost-cutting habits will also come in handy to prevent you being caught off guard by the sudden realisation that you don't have enough savings to fund these miscellaneous expenses.
3.Get your home loan pre-approved
There are five things you need to get pre-approved for: proof of assets and income, good credit, proof of employment, and any other paperwork your lender may need. This entails using a digital approach to determine how much of a home loan you can get approved for before approaching banks. How do you calculate the down payment for a house? Click this link to calculate: https://www.seripajam.com.my/loan-calculator . It is desirable to use solutions like this rather than completing the full loan approval process only to discover that your loan has been turned down (due to the property being more costly than you can manage) and that your credit report has been tainted.
4. Boost your monthly income
One great way to increase your income is by starting a side hustle. A side hustle is a part-time employment that you conduct "on the side" in order to supplement your income. Among the many methods to earn money outside of your regular profession, starting a side business might be a worthwhile option. You may use the business skills you learn as an entrepreneur to other elements of your career. You might also attempt freelancing work or consulting, which would allow you to put your existing skills to work solving problems for other businesses.
Should millennials buy a house? How about house loans for millennials? For many, buying a house is one of the most significant financial milestones in their lives. At Seri Pajam, you can own a home for just RM1000 per month! Click here https://www.seripajam.com.my/onlinesale to choose from a variety of projects. Find the right house that suits your budget and ability and also check what kind of houses are other millennials buying.