If you’re a first-time home buyer in Malaysia, here’s a guide that lists some of the important factors to take into consideration before you make that leap to getting a place you can call your own.

Step 1: Ask yourself why you want to buy a house - what's your purpose?

Be clear about the answer to this question: why are you buying a house? Are you looking for one to live in or as an investment?

What kind of neighbourhood would you prefer? Somewhere chilled and laid back or one that is livelier with a bustling vibe?

Once you’ve figured out why you want to buy your first home and identified the kind of home that suits your needs, you can narrow down your search and focus on where to look that matches your financial expectations!

Pro-tip: Avoid the common mistake of buying a home without a clear goal in mind. Take time to understand your homeownership goals, and it will help guide your path in the journey of owning a home.

You could also do additional research on the housing market in Malaysia by reading up online, consulting property agents, real estate investors, other homebuyers, as well as your friends and family.

Step 2: Assess your finances and be realistic about the costs 

Assessing your financial situation is a crucial step before diving into the home-buying process. Just like other big purchases in life – the price of a property extends beyond its price tag.

Before you start thinking about buying a house, you need to make sure you have enough money saved up. This includes money for emergencies and the down payment. If you don't have these savings in place, it might not be the right time to buy a house.

When mapping out the total cost of your new home, it’s also crucial to factor in the interest that you’ll be paying over the repayment period, along with other expenses like homeowner insurance, maintenance costs, and even quit rent, also known as ‘cukai tanah’, among others.

It’s also important to review your credit score, Central Credit Reference Information System (CCRIS) report and Credit Tip-Off Service (CTOS) report because it’s what stands between you and the bank’s decision to approve your loan. Think of it as a financial report card that banks rely on to assess your financial health, your debts and how diligently you repay them.

Once you've sorted out your finances, you can start looking for a property that best fits both your needs and your budget. 

Step 3: Compare the costs of properties 

As a first-time home buyer, it’s easy to get caught up in the whirlwind of excitement when you’re finally buying your first house. However, it’s important to exercise patience and avoid hasty decisions when you’re house hunting.

To make smart choices, it’s best to explore the market and compare the pricing of houses available for sale to secure the best deal. You shouldn't settle for the first house that catches your eye and rush into making a payment, which is a common mistake many first-time buyers make.

Having negotiation skills can come in handy, as they might help you get a better price and rebate incentives for your dream home.

Owning a house is a significant milestone, one that should not be rushed, especially when it comes to your first home loan or financing. It’s important to take the time to assess your financial situation and ensure that you can confidently commit to this decision for the long run.

While a bank loan is often necessary, the good news is that as a Malaysian citizen or permanent resident, you have an additional avenue for savings that can turn your dream of owning your first home into a reality.

That's right! For those who may not be familiar, the EPF withdrawal option for house purchases is your golden ticket to tap into your EPF Akaun Sejahtera and ease the financial burden of purchasing your first home. It's a valuable resource that can help you achieve the significant milestone of homeownership with greater confidence and ease. 

Read also: Financial Milestones To Achieve Before Turning 30

Here’s how EPF housing withdrawal can make homeownership more achievable:  

1. Buy House

The ever-rising property prices may have made homeownership appear out of reach, but here's some promising news: you can leverage the savings in your Akaun Sejahtera, which you've diligently accumulated throughout your working years, to transform your homeownership aspirations into reality.

To make use of your Akaun Sejahtera savings to cover the typically required 10% down payment when purchasing a home, you'll first need to fork out the initial 10% down payment from your own personal savings. This amount is often used as a deposit or down payment to developers.

Keep in mind that the specific requirements and eligibility criteria may vary based on loan terms and calculation methods applied in each case.

Click here to find out how much you can withdraw for a home purchase. 

2. Build House 

Choosing to build your own home from scratch is an exciting journey as you get to witness your dream house come to life. This is possible as long as you have ownership of the land, either in your name, your spouse's name, or as part of a jointly shared list of names on the land title or geran tanah.

For additional information on how you can build your own house, click here.

3. Reduce/ Redeem Housing Loans  

You have the choice to reduce or redeem your housing loan, offering an excellent way to lighten the load of outstanding loan balances and reduce the financial strain of monthly repayments. This option is available for individual property purchases, joint property purchases, or a spouse’s housing loan.

Nevertheless, it’s important to note that specific terms and conditions will apply. Want to make withdrawals to reduce or redeem your housing loan? Find out how here. 

4. Housing Loan Monthly Instalments 

Paying your monthly housing loan instalment can be a daunting task, especially when you have other financial commitments. Recognising the challenges homeowners face, we’ve introduced the Housing Loan Monthly Instalment Withdrawal, in addition to the above withdrawal type.

This withdrawal is only available only to individual buyers, provided that you’re both the buyer and borrower. You have the flexibility to utilise it for a minimum period of six months or until you decide to discontinue the withdrawal.

Get more details about housing loan monthly instalment withdrawal here. 

5. Flexible Housing  

You have the flexibility to utilise both your current and future EPF savings to increase your eligibility limit when applying for a housing loan from financial institutions.

This allocation sets aside a portion of your savings in Akaun Sejahtera for the Flexible Housing Loan Account. During the loan eligibility assessment, the financial institution considers your monthly EPF contribution as part of your income. A higher loan eligibility increases your chances of securing your dream home.

Interested in flexible housing withdrawal? Click here to discover more about it. 

6. PR1MA Housing  

You can leverage your existing and future EPF savings in Akaun Sejahtera to facilitate the purchase of your first house under the Malaysia People's Housing Programme (PR1MA). Start by setting aside your future contributions for your new home. 

Find out terms and conditions about PR1MA housing withdrawal here.

Here's the exciting part: if you have dreams of acquiring a second home down the road, some of these withdrawals are not just limited to your first house purchase; they are also available to make your second home ownership aspirations a reality!

However, it's important to keep in mind that your EPF money can’t be withdrawn for house renovation purposes.