On the flip side, renting a home is budget-friendly, can be more flexible with your life plans and is hassle-free when it comes to maintenance costs, home repairs and more. So if you are deciding to rent or buy your first home, here’s what you need to know.
What is the Process of Buying or Renting a House Like?
For a first-time renter or a first-time homebuyer, when looking for a new home, decide between ‘DIY-ing’ (do-it-yourself / find-it-yourself) or getting a property agent. The best way to determine is to know if you need help due to time restrictions and lack of knowledge. If you’re thinking of engaging a property agent, you will have a host of options based on your location.
Finding a house to buy is easy as there are plenty of properties on the market. However, it can get complicated when it comes to financing. That’s why you should decide your budget and go through the list of available housing schemes that are applicable to you before you decide to purchase a house. This is where your credit score matters.
On the other hand, if you’re looking to rent, you can always turn to online rental platforms such as SPEEDHOME which makes your whole rental process effortlessly easy. You could obtain perks like zero deposit, virtual viewings, online rental payments and more through an app without having to physically travel anywhere.
What Important Information You Submit To Rent and Buy?
Buying a house requires you to deal with a long list of documents that include, the property Letter Of Offer (LOA), Sales and Purchase Agreement (SPA), Memorandum Of Transfer (MOT), bank’s letter of offer (LO), Facilities Agreement (FA), Stamp Duty and a few more. If you are unsure how to start, you can hire a real estate lawyer to save you the hassle.
In contrast to that, if you are looking to rent, there are very few documents you need to submit – especially if done through online platforms such as SPEEDHOME, where you only need to submit information on your financial capabilities. Such information may include your payslips, offer letter, bank statements and identification card. This information will remain confidential between you and the platform.
The importance of having a good credit score is more emphasised now as you would need it to rent and buy a house. More and more rental platforms perform tenant screening to ensure that the potential tenants are suitable for the tenancy and capable of paying the agreed rent.
This ultimately encourages you to build your credit score early and cultivates the good habit of paying your financial commitments on time.
When Is The Right Time To Move From Renting To Purchasing?
Want to buy a house? But first, you need to understand that homeownership costs more than paying your monthly rental. Owning a house will induce more costs and this includes interests, property taxes, management fees, maintenance, repairs and other miscellaneous fees.
The decision to move from renting to purchasing should be done based on your financial capability and life plans. It may be difficult to tell, but these are the things you should consider when buying your first home:
- Ensure that you have a stronger purchasing power by having a stable income that enables you to afford the monthly instalments and have enough emergency funds. You should also understand that this will be a big financial commitment and a new liability for you.
- Do your research on the potential areas, types of homes, designs and price points.
- Have a list of non-negotiables. Do you need a home surrounded by a greener environment, a supermarket and a school nearby, or good connectivity to highways?
- Before applying for a loan, know your financial health standing by checking your credit score. Experian i-SCORE is a consumer credit score that is based on the statistical analysis of your credit files to derive a numerical score ranging from 300 to 850. Credit scores are frequently used by banks to assess consumers’ creditworthiness, with a higher score indicating a lower credit risk to lenders. This will help to ascertain your eligibility for a home loan.
Going back to the question above, the best time to purchase a house is when you can afford the payment, be ready for unexpected repairs, and are ready to commit to a 35-year loan repayment tenure.
Why You Should Know Your Financial Health?
Your credit score is the go-to way for banks to assess if you can repay them consistently and on time. To know your creditworthiness, you can check your CCRIS statement and latest i-SCORE on your Personal Credit Report Plus (PCRP) today. You can also learn more about Experian i-SCORE or check out other perks during Experian’s Credit Health Month this June 2022.
This blog post was developed in collaboration with SPEEDHOME, a platform that simplifies rentals for both landlords and tenants.