Buying a New Home Money Matters and the Family – Part 2 – Video 1

One of the videos ĠEMMA produced with the Central Bank of Malta on money matters and the family series.

Let me introduce the ĠEMMA family. I am Tony. I am Maria’s husband. I work as a manager in a large business in the services industry. My wife, Maria, is 40 years old and works in her father’s family business. We have two children: Matthias, our son who is 11 years old and is now in secondary school, and Angele, our daughter, who is 17 years old and is finishing upper secondary school this scholastic year.

My younger brother, Adrian, 33 years old, and Carla, his wife, have decided to buy their family home. They have been married for five years and have two young children. My parents helped them out by providing them with their summer apartment until they were financially stable to be in a position to buy their dream house.

Being the elder brother, I shared with them the ten golden rules Maria and I had put together when we were looking for a home. Here they are:

1. Important that you are realistic.
2. Keep in mind that you will pay the actual capital and the monthly mortgage and the interest you will accrue on that mortgage in buying your home.
3. Make sure that the monthly mortgage is such that you can afford it and that it does not squeeze your disposable income, making managing your monthly budget and the mortgage payment challenging to keep up with.
4. Being a first-time buyer make sure that you obtain the necessary information on assistance schemes that the government may have when buying your house.
5. Keep in mind that apart from saving for a deposit, you will incur other expenses in the process of buying your home – which includes:

• Fees to a notary to research the property.
• Insurance on your new property and furnishings.
• Personal life insurance to cover your loan in the event of your passing away.
• Bank’s fees for the provision of your loan.

1. In buying the house, take into account factors that are likely to increase the value of the investment of your home over time:  the area, the neighbours, access to shops and buses, parking, potential development, space to use renewable energy technologies like PV, noise, the extent of the locality as a social hub amongst other matters.
2. Do not accept the first price offered to you.  Get an architect to look over the house, ensure it has all the planning permits, and see whether you have to do minor or substantial works and maintenance once you buy the house.  Once you have the whole picture, pitch an offer lower than the amount you decided to invest and haggle accordingly.
3. Do not allow yourself to be tempted to buy a house that is more like the dream house you always wanted but costs much more than the target investment you set for yourself.
4. Do not buy a house that fails to meet planning and building regulations and for which there are no planning documents.  Make sure that any alterations or additions made to the property are legal.  If you buy a house with planning infringements, you most likely find it difficult to sell in the future, or you may be faced with the situation that you have to pay the necessary penalties to rectify illegal structures before you can sell the house.
5. If you buy an apartment, keep in mind that you will have to pay condominium costs.  Condominium costs cover expenses such as:

• General maintenance of the building’s common areas.
• Utilities.
• Insurance.
• Additional services and amenities, such as a swimming pool, gym, security guard or concierge.