As a first time home buyer, is it worth buying an EC, with high loan payments per month?
It might seem like i’m tight on cash every month with limited cash to spend on other things like buying a car and other luxurious splurging.
However, the cash put towards the EC loan will build my equity in the property, which will eventually be my asset.
Is it worth it though?
Or better to just get an affordable HDB resale and have cash on hand to comfortably tide through the early stage of adulthood? And then move to a condo later on in life?
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I bit the bullet when getting my close-to-1M EC to stay (not first time home). Paid quite some for installment (which we're still comfortable), and squeezed here and there to get the down payment.
7 yrs down the road, sold it, got nett ROI of ~3.5% annualized. Seems like decent investment.
My advice:
1. Don't look at the equity that you put in (the return is better elsewhere), but analyse potential of capital appreciation (location and future development).
2. If the installment is really tight for you, I think it's not worth suffering for 5 yrs. For us, it's still OK.
3. Fork out big down payment with calculated risk (and potential return) is OK. Using bank's money to cycle positive return every 5 yrs, not bad.
4. Better quality of life for few years. Can't measured with money 🤑
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Are you looking at the EC as an investment or a home to stay?
For sharing, my matrimonial home, an...
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"tight on cash every month with limited cash to buy car or luxurious spending"
this statement itself scares me. If it's for glory you are after, then don't because it wont be before long you will be in debt that you can't afford to pay.
"buy things that you do not need, you will soon sell things that you need".