In short, this is the proposed schedule of activities, based on our experience:

1. Search for a good property at a good location

2. Choose a good unit, taking into consideration the feng shui, the direction the house is facing, the surrounding things to take note of, etc. I’ll cover that in another post.

3. Put down a booking fee for the unit.

4. Shop for a good home loan. Go to or call up banks. The trick is to call the banks and get the banker to go to your house for a presentation. During the presentation, ask everything you need to know, including the penalties and perks.

5.  Choose either flexible or conventional plan. Difference is the interest rate and the flexibility. More details should be covered in another post. Personally, we prefer flexible loans, because we factor in the possibility of us earning much more in the future and are able to pay off our housing loan much faster.

6. Once you have found a good home loan deal, get the banker to generate an offer letter. The offer letter will be ready in a few days time. Sign it, in order to lock in the offer. If not, the offer will lapse after the limited period. Check with the banker because the expiry date would be different for different banks.

7. Once you have decided on which bank to take the home loan from, find out the bank’s panel of lawyers. Check if any of the lawyers is also on the panel of lawyers doing up the Sales and Purchase Agreement.

The objective is to have one lawyer handling both the loan documentation and the Sales and Purchase Agreement. Why? So that you can save on lawyer fees, which could range from hundreds to thousands, based on discounts given. Another advantage is that they can get the documentation up faster too, minimizing delays in payments etc, without having to deal with another party.

As for the shopping for home loans from banks, I would leave it to another post.

8. Once you have found the lawyer to do both loan and Sales and Purchase Agreement documentations, set a date to sign the documentations. Could be done on the same day or different days. If it is done on the same day, then it saves you time and hassle.

9.  Sign the documents, pay a deposit for the lawyer fees and wait for the lawyers to get back to you with the stamped documents. Once all the documents are in place, then only you pay the lawyer in full.

10. After that, it is time to anticipate the first draw down,  which also means, time to start paying the home mortgage. Usually the developer draws money from the bank in stages, according to a schedule given in the Sales and Purchase Agreement. Will put up a sample schedule in another post.

11. So, based on the schedule, you can plan your finances properly, in order to minimise the amount of interest you have to pay. Oh, btw, this only applies to flexible loans.

Simple isn’t it? If you practice this often enough, it will become like a second nature to you. Buying a house/property will be like buying rice. Ahh.. how good!

So what after the signing of the Sales and Purchase Agreement? Time to find ways to finance it, right?

No! Utterly wrong! Though there’s no hard and fast rules, but this is one mistake you could make, based on our experience. And this is THE mistake we almost committed.

Why?

Because by the time you have signed the Sales and Purchase Agreement, the clock has started ticking. You have limited time (how much, partner please help me to fill in) to get the method of financing in order.

And if you do not manage to secure a loan from any banks and when the first drawdown, meaning the developer is asking for money, you are liable to pay the interest of usually (how much again partner… hehee).

Usually, if you have a clean financial record and have a good relationship with all banks, the likelihood of you not being able to secure a loan is rather low.

Let me share with you the mistake we made.

After putting down the booking fee for the house, we went shopping for home loans, which is a correct thing to do. But the uncertainty we had was that we did not know when is the signing of the Sales and Purchase Agreement, as the developer was yet to receive their developer’s licence.

It was about 5 months wait, before we received a call asking us to sign the Sales and Purchase Agreement in 2 weeks’ time.

What went wrong was that, during the 5 months, after the initial hype of looking for a home loan and finally narrowing down to two banks, we did not sign any offer letter, despite one bank having generated one for us. We did not know that the offer letter will lapse if we do not sign it and thus making the offer invalid.

And so, after the lapse, we still continued to wait for news on the Sales and Purchase Agreement signing.

What we should have done was that, during that period of time, continue to monitor the banks for better offer on home loans and promotions given out. At the same time, find out the panel lawyers for both the banks and the developer. This information will come in handy when you need to decide on which lawyer to take.

Even though the uncertainty of a date for the signing of SnP was a challenge, we should have still decided on the bank we want to take home loan from, and then to generate the offer letter and sign it, meaning locking in the competitive interest rates. This way, makes it easier for you to decide on the lawyers.

Choose a lawyer who can handle both the SnP and the loan documentation, meaning the lawyer can represent both the developer and the bank. There’s always the option of using an outside lawyer, which could be to your advantage as well. More analysis on this in the coming posts.

So, our advise, based on our own experience (disclaimer: use this with your own discretion. Owner of the blog is not responsible to any loss incurred from using this advice.) to be on the safe side, to start shopping for home loans from all banks from the day you put down the booking fee.

Better still, secure an offer letter from the bank, a letter which states how much is the interest rate the bank is willing to offer to you, based on the buying price and the type of property.

But, be aware that if you do not sign the offer letter, it will lapse after a few days to 2 weeks, depending on banks. And once it lapses, you would have to submit an application for loan all over again through the banker.

And the banker would have to get approval from the headquarters again. The disadvantage to this is that you have to endure the paper work and getting documents in order again - hassle and inconvenience.

But again, do take note also that the rates on home loans are very competitive. The rates offered by a bank can vary within months, maybe even weeks! One advantage of securing a deal after the signing of Sales and Purchase Agreement is that you might get better rates for your home loan.

And yet again, there’s the risk of time running out. So you have to weigh the pros and cons.

Look out for the nutshell steps to what you should do when you buy a new house in the next post.