How To Avoid A Costly First Home Mistake In Singapore: A Checklist For Married Couples

One of the most challenging milestones is getting married, because a whole host of other major decisions – in rapid succession – tend to follow right after. One of these is picking out the first home; and because everyone has different ideas on style, purpose, budget, and location, it can lead to a lot of arguments (or worse, being stuck in the wrong location for five years). Taking 20 to 30 minutes to go over this checklist could save you years of regret, not to mention financial damage:

A quick note on different property types

When we first started this article, we intended to divide it between different property segments; but in the end, we realised most of the following apply regardless of the type of home you’re buying. There is, however, just one key issue that’s highly specific to property types – and we’ll include that here:

What are your shared thoughts on facilities and recurring costs?

You can probably guess what we’re getting at: do you and your spouse agree on the importance of having a pool, gym, clubhouse, etc? Depending on your answer, you may prefer a condo, as opposed to a flat or walk-up apartment. 

Your spouse’s background can factor into this quite a bit. For someone used to HDB living, for example, some condos can seem devoid of facilities: there may not be an all-night coffee shop nearby, or a market centre anywhere within walking distance. It’s not just about a condo being more expensive, but also whether the “exclusive” and “quiet” surroundings strike your spouse as a drawback.

There’s also the question of how “closed” you want your home to be. Condos have private security, who prevent unwanted solicitation; people can’t come and stick flyers on your door. But at the same time, there could be less communal interaction (as an aside, you’ll see your MP far less often, as they tend not to visit condos). 

The fiscal element to this is the maintenance fee: you may feel it’s worth the $400+ per month to get a pool, tennis court, and so forth. But if your spouse is more of a saver, they may baulk at that price tag – especially when HDB conservancy charges rarely go beyond even $100 a month. 

Also, work out how you’ll split the maintenance fees: if one spouse is still at an entry-level job, for instance, it can feel quite oppressive to just split it 50-50. 

1. What is the intended purpose of the property?

We can divide this mainly into three categories:

• Owner-occupancy: The focus is on having a convenient and comfortable home, never mind the financial gains.
• Owner-investor: You’re going to be living there, but the idea is to sell it at some point and see a profit. That can mean either upgrading, or right-sizing further down the road.
• Pure investor or landlord: It’s purely an investment asset, like a stock or bond. You may not even be living there, but renting it out instead (e.g., you’re living with the in-laws, but buy a small resale condo to rent out).

This is probably the most important discussion to have, as all of the above can work at cross-purposes. If you’re buying a property to rent out, while living with your in-laws, then issues like proximity to your workplace, schools, hang-out areas, etc. are quite irrelevant. What matters will be your rental yield and potential gains.

Conversely, if your aim is to have your children be near a good school, have a lot of space when mum or dad stay over, etc., then your property may not make the most sense financially: it could justify a high Cash Over Valuation (COV) for a flat, because it’s the only one that meets your own-stay requirements; or it could be a property that’s ideal for your lifestyle, but which hasn’t got universal appeal.

We know the answer to the question “Do you want gains or a comfortable home” is always both, but compromises have to be made. So discuss your plans, and make the right compromises according to those plans.

2. What would be a fair financial contribution?

This can get sticky, especially if one spouse earns significantly more than the other. Quite often, the ownership of the property doesn’t reflect the contributions made to the mortgage, renovations, maintenance, etc.

Are you okay with an arrangement where you pay more or all of the mortgage, while your spouse is still a co-owner?

For some couples, a 50-50 split for all the bills doesn’t work (e.g., if one side makes $3,000 a month and the other makes $15,000, and a condo was bought, it’s unlikely the party making $3,000 can handle even half of a monthly $4,000 repayment.)

If you pick a method of holding such as tenancy-in-common, where each spouse can own a percentage of the property, a common split is 99-1. This is so that, when you transfer the property entirely to one party, you only pay stamp duties on the one per cent. But this also means that, in the event of situations like divorce, you might be holding on to the one per cent, even if you paid more for the mortgage and renovations.

This is something best discussed with both your spouse and your lawyer.

3. Are you going to accept help from one side’s parents?

It’s not uncommon for parents to help children buy their property, in a pricey market like Singapore. But not everybody takes this the same way, and you’ll want to have a pre-emptive conversation about this.

For some couples, it’s uncomfortable to know that the in-laws are providing most or all of the down payment, renovation, etc. One spouse might not like the sense of obligation that comes with it, or the feeling of reliance. Likewise, the other spouse may see the rejection of such an offer as illogical; especially if not accepting the help means losing out on a unit they really want.

If you suspect one or both sides’ parents are going to offer to contribute, have this discussion first: then when the offer does get made (it can happen at the last minute), it won’t cause an argument.

You may also want to agree on limitations or conditions of accepting such help (e.g., the contributing parents aren’t going to also start dictating renovation terms, or when you should sell the property.)

4. Do either of you have problems getting mortgage insurance?

This is the insurance that pays off your outstanding mortgage, in the event of death (or permanent disability, depending on the policy).

The problem is, not everyone qualifies. If one spouse has pre-existing conditions like diabetes, heart problems, etc., they may not be covered for those; and we have come across situations where one spouse is uninsurable. This is not something you want blindsiding you or your spouse, in case the worst ever happens.

If one of you is uninsurable, it can impact your decision about your loan quantum (you may want to get a cheaper property and borrow less), as well as how you budget for the property. There may be other insurance alternatives, but this is down to a conversation with your financial advisors. The point is: don’t leave your spouse saddled with the risk of a massive mortgage, in the event you’re no longer around.

