Now that you have a picture of how you want your home to look like, you can get down to the business of getting your finances in order.
Experts suggest no more than 30 per cent of a home buyer's monthly income for a mortgage payment. The Central Provident Fund Board in Singapore advises aiming for 25 per cent to be more prudent. Ultimately, the board says that one's Total Debt Servicing Ratio (TDSR), which refers to the proportion of gross monthly income that can go towards repaying monthly debt obligations, must be at a maximum of 55 per cent.
This ratio is necessary to keep in mind, as the price of a property isn't the total amount you need to shell out. You still have to pay additional fees like insurance and taxes that come with buying a house. It would be best if you also set aside an amount for annual maintenance checks to keep your property in order. As Lawrence Yun, chief economist at the National Association of Realtors in the US, reminds homebuyers: "You must understand your maximum financial capacity."
Moreover, a consumer survey conducted by HomeLight, an online real estate marketplace in the US, found that most homebuyers regret the cost of their home purchase. The trend shows maintaining a sustainable budget is necessary.