Seven new rules for first time home buyers

Here are some useful tips.

Here is a rule of thumb. If your repayment is to be kept at 30% of your income (plus 5% going towards maintenance, tax, insurance and other ownerhshop cost), and you take a 30 year loan at 4% interest, the cost of your home should be not more than 5 years of your income.

If your combined income (two working parents) is $50,000, you should buy a property for not more than $250,000. If you have the 20% cash payment, you can go up to $300,000.

Do not overstretch and buy a more expensive property (including HDB flat). Do not be misled by the low interest rate charged on your HDB loan now - as the interest rate is likely to increase in the future. It can be a burden on your finances.