What does it take to own a home at 25?

There are many things you would consider buying at 25 years old and a house is rarely in the top 10 things you need or want to buy. Even if you believe it’s a good idea, is it financially possible?

First of all, it takes years to save up for a downpayment. And if you are earning an average income of RM2,500 – RM3,000, you may not be eligible to get a mortgage for a home of your choice.

A RM300,000 home will require you to earn a minimum of RM3,500 in order to get a 30-year mortgage and you must be able to commit RM1,400 in monthly repayments.

Let’s say you have sufficient funds for a down payment now because you have been saving and working part-time. If you are still not eligible for a mortgage, you can delay the purchase by working your way up towards a RM3,500 salary – which will take another 2 – 3 years.

It is possible that you will buy your first home before turning 30 but property prices would have gone up by then. You may not get the same value for a RM300,000 house.

Here’s an alternative.

Through FundMyHome, you can own a home with relatively low barriers to entry.

Afiq Abidin entered the job market not long ago and didn’t think that owning his first home at 25 years old was possible. With FundMyHome, he is now the proud owner of a home in Semenyih.

Under FundMyHome, you only need to pay 20% of the property price to own the home and the other 80% will be contributed by institutional investors. No mortgage required.

With the 20% down payment you already have, you can have a 20% stake in the home immediately. And for 5 years, there will be no monthly repayments to worry about!

Instead, you can leverage on these 5 years to:

1. Improve your finances

Pay off any debt and have the flexibility to manage your finances properly. You also have some breathing room to utilise your salary increments and bonuses for other things – that epic adventure you wanted to make at 25, with some delayed gratification, you can do it at 28 on a less tighter budget.

2. Build good credit score

If you have taken a personal loan to pay for the 20%, you can start building good credit rating by making your repayments on time. This will put you in a better position to get a mortgage from the bank when you’re ready.

3. Earn passive income

You can rent out a spare room for a couple of hundred ringgit to relieve your finances. Or if you need to, you can also rent your home out within the 5-year commitment period with FundMyHome.

By the end of 5 years, you must decide if you want to continue staying by refinancing the home through FundMyHome or via a mortgage, or sell it.

Remember, you have a 20% equity in the property.

If you had put RM60,000 for a RM300,000 property through FundMyHome, you will get it back if you can sell it for the same value at Year 5 (an independent valuation will be conducted to determine its prevailing value).

Through FundMyHome, it is possible to own a home at 25 and be better off by 30. 

No EPF, No Problem. You Can Still Own a Home!

The Chief Executive Officer (CEO) of the Employees Provident Fund (EPF), Tunku Ali-zakri Alias, announced recently that the rise of the gig economy is causing a decline in EPF contributions and EPF may cease to exist in our lifetime.

The gig economy is a growing part of Malaysia’s workforce and we have observed a trend where demand for co-working spaces is taking over prime office locations. Kelly Services Inc. reported that 31% of the global workforce are gig workers. Such trends are indicative of a new economy that’s thriving with income opportunities.

There is one problem though. Freelancers and self-employed workers often cannot show any steady income documentation and this makes it difficult to get a bank loan, including a mortgage to buy a home.

If you are self-employed, these are the documents you need to submit to apply for a home loan:

  • Identification Card – NRIC (copy)
  • Property Booking Receipt
  • Vendor Sales & Purchase Agreement/Title (copy)/New Sales & Purchase Agreement
  • Latest 6 months Company Bank statement
  • Latest 6 months Personal Bank statement
  • Deposit statement eg. Fixed Deposit, ASB or Bonds (if any)
  • Business Registration Number

Unless you have been practising good bookkeeping to build up a credit-worthy profile, these documents will simply be.. daunting.

Let’s say you are running a food truck business at night and during the day you freelance as a designer. You may be earning a decent amount on average and you are happy. You know you can afford the monthly repayments of a home loan. Yet, you may be rejected because you cannot show a steady stream in your 6-months statement due to fluctuations in your gig.

Traditional financing mandates have made it difficult for non-salaried employees to get a mortgage and own a home.

What if we can rewrite the rules?

What if you can now buy a home with only this:

  • Identification Card – NRIC (copy)
  • Property Booking Receipt
  • Vendor Sales & Purchase Agreement/Title (copy)/New Sales & Purchase Agreement
  • Latest 6 months Company Bank statement
  • Latest 6 months Personal Bank statement
  • Deposit statement eg. Fixed Deposit, ASB or Bonds (if any)
  • Business Registration Number

Here’s the promising news for prospective home owners from the gig economy.

FundMyHome offers an alternative solution for first time homebuyers to purchase a home up to a value of RM500,000 without a mortgage.

Buyers need to pay only 20% of the property price and institutional investors contributes the remaining 80%. This covers 100% of the property’s value.

As a result of this shared equity, buyers do not need to get a mortgage and they enjoy zero monthly repayments for 5 years. Meanwhile, investors benefit from a share of any upside at the end of 5 years.

Now, let’s think outside the box for a minute.

The buyer owns 100% of the home with a one-time payment. You sign the SPA, move in and stay for 5 years – the commitment period. In these 5 years, you have a bit of flexibility to plan your finances and personal growth. If you need to move out any point within the 5-year period, you can rent it out and earn rental income.

At year 5, you are now ready to either refinance the home or sell it. If the property has not gone down in value, you will get your equity back (your portion of the 20%) upon sale. This means that you would have STAYED FOR FREE for 5 years!

The question to ask yourself, is…

If you are self employed and trying to get on the property ladder, what can you afford now? And how much time or flexibility do you need to achieve your financial goals?

With FundMyHome, you are given a chance to