Guide for first time home buyer

Guide for first time home buyer


With the local property market providing some of the best in real estate – attractive prices, competitive rates, avant-garde architecture and design – one would often see long queues at prime property development launches. And if you are not among those first in the line, you will have to make do with the odd lots left.

Notably, young professionals under 35 will find it easier to own or invest a property given the construction of more affordable homes and the government’s My First Home Scheme, which provides 100 percent financing.

FIABCI president Ir Yeow Thit Sang noted that property prices ten years ago were very affordable, such that property buyers between the ages of 28 and 38 can place a down payment with their parents’ help.

“Today, prices are two to three times more than what it was in 2003, and the percentage of young buyers has dipped some 20 percent as salaries don’t commensurate with property costs,” he said.

“These young buyers are also going for new developments. They’re price conscious, particular about location, and purchase within their means. Affordability is THE priority in the young buyer’s minds,” he added.


My First Home Scheme

Tailored for first-time home buyers, My First Home Scheme provides 100 percent financing, so there is no need for 10 percent down payment. Home buyers under this scheme also pay normal interest rates of the respective banks.

Who is eligible under the scheme?

• Malaysian citizens

• First time home-buyers

• Individuals or couples (husband & wife or siblings) up to age 35 years

• Private sector employees only (including couples)

• Monthly income not exceeding RM5,000 for individuals or combined monthly income of RM10,000 for couples (based on gross maximum income of RM5,000/month per individual)

• Individuals/couples with minimum employment of over 6 months with same employer

• Repayment of total financial obligation must not be more than 60% of the net monthly income or maximum financing limit of the participating bank, whichever is lower.


Eligible property

• Residential properties in Malaysia

• Minimum property value of RM100,000 and maximum of RM400,000

• Completed properties or those under development

• The home must be occupied by buyer and not for investment purposes

• For leasehold properties, with a minimum of 60 years remaining


Financing requirements

• Tenure for repayment not exceeding 40 years, subject to borrower’s age not exceeding 65 years at the end of financing tenure

• Amortizing facility only (no redraw features)

• Installments payable via monthly salary deduction of standing instruction

• Compulsory Fire Insurance/Takaful


How EPF help first-time buyers acquire a home

EPF allows its members to withdraw their savings in Account II to fund the home acquisition. The funds are typically used as a down payment, reduce/redeem housing loan, to pay monthly loan instalments or if one is going for My First Home Scheme which does not require down payment, the EPF money is used to cover other charges such as strata titles, legal fees, etc.


Who is eligible?

• Malaysian citizen

• A Malaysian citizen who have withdrawn your savings under Leaving The Country Withdrawal before 1 August 1995 and then choose to re-EPF

• Non-Malaysian citizens who became a member before August 1, 1998 or getting a Permanent Resident (PR)

• Member has not attained 55 years of age on the date the application is received by EPF

• Members have at least 500.00 in Account II


What are the conditions?

• Buying a house (bungalow / terrace / detached / apartment / condo / studio apartment / service apartment / townhouse / SOHO or shop with residential units.

• Home purchase financing through:

(i) Housing loan from any institution as follows: –

– Financial institutions licensed under the Banking and Financial Institutions

Act 1989 (BAFIA)

– Central Government/State or other government financial agencies

– Employer members

– Co-operation / collaboration company licensed (approved by the

Co-operative Commission of Malaysia).

– Licensed insurance company approved by Bank Negara Malaysia

– Lenders approved by the Board;

(ii) Cash

• Members who have signed a Sale and Purchase Agreement shall not exceed three (3) years from the date the application is received by the EPF.

• Members who have not made withdrawals or those who have withdrawn to buy a first home and have to sell or dispose of ownership, and then buy a second home. Proof of sale / disposal of first home ownership is required.

• Members who want to buy a house that has been acquired on hire purchase from the parties approved by the Board.

• Members who buy land to build a home on it as a package (the date of the land purchase and the date of the start of the construction must be within 6 months)

How much can an individual home buyer withdraw?

• The amount difference between the price of the home and total loan plus 10% of the home price

• The full amount of Account II

• The amount to be withdrawn must not be less than RM500.00


How much can a home buyer couple withdraw?

• The amount difference between the price of the home and total loan plus 10% of the home price

• The full amount of Account II from both accounts but based on the maximum amount that is allowed to be withdrawn

• The amount to be withdrawn must not be less than RM500.00


How much can a home buyer withdraw if applying for 100% loan?

• 10% of the home price

• The full amount of Account II (if amount is not less than RM500.00)

How much can a home buyer withdraw with no home loan?

• Amount of the home price plus 10% of the home price

• The full amount of Account II (not less than RM500.00)

(Information retrieved from KWSP website. For more information such as the required documents, please visit


Things to do before buying a property

• Take time looking around at available properties

• Shop for the best mortgage loans and packages

• Pre-check your income, credit, and assets to know your credit score, or the amount of loan that you handle

• Make a realistic budget on your monthly instalments

• Have a long term plan on paying your home loan instalments

• Read and understand the fine print prior to signing the dotted line

Things to look out for when viewing property

• Check the quality of buildings and get a feel of the area

• Check the surroundings while anticipating the changes likely to happen

• Check the roof, ceiling and walls and watch out for water marks, leaks.

• Check the floor for damages caused by water and the doors and windows for rotten wood and cracks in glass surfaces.

• Keep an eye out for termites and other pests particularly in wooden areas.

• Test electrical outlets.

• For renovated areas, request from the seller a copy of the local town council’s approval for the renovation works.


Speak Your Mind

The content of this website is made available for informational purposes only. This website does not provide specific legal or investment advice.