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First-Time Homebuyer’s Guide

First-Time Homebuyer’s Guide to Purchasing Property in Malaysia


Buying a house is one of the biggest investments you will make in your lifetime. It’s important to understand all aspects of buying property, from the mortgage options and processes to locations, prices and more. This guide helps you get started with this process.

How much does it cost to buy a house in Malaysia?

The cost of a house in Malaysia depends on its location, size and the materials used to build it. For example, a house on a hillside will be more expensive than one at sea level because of the extra effort required for construction. Also, if you want a bigger house with more bedrooms and bathrooms then naturally this will increase your overall expenditure too.

The best way to find out how much it would cost you personally is by visiting several agents or property dealers who specialize in selling homes in your area or searching online for property listings that match what you’re looking for.

Where can you find properties for sale in Malaysia?

There are many ways to find properties for sale in Malaysia. Here are some of the most popular:

Property portals – These websites allow you to search for houses and apartments using filters such as location, price range, and amenities. Some sites even offer virtual tours so that you can get an idea of what the property looks like before visiting it in person.

Classified ads – While classified ads are still used heavily by real estate agencies today, they still make up a large portion of online listings because they’re free to post on sites. If you want something specific–for example, a house within walking distance from your workplace–then this may be worth checking out!

Property agents – These professionals work with buyers who want more personalized service when purchasing their next home; however, since they take part in commission sales rather than hourly rates like lawyers do there can be some significant costs involved with hiring them

Renovations and Accessory Purchases:

Renovations are one of the most expensive parts of buying a home. They can also be done by you or by a contractor, and both methods have their pros and cons. E.g. if you are facing masonry issues then you can search for best masonry services in buffalo or whatever city you live in, that’s just one example!

If you want to do the work yourself, make sure that you have a good idea of what needs to be done before starting any renovation projects in order to make sure they’re done right and on time. You may need certain tools that are not easily available at local hardware stores (like scaffolding), which means additional costs for transportation and installation as well as purchasing those tools in advance so they don’t get lost during shipping time frames if ordered online from overseas suppliers such as Amazon Prime Now or Alibaba Global Logistics Services (GLS).

If hiring someone else instead sounds more appealing, then remember: always check references!

What are the documents required for buying a house?

The documents required for buying a house include:

ID card


Marriage certificate, if applicable.

The following are also needed:

Bank statements (for the last 3 months).

Residence permit or work pass, if applicable. Letter from employer stating your monthly income, job title and tenure with company; letter from bank stating that you have sufficient funds to purchase the property (if not owned by self); letter from financial institution stating that there are no debts attached to the account and it is active; letter from real estate agent showing details of the sale agreement such as price paid per square foot etc.; letter from lawyer confirming legal ownership status of land/house being purchased

1. Income:

In Malaysia, income is the most important factor in determining your ability to get a housing loan. The bank will want to know how much money you make and whether or not it’s stable and regular. If you’re married or have dependents, this also means that their incomes must be considered when calculating yours.

Your income must be sufficient enough for paying off all monthly installments on your home loan as well as other expenses so as not to cause financial difficulties for yourself or others who depend on you (such as parents). While some banks may allow for self-employed applicants, most require that applicants have had stable jobs for at least two years prior to applying for a mortgage loan with them – but even then there’s no guarantee they’ll approve your application!

2. Loan affordability:

Before you start looking for a property, make sure that your finances are in order. Having a clear understanding of how much you can afford to spend on a home loan is important as it will determine whether or not you can qualify for financing at all.

The first step in determining mortgage affordability is to know what types of loans are available and how they work.

Fixed Rate Mortgages (FRM) – The interest rate remains fixed throughout the life of the loan, so borrowers know exactly how much they will pay each month regardless of fluctuations in market rates

Variable Rate Mortgages (VRM) – Also known as adjustable rate mortgages (ARM), VRMs allow banks to adjust their interest rates periodically based on changes in benchmark indices such as LIBOR or SIBOR

3. Down payment:

The down payment is the amount of money you put down when you buy a house. You can put down as little as 5% or as much as 100% of the purchase price, but it’s recommended that first-time homebuyers keep their down payments between 20% and 30%. The larger your down payment, the lower your monthly mortgage payments will be.

4. Additional payments to be made in installments:

In addition to the down payment, you will also have to pay stamp duty and legal fees. Stamp duty is a tax that must be paid on the transfer of ownership of property in Malaysia. The amount varies according to whether you are buying a house or land, and whether it’s your first time purchasing property in Malaysia.

Legal fees cover costs associated with registering documents such as titles and contracts at district land offices (DLOs). You may also incur additional costs related to your mortgage lender or broker who may charge an upfront fee before processing your application for a home loan.

5. Home loan repayment period:

It is important to note that the repayment period depends on your loan tenure. The longer your loan tenure, the higher will be your monthly instalments. The maximum amount of time you can borrow from a bank is 30 years and it usually occurs when you take out more than RM1 million (about US$250K) worth of property loans.

You should also know that if you have taken out a smaller amount and want to extend its term beyond 15 years, then this will require additional fees charged by banks or financial institutions as well as interest rates which are higher than those offered for shorter terms.

6. Debt servicing ratio (DSR) and DTI ratio:

Debt servicing ratio (DSR):

The DSR is the amount of your monthly debt payments divided by your gross monthly income. Banks use this ratio to determine your ability to pay back a mortgage loan. The higher the DSR, the better; however, you should aim for no more than 30% at most if possible.

DTI ratio:

The DTI ratio refers to the percentage of gross monthly income that goes toward housing costs such as rent/mortgage payments, utilities etc. If this number is too high and exceeds 50%, banks may turn down your application because they consider it too risky for them financially.

7. Pre-qualification process:

The pre-qualification process is a step that you need to go through before you can apply for a home loan. It’s similar to the pre-approval process in the US and Canada, but the main difference is that banks and financial institutions here do not require borrowers to provide any collateral from their personal assets before they get pre-approved for a loan.

The only thing required in this case is proof of income, which means having your latest salary slip or pay slip (if self-employed) with you when applying for your home financing options. If your application gets approved by the bank or financial institution where you’ve applied, they will issue you with a letter confirming how much mortgage amount they are willing to lend based on their assessment of your ability to repay it over time – this letter is known as “pre-qualification.”

8. Property Insurance:

Property insurance is an important aspect of home ownership. It protects you from financial loss in case of damage or destruction to your property. Many banks and financial institutions require their customers to have property insurance before they can get a mortgage, so it’s something you’ll want to consider carefully when purchasing a home.

Property insurance policies typically cover three main areas:

Building – The structure of the building itself (e.g., walls, floors and ceilings)

Contents – All belongings inside the house that aren’t part of the structure (e.g., furniture, appliances)

Liability – Coverage for injuries sustained by others while on your property


We hope this guide has provided you with the information you need to make an informed decision about purchasing property in Malaysia. If you have any questions, please don’t hesitate to contact us!

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