How to Budget Successfully For Your New Home in Hong Kong

Buying a home is one of the significant and major purchases. For many people, it is a lifetime investment for a happy and healthy life. However, the process of buying a home can be nerve-wracking.

There is a lot of complex paperwork, and costs related to homeownership need to be taken into consideration, which is no easy task for anyone to deal with. That’s why this blog has brought some simple tips on how you can financially prepare yourself to budget effectively for your new home.

Let’s get started!

1. Identify How Much You Can Afford

To begin with the planning, the first thing that you need to consider is defining the amount that you can afford. By saving a reasonable amount, you will feel more prepared during the buying process. This will help you determine a budget for your home and prevent you from buying what you cannot afford at that time.

To get a mortgage, you can look for reliable and flexible mortgage Hong Kong services and lenders. Even if the bank rejects you for the mortgage, you can get an option for mortgage property.

Other than this, you need to set a thumb rule to not pay for more than 28% of the mortgage. No matter if the lenders qualify you for more than 28%, you need to stick to this percentage to manage other expenses as well.

2. Consider Your Down Payment

Once you have set a line of affordability, the next thing to work on is finding the down payment. As the down payment is the upfront cost that you need to pay at the closing, ensure you have settled it earlier.

However, the amount is dependent on various factors, such as the type of mortgage and its minimum requirements, along with your home purchase price. Depending on the lenders, you can also get the flexibility to pay as low as 3% to make a down payment.

3. Determine the Closing Cost

As you are purchasing a home in Hong Kong, you have to prepare around 10% of the closing cost to pay upfront. However, you can expect to pay around 3% to 6% of the home’s purchase without including the down payment.

As you start the budgeting process for your home, you are advised to save up for lender fees, title insurance, attorney fees, and home inspection. Before you pay for all the costs, it is financially advised to talk to your lender and real estate agent first to estimate all the expenses that you have to bear.

4. Estimate All the Expenses

Buying a home is no easy process or single cost that you have to deal with. You will always be responsible for ongoing expenses such as utilities, maintenance and repair, property taxes, and homeowner insurance.

Keeping an eye on these expenses will help you have a backup plan for saving so you can cover these hidden costs effectively.

5. Plan for Unexpected Costs

During the home-buying process, several expenses might appear unexpectedly. Whether it is maintenance cost, roof repair, or minor wear and tear around the property, consider adding all of these hidden or potential expenses to your budget-creating process.

For this purpose, you can also invest in an emergency fund to get a lump sum value that will cover the damages.