The Asian Pacific is an up-and-coming area and many companies have based themselves in this location. Whether you are relocating to Malaysia or Singapore for work and need to find yourself somewhere to live, or you have always harbored a dream about owning a property in this region as an investment or holiday option, you may have wondered how you are going to finance your purchase. Here is a guide to help you turn your plans and dreams into a reality.
Plan Your Budget
Before you start, you should plan your budget and decide what sort of property you can afford. You could purchase anything from a luxury mansion to a one-bed apartment in this region depending on your finances and your ability to raise the money to make your purchase. You will typically need to find at least 10% of your property purchase price to use as a deposit. However, you will also need to pay fees such as stamp duty and local taxes separately, so make sure you have factored this into your budget plan.
Use a local estate agent or lawyer to make sure your purchase runs as smoothly as possible. Make sure that they speak good English or can use a translator to ensure that you understand everything you are agreeing to before you sign on the dotted line, otherwise you may find yourself making a costly mistake.
If you have sufficient savings, you may decide to use these to fund your purchase. This can be a great idea, especially if your savings rate is low. Using savings means that you do not need to pay any mortgage interest rates and the money is available almost immediately, so you do not have to wait for your mortgage offer to arrive. This will allow you to move quickly when you find the property you want to purchase, and it will also give you buying power as you will be a more attractive buyer. Your seller may be tempted to take a lower offer from you if they do not have to wait around to sell their property. However, do make sure that using your savings will not leave you liable to a large tax bill as this may not work out to be cost-effective for you. Always make sure that you have sufficient savings in your bank account to cover any unexpected bills.
If you own a property that has sufficient equity, you may be able to use this equity to fund a purchase in the Asian Pacific. This is called a remortgage and will involve taking out a loan on your own home with a US lender who will let you know how much they will lend you based on your property value. To get the best valuation, it may be wise to carry out any cosmetic work that needs to be done to the property and shop around for the best offer. If you are relocating and have decided to let out your existing property, this could work out well for you. However, you should be aware that the more money you owe on a property, the more likely your lender will be to foreclose on you if you are unable to keep up the repayments, so it does involve a bigger risk for you.
Asian Pacific Mortgages
Mortgages in this region are quite favorable and the economy is stable which means that your monthly payments are less likely to fluctuate, and your property is more likely to retain equity and even make you money. There are two main types of mortgages in this region:
Floating Rate – This rate is subject to change if interest rates change. It is great while interest rates are low, but it will get more expensive if interest rates increase. You are taking a bigger risk with this type of mortgage, but it can work out more cost effective to do so.
Fixed Rate – This rate is usually fixed for 1, 2, or 5 years and the rate will not change during this time regardless of what the interest rate does. This can provide you with peace of mind as you will always know what your monthly payment will be, but you will lose out if interest rates drop because you won’t benefit from this until the end of your fixed period.
Propertyguru.com will be able to offer you the best deals from those in the region as they search the market for the keenest fixed and floating rates and can offer you rates from well-known lenders such as a Citibank Home Loan.
There are several ways to finance a property purchase in the Asian Pacific, whether you are currently living in the region or not. Make sure you do your homework and consider your options before you make a purchase and always make sure you can keep up the repayments on your mortgage to prevent foreclosure.