I am sure that some of you might be wondering if getting married and getting a house early is a bad move. This is because when you are young, you are worried that you are not going to be able to afford these things and you simply did not have enough information to see if things would work out.
Let’s take a look and see what are the pros of getting a house young.
Prices of HDB Flats
HDB flats are by far the most affordable houses for Singaporeans to aim for, the majority of us should understand the prices, schemes, and guidelines towards buying an HDB flat.
*Prices for HDB BTOs listed above are based on August 2020’s HDB Launch with grants or otherwise stated.
*Prices for Resale HDB, Executive Condominiums, and Private Condominiums are based on 2019’s price list
By looking at this chart, you are able to see the price range for different housing in Singapore as of recent data.
You might feel overwhelmed by the amount but bear in mind that these are before grants. If you want to know more, you can check out my previous article about the grants.
Why Should You Get an HDB Young?
If you think about it, when you are young you are likely to have just started your career with a paycheck that doesn’t pay that well. This means that you have a lower income and it will actually help you to get a house actually.
EHG would be able to help you as it may subsidy up to $80,000, according to your income level as the lower your income, the more help you get from the grant. This means that even if you and your partner do not earn that much yet, the grants are very likely to help you afford a flat.
Besides that, getting a property earlier on in your life would give you and your partner more motivation and determination to succeed. This is due to the fact that you both now have experience and exposure in buying the house and paying off the mortgage which allows you to better understand what it takes to have a better life with your family.
The earlier you buy, the earlier you will be repaying the loan as well. Think about it, since you bought your house at a low price with BTO and the grants that reduced the price. The price of your house is also very likely to be appreciated after you have repaid the loan. This means that you have an asset afterward as by then you might also have progressed significantly for your career and ready to upgrade your house.
What can you do with your first house then? Well, you can either sell it or rent it. I would rather rent it away and get $2,000 in passive income every month. I can then use that amount for other uses such as investment, financing for another house, or even use it for my expenses.
The waiting time for BTO can quite long as it takes years to build the flat and many other couples are also applying for it. This means that you have to wait for a while before you get the flat and the earlier you apply, the better it is.
Since you are going to get your house earlier in your life, you are exposed to more financial stress earlier on in your life. This means you would be learning things earlier than others. You are down with loans and all these costs to get a new house, this would help you to learn how to properly manage your money such that it would allow you to pay off debts, save up and also for your daily expenses. This means that your financial literacy would be built on earlier and you will be able to cultivate good spending habits early in your life and can be huge to help you achieve financial freedom earlier!
What are the cons?
The cons is that this can only be done if you are sure that you are going to marry someone. If you are single, you cannot do this as it is against the guidelines to apply for HDB before the age of 35 if you are single.
Since you are more likely to be applying for BTO since it is cheaper, the location might not be your ideal one as every project has the location fixed and it is not within your control. If the project only includes Ang Mo Kio, Woodlands and Tampines then these few locations are your only choices. This means that you may not be able to choose your preferred area.
The bottom line
I would strongly recommend young couples to apply for BTO as soon as possible as waiting time is also an important factor to getting your first house. As your income is not as high in the younger days, the grants would be able to help you even better.
You should take advantage of the grants and plan for your first house as you settle down with your partner. No pressure though, plan things out and ensure that you can afford the house too!
