For a young couple, buying a house is a financial goal with high priority, especially if they are planning to have children. So what are some important things for young couples to note when buying a house?

3 Home Buying Tips for Young Couples

Buying a house is often an aspiration among young couples because a house can be seen as the physical form of the family. Usually, young couples have an urgency to buy a house either because they don't want to live with their in-laws or wish to have children right away.

Here are three tips on buying a house for young couples

#1 Looking for Property

The first step in buying a house is looking for a property. Prospective buyers can search for homes through websites such as rumah.com, rumah123.com, pinhome.id and so on.

When choosing a location, there are several aspects to consider, such as public transportation access, nearby facilities (schools, hospitals, places to eat), security, water, flood-prone locations, price and more.

If you have found a suitable location, you can contact a property agent to view the house (or a similar showhouse).

The property agent's job is to help find a house that suits your needs and budget and assist with administration (notary administration, liaison with the former owner/property developer, liaison with banks and others).

Statistically, out of 100 houses viewed online, a prospective buyer will visit a maximum of 10.

#2 Preparing the Down Payment

The second stage is preparing a down payment. Melvin Mumpuni CFP®, a financial planner at Finansialku, suggests preparing a down payment of at least 20% of the price of the house.

Both houses purchased for personal living and rental purposes have the opportunity to increase in price. The difference between a house you live in and a house used as a rental property is the ability to generate income.

Houses that become rental properties can generate income to cover some or all of the mortgage repayments. A place lived in personally, however, cannot generate revenue.

Common ways of preparing Down Payments in Indonesia

1. The down payment is ready through a financial planning process.
2. The down payment is covered by parents, while the children continue to pay instalments.
3. Promotions run by the property developer protect the down payment.

Home Down Payment Financial Planning Process

You can consult a financial planner or Moduit advisor for calculations in purchasing a house. Below are several examples:

Example 1 Andy and Beta are a young couple who want to buy a house. The house price is IDR 1 billion with a down payment of 40% or IDR 400 million. Currently, they only have Rp. 100 million, which is less than Rp. 300 million. How much do they need to invest monthly to obtain the necessary funds?

If the investment period is two years, Andy and Beta need an initial capital investment of IDR 100 million plus a monthly investment of IDR 11 million with an investment target of 7% per year.

Next, they must choose the appropriate investment product, such as mutual funds, FR (Fixed Rate) government securities or blue chip stocks.

Example 2 Rini wants to buy a property for her son, who is studying in Australia. The property price is more or less if converted to Rupiah, IDR 8 billion.

Rini wants a down payment of at least 40% or IDR 3.2 billion. Currently, she only has Rp. 2 billion. How much should she invest each month?

If the investment period is two years, then Rini needs an initial capital investment of IDR 2 billion plus a monthly investment of IDR 35 million with an investment target of 7% per year.

Next, she must choose the appropriate investment product, such as mutual funds, FR (Fixed Rate) government securities or blue chip stocks.

#3 Setting Up a Mortgage

After the down payment is available, the next step is to set up a mortgage.

Some things to consider when applying for a mortgage:

1. Make sure instalments are at most 35% of income.
2. Be wary of floating interest and mortgage programs.
3. Look out for special mortgage interest promotions with banks (e.g. bank birthdays) or developers.
4. Try to compare several bank mortgage programs to find the best fit.
5. Read and understand legal documents (e.g. accelerated payment clause) before signing.

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