The HDB Home Protection Scheme (HPS) is supposed to be automatic, if you’re paying for your flat with CPF (it’s optional if you pay in cash). For private housing, it’s down to you to buy your own mortgage insurance.

5. Who is doing most of the cleaning and maintenance, and how much can they handle?

If you’re getting a landed property with multiple floors, then probably both of you need to be cleaning, or you’ll need a domestic helper. The same goes if you or your spouse have mobility issues.

Having this discussion will help the two of you agree on size and layout. If your spouse is doing most of the cleaning alone, for example, a double-volume (high ceiling) unit may not be a great choice, lest they’re willing to get on a ladder and change the bulb, clean the ceiling, etc.

The spouse doing most of the cleaning and maintenance should also have more of a say in the renovations, as they’re more impacted by the design choices.

6. Do you have matching or very different routines?

If you have different routines (e.g., one starts the day or comes home much later than the other), it can affect certain layout choices.

If both of you leave work at very different hours, for example, you might be able to afford to have just one bathroom. But if you both need to leave at seven sharp, then having two bathrooms can be a real luxury (i.e., no banging on the door asking your spouse to hurry up, while you have a nervous breakdown over the time).

For families, an efficient dumbbell layout can sometimes work against you, if you have very different routines. For example: a dumbbell layout often positions bedrooms on both ends of the living room. If you happen to work odd hours and come home at midnight, then coming in from the front door, settling down, watching a movie, etc. could create disturbances in the adjoining bedrooms. So perhaps an old-school layout, with all bedrooms tucked down the corridor from the living room, might work better.

Also, if you both have a similar routine of working nights, and are home in the late morning or afternoon, you may not mind a lower-floor unit: the noise tends to be lower as most other people work during those hours. This could save both of you some money, as lower floor units are usually cheaper.

7. Outline spiritual beliefs and needs early on

Even if you don’t share the exact same beliefs, it can have an impact on your spouse; and it can result in resentment if the property choice ignores these.

A typical example is picking a home near a hospital, which some people find unnerving because of taboos, or just noisy. Other examples include features like beams in the bedroom, or a facing/unit number that’s considered inauspicious.

There may also be a requirement for religious altar spaces, depending on your beliefs. This should be discussed beforehand, so you can pick a fitting layout.

8. Set the parameters on how much you’ll spend, and modes of payment

The general rule of thumb for housing affordability is 3-3-5. That means you have saved up 30 per cent of the capital needed, the monthly loan repayment is 30 per cent of your household income*, and the total price is five times your annual household income.

This would mean, by the way, that a median-income household ($11,297 per month as of 2024) should be looking at an HDB flat rather than a private property, as the guideline would cap their maximum property price at around $677,820. 

That said, it’s a little different for newlyweds in varied financial situations. Factors like help from parents, one spouse already owning a property or earning much more, etc. could shift the numbers. But it’s important to come to a shared conclusion on how much you’re both willing to spend, and on how you’ll pay it.

That means agreeing, for instance, on whether you’re using cash, CPF, or a mix to pay for the property. Remember you have to refund whatever CPF monies used, with the 2.5 per cent interest, when you sell the property – so this may be a factor for couples hoping to upgrade. But at the same time, it may not be feasible for a young couple that’s just starting to service the home loan in cash.

An important point to consider: when do you want to pay off the mortgage?
A common dispute arises when one spouse, uncomfortable with the idea of loans, wants to accelerate home loan repayments. This can mean wanting to take a shorter loan tenure, or to make voluntary early repayments** to end the mortgage fast.

(This may also not be a bad idea by the way, if one spouse’s health is not good, and they can’t get mortgage insurance).

Some practical considerations need to come into play here, such as compromises you’d have to make to pay off the mortgage fast. We’ve met couples who have managed to pay off their flats even before reaching 40, but not without sacrificing lifestyle quality (and for a rather long period too). This is something for both spouses to agree on, preferably before the loan is even taken.

*This is a requirement for HDB properties anyway, under the MSR

** For bank loans, there may be a penalty for early repayments within certain periods, like the lock-in period; so early repayments should be made only after that. There’s no early repayment penalty for HDB loans. 

9. Where do both of you feel most at home, or have dependents?

The toughest decisions come when one spouse is an Eastie, and the other is a Westie. In these circumstances, something has to give; and one should recognise the sacrifice of the other.

Perhaps more importantly, one spouse may have dependents (e.g., a parent who needs care) that the other doesn’t. This may prevent them from looking beyond a certain radius, and this has to be discussed early: the other spouse may need to give up their dream neighbourhood.

Time is also a factor here: you might agree to live in a certain location for a certain duration (e.g., until a dependent is no longer present, or only as long as your employment at a nearby workplace lasts). In some cases, this could make rental a smarter decision than buying for the both of you; at least for a time.

Beyond this, have a discussion on what sort of township suits you: Pasir Ris is more laid-back and has good beach access, but may be too fringe for someone who likes the convenience and urbanity of Paya Lebar. Some may love Orchard so much, that they’re willing to stay even in the worst and most run-down condo they can afford there; but it may be too much of a sacrifice for a spouse who hates crowds anyway.

Compromises are probably unavoidable here but again, aim to make the right compromises.

Finally, it’s a big advantage if you’ve rented a home together before

Couples who rent as their first home tend to have an easier time when they get around to buying. By then, they have a better sense of each other’s needs (and pet peeves), and probably a shortlist of ideal properties.

This is yet another reason that renting is not a waste of money. If it’s the first time you’re settling down with another person, it’s a beneficial trial run before the mortgage comes.