Lucky 1988 don't have Dollars and Sense.

[Arcachon]

How Much Should You Pay For Your First House?

http://dollarsandsense.sg/how-much-should-you-pay-for-your-first-house/

[Arcachon]

The key lessons I want you to take away from this are:

Your first home is an expense, not an investment

Answer: Brought 4 room HDB for 81,300 in 1988 sold for 285,000 in 1995 after staying for 7 years get a cheque from HDB for 180,000 after all the deduction.

Get specific about the price you can afford

Answer: Buy the biggest you can buy.

[teddybear]

1. Wrong teaching! :hurt:

2. How can we determine the price we can afford?
Is it going to be 4x annual income as advocated by previous MND Mr Khaw? But some people say not practical for private condos (only apply to HDB), and also in many other countries few can achieve 4x ratio. So who can tell us what is the correct ratio? :chargrined:


The key lessons I want you to take away from this are:

1. Your first home is an expense, not an investment
2. Get specific about the price you can afford

[Kelonguni]

There are serious blind spots in the article even though I agree with the basic point of minimising payment for the first house. Much also depends on the opportunities available at the point.



How Much Should You Pay For Your First House?

http://dollarsandsense.sg/how-much-should-you-pay-for-your-first-house/

[eric3417]

Somewhere in the middle of the scale do just fine for me…

:)

[watchlist88]

You need a house to stay for your family for the 1st house, don't “think” of it as an investment. It is a “necessity”. Years later, if you sell still need to have a roof over your head right, so you will still have to buy at a high price. If price goes down, you sell low but also buy low. It all depends on market conditions at that point in time.

When you are young and buying 1st house, better don't over-stretch but live within your abilities and better still is to live a level below what you can afford. This is especially important if you intend to start a family too as there are many other expenses once the young ones come along. Then there are those who need to support aged parents too. Life is full of surprises, it can be happy ones or painful ones. Imagine if you or spouse are hit with an illness or accident, or the aged parents need more medical care, etc. I am a more cautious person and always like to have a “margin of safety” in major decisions in life such as house purchase.

Exercise caution and have spare cash available for all other emergencies that can happen and not to put everything into the house hoping that you will reap a good profit after 5 or 10 years. It is better to be able to sleep peacefully every night without having to worry that your family will not have a roof over the head because of the monthly instalments, but yet still have excess cash parked elsewhere ready to be deployed because you would have accumulated savings over the years due to salary increments and promotion at work !

[Arcachon]

With MSR the day where you can get the biggest HDB are over unless your parents are willing to help you pay the deposit.