4 Financial Planning Tips for Buying Your First Home

As my readership grows right in front of my very eyes, I am asked to cover different topics that are not only for those in the US, but those considering moving and buying abroad.  While these tips have a specific country designation assigned, I think they are a good example of tips to consider when beginning your home search.  Like everything in life make sure to do your own research and make a decision that works best for you.



There are various types of factors to take into account when you’re embarking on a search for your new home. Part of this has to do with the facts and figures of the property market, while the other end of the equation is finding a residential property that meets all of your needs. This will depend on where you want to live in Singapore, what your current residential status is, and how many people are currently in your family. There are different requirements for purchasing real estate for temporary expats, for example, those who cannot lawfully own landed property unless meeting particular requirements and becoming a permanent resident. On the other hand, if you’re a permanent resident and this is the first time you’re purchasing a home, you will find that you’ll be eligible for many governmental incentives. These also have their pros and cons, though. Here are four tips for how to financially plan your move as you begin a search for your new home.


Start with Solid Information


One of the most important things when you’re searching for mortgage packages are hard numbers. Before you even start considering properties or searching for homes, you’ll want to assess exactly what type of price range and financial commitments your budget will allow. If you’re looking for a mortgage calculator, PropertyGuru Singapore has some useful tools to help would-be buyers compare rates and assess the feasibility of buying based on individual resources. You’ll need these figures either from your financial portfolio or bank to get started, so make sure you’re entering the numbers correctly. This will immediately narrow your search to focus on properties in locales that you can afford. There’s no point in searching on a real estate portal for properties you can’t afford, especially if you’re easily tempted.


How Much Can You Afford for a Deposit?


This is one of the most important questions you’ll need to determine when you’re choosing a mortgage and how much you’re able to commit to spend on a home. If you don’t have anything saved for an initial down payment when you take out a mortgage, then the simple fact is that you’re probably not ready to own property. There’s also frequently a deposit requirement from the bank when taking out a home loan to ensure that you’re not going to default when you can no longer afford the payments, but this varies from bank to bank. You’ll want to check with your financial advisor if you have one about this requirement, or speak with a bank representative.


Deciding on Lock-in Period Versus


The decision on whether to take out a home loan with a lock-in period (fixed rate) versus one without is one of the trickiest choices you’ll make in this process. While lock-in periods often offer attractive rates that won’t fluctuate once you’re bound by the mortgage, at the same time, should rates lower further or if you find a package with better terms, you’ll no longer be able to change your mind without severe penalties and other issues. According to Yahoo! Finance, there are some benefits to opting for a home loan without a lock in period, since it provides flexibility and the option to change your package if you find a better deal somewhere else. This depends a lot on whether you want guaranteed stability versus the ability to shop around if something better comes along.


The State of the Real Estate Market


The New Paper details how SIBOR fluctuates with the federal reserve of the United States, and given measures to increase interest rates this past January, Singapore interest rates are also set to rise. However, the good news is that the rise looks to be steady and not an unmanageable amount, and actually puts many interest rates on par with what they were before the housing rates dropped lower than ever before. Therefore, although rates are slowly increasing, that doesn’t mean that it’s actually a bad time to purchase a home. If they were skyrocketing and all over the place, then perhaps it would be wise to wait, but you can also avoid this issue by locking into a mortgage at a set rate. It’s all a matter of deciding what you want to do in the long-term.


Home-ownership is not only a complicated decision to make, but it’s also a long-term commitment. Nonetheless, as long as you buy at a wise time and take advantage of current deals and trends within the real estate sector, you’ll be sure to acquire a home that you’ll enjoy. A good rule of thumb is also to enlist the services of either a financial advisor or realtor, or both if you can afford to, who can guide you through the processes and legalese of purchasing real estate. There are often fees and other costs on top of just the purchase price which you may not be aware of, especially where mortgages are concerned. Make sure you’re fully informed as you go through the process of signing on the dotted line.

24 Responses to “4 Financial Planning Tips for Buying Your First Home

  • I totally agree on the deposit. Having a substantial deposit is very vital when it comes to purchasing a home. My partner and I recently went to the bank because we wanted to get our own home and we were surprise to learn that our seemingly adequate deposit was not enough to meet the bank’s deposit requirement.
    Esther recently posted…How to Add Value to Your Home and Make a MintMy Profile

  • I appreciated your information on deciding on a home loan with a lock-in period versus one without. It sounds like doing more research into this issue and deciding which is best for you is essential. It’s also a good tip to keep an eye on and do research on the state of the real estate market.

  • Regardless of where you buy, having a good deposit (20 pct of house value + costs of transaction) sounds a must do to me. This way, you have wiggle room when things go wrong.

    When we bought our house, we borrowed 100pct and did costs out of pocket. This was 2006. We explained to the bank that we preferred this. We did have the cash, yet we kept this for painting, decorating, upgrade floors,… They followed us in this thinking.

