Millennial First-Time Homebuyers Mistakes

5 Common Mistakes Made and How to Avoid Them

By Alessandra / 7 May 2021

first-time homebuyer Pokok.Asia

Cover image via Don Muro Real Estate

  • Millennials made up 70% of new real estate sales in 2020
  • One of the common mistakes of young first-time homebuyers is you underestimate the cost of homeownership in the long run
  • You also overlook first-time homebuyer programs, which could save you a lot of money
  • Ignoring your credit score can affect your loan eligibility and approval
  • Only looking into one bank will cause you to miss out on a potentially good deal with another bank
  • Not getting your loan pre-approved will cause you to overestimate your loan eligibility and budget
  • Now is an excellent time to buy your first home as there are multiple government initiatives to help out first-time homebuyers

Most millennials are at an age where they have already established a stable career and are at a mid-point of their life where they’re thinking, “what’s next?”

While some might still be loving their bachelor freedom, for lots of them, settling down and owning a house that they can call home would be one of their end goals.

According to the CEO of IQI Group, Kashif Ansari, Millennials made up 70% of the purchases of new housing projects in 2020, which is a drastic increase compared to only 62% in 2019 and 48% in 2018. With these statistics in mind, we can see a trend of millennial first-time homebuyers in the market.


5 Common Mistakes and How to Avoid Them

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Image via Freepik

We understand that buying a house can be a daunting experience if it’s your first time. Not only is it a huge milestone, but the process of purchasing a home can be tricky as well. No worries, you came to the right place! With our tips, you can avoid all the average first homeowner’s mistakes and be on your way to owning your dream house.


1. Underestimating the costs of homeownership

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Image via

One of the most prevalent mistakes among younger homeowners is that they tend to underestimate the costs of owning a home, especially in the long run.

There are so many other elements when it comes to buying property, such as the 10% down payment, legal fees for the Sales and Purchase Agreement (SPA), stamp duty or even future renovation costs, paint jobs, furniture and more.

Young buyers usually overlook these “hidden” costs, and when their monthly bills start to pile up, it’s already too late.

How to Avoid: Get an estimation of all the costs and fees from the respective authorities to factor it into your home buying budget. You can also consult a professional real estate agent to show you the ropes. Agents are also specialised in certain locations; hence, they can help you estimate the average costs or fees of technical, legal or home services.


2. Overlooking first-time homebuyer programs

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Image via Malaysian Institute of Estate Agents

This mistake is one that a lot of homebuyers regret making down the line. You only get to be a first-time homebuyer once in your life. Hence, you wouldn’t want to miss out on the benefits of various government initiatives designed to help you in your journey to owning your first home.

These programs typically offer special exemptions or subsidies that can save you a lot of money, which I’m sure you’d rather spend on decorating and designing your house.

How to Avoid: 2021 is the perfect year to buy your first home as banks offer lower mortgage interest rates! There are multiple government programs for first-time homebuyers, such as stamp duty exemption until 2025, PR1MA’s rent-to-own programme, Residensi Wilayah (RUMAWIP) and Skim Rumah Pertamaku (SRP). It’s not too late to leverage on these government initiatives and get yourself a deal while buying a house.


3. Ignoring your credit score

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Image via AARP

Your credit score is the first thing banks will look at before approving your loans! Not only will it affect your loan’s approval, but it also plays a part in the interest rate of your loan.

The co-founder of, Jared Lim, stated that there had been a critical drop in loan approvals of housing loans as a result of the Covid-19 pandemic. He explained that banks were hesitant to approve loans as they could not gauge lenders’ ability to withstand the economic shocks and repay their loans, especially with the six-month moratorium implementation on loan repayments.

Thus, now more than ever, it is essential that you have a good credit score to convince the banks that you’re creditworthy and can repay your debts on time.

How to Avoid: Before applying for a loan, take a few months to improve your credit score by paying your bills and credit cards on time. The less debt you have, the higher your score! Check your credit report as well and correct any mistakes. Who knows, a slight miscalculation on your credit report could be affecting your loan eligibility.


4. Putting your eggs in one bank basket

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Image via The Edge Markets

Every bank has a different package to offer when it comes to mortgages. Besides looking at the interest rates, there are other factors to take into account — for instance, customer service, repayment terms and bank policies.

Not doing your research and just going with your favourite bank or the bank your parents recommend is just going to rob you of a possible good deal.

How to Avoid: Just like how you contemplate a few options when you shop for homes, do the same with your loans. Better yet, once you receive the Offer to Purchase and the Sale and Purchase Agreement (SPA), start applying to a few banks. This way, you will have more options to choose from and will most likely get a loan approval within the limited time frame given to execute the SPA.


5. Not getting your loan pre-approved

first-time homebuyer Pokok.AsiaImage via Hong Leong Bank

Now that we know how fussy banks can be when it comes to loan approvals, don’t you think getting your loan pre-approved sounds like the best next thing?

Imagine finally deciding on your dream house only to find out it is way above your price range. Devastating, isn’t it?

So many homebuyers face this problem as they overestimate how much banks were willing to loan them. Especially if it’s your first house loan, we’re pretty sure you have little to no knowledge of your loan eligibility.

How to Avoid: Consult a mortgage expert to determine how much the banks will loan you for your home purchase. This way, you’ll have a clearer picture of the affordable price range for you. It can also make your buying offer more competitive because you’ll be able to show sellers that you can back up your offer.

first-time homebuyer Pokok.Asia

Image via Universal Buyers Agents

Buying your first home is a once in a lifetime experience. With these tips, you’re on your way to purchasing your first house with as little hiccups along the road as possible! Just a reminder that the HOC is ending on 31 May 2021. So don’t miss out on this chance to grab the best deal for your home purchase.

Are you planning on buying your first home anytime soon? Share with us in the comments below.

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