    On the fixed vs variable one: In Belgium at least there are some caps on high how a variable can go. The best to do is compare the worst case scenario cash flow. each bank will provide you this analysis.
    amber tree recently posted…Why people mistrust optionsMy Profile

    • EvenStevenMoney
      2 years ago

      While we did not do the 20% down with our current home, I know we will do this moving forward. I like the idea of a cap on the interest rates, takes away some of the risk associated with not having a fixed rate. My KISS strategy is to go with a fixed rate, but I do understand the math/risk tolerance behind a variable rate.

  • Wow, this advice is superb! Buying your first home is a big step in life, so you want to make sure you find just the right one within your budget and that you are financially prepared to make the purchase. These tips really provide a great path for getting your house-hunting process to a good, financially-healthy start. Nice work! Thanks for sharing!

  • In the US at least, unless you are incredibly financially-savvy, it is not usually advised to get an adjustable rate mortgage. Too many people here are financially illiterate.
    ZJ Thorne recently posted…Treat Your Employees Well – The Easiest InvestmentMy Profile

  • You have some great tips for buying a home. Like you said, deciding how much you can afford to deposit is vital information. I would much rather put a big hunk of money down up front, so the monthly fee is smaller.

  • Thanks for the advice! I’ve been watching the real estate market for a while and have been reading on how and when to buy. It’s hard to know when the right time is and when you find a house you like you need to have everything else figured out it seems.

  • Thank you so much for the financial tips! My friend is trying to find a new house, and isn’t really doing a lot of financial planning. I love that you say to determine when you are going to choose a mortgage, and how much you can spend. That way, you aren’t going to go over and not be able to afford it.

  • I like how you mentioned that having money saved up for a deposit is crucial when buying a house. My husband and I have decided that we’re ready to settle down, so we want to purchase a house. We’re still about a year out from when we want to buy, so we’ll definitely start saving up as much as we can so we can make a good down payment.

  • That’s a good tip to figure out how much your budget is. That way you can start your planning with hard numbers. I got a promotion recently so I think I’m going to get into the home market, since I’ll be able to afford a mortgage.

  • I really like your tip about making sure that you know how much you can afford when it comes to putting down a deposit for your first home. My husband and I have been thinking about buying a home for a while now so we will have to keep these tips in mind. Hopefully, we can find a great real estate agent to help us with the finding process, thank you for sharing!

  • I want to buy a new home this year, so thanks for this. I have never bought a home myself before, and I am a little unsure how to keep track of all the finances and things. It’s good to learn that, although the interest rate is rising, it isn’t rising higher than what is manageable.

  • Thanks for the great advice on how to more effectively plan for buying your first home. My daughter and her husband are looking to move into their first home, but do not know what precautionary steps they should take. I will definitely tell them to financially plan for this big step!

  • This is all important info to know before you start house hunting. Great advice for financially planning for your first home purchase.

  • Thanks for these great tips. I like what you said about how you should get to know the current housing market, so that you can make the wisest move. My husband and I aren’t well informed on the markets, but want to make the best purchase possible as a home is the biggest investment in our lives. We’ll have to find a real estate agent that is an expert in the market, and can point us towards terrific homes with great deals.

  • A friend of mine is thinking about getting a house, but they weren’t sure how they were going to plan their finances around it. I really like that you say to decide a lock-in period. It would be nice to know that you will be able to afford it for that time.

  • My wife and I are wanting to purchase our first home soon. We want to make sure we are financially prepared for home ownership, so we are looking for good tips. I didn’t realize how important it is to use mortgage calculators and other informative tools that can help determine how much real estate you can afford. I’ll be sure to share this information with my wife.

  • Great tips! Being able to afford a down payment is definitely a must before even thinking of purchasing your own home, but if the market is in shambles, there’s virtue in waiting for that reason too.

  • Hi Even,

    Thanks for such a great advice.

    A home is not a one-time investment.

    It is necessary to know and plan for these expected and unanticipated ongoing expenses. Expected expenses include your mortgage payment, utilities, Taxes, Insurance,

    Homes age and things wear out so it is essential to factor in putting aside reserves for repairs & replacements such as repainting, new roofing, appliances, and systems.

    Jessie Robinson recently posted…Home Sellers Needed!My Profile

  • Thanks for the tips on getting your finances ready to buy a home. My wife and I really want to buy our first home this year, but we haven’t known where to start. I like that you mentioned to find out if there is a minimum deposit requirement so you can know how much you need to save up. We will be sure to do that.

  • Really helpful financial tips.We are gonna buy a new home this year,So your tips about buying home is gonna help us very much.I liked the way you described everything so briefly and simply.Specially how you described to figure out budget.Thanks for such a nice and helpful post.

  • I can see your point about having money saved up for a deposit. Mortgage deposits are typically 20% of the value of the loan. There are some other types of loans with lower deposits though.

  • Great tips! Having enough for a down payment and researching the market are essential steps! Thanks for sharing!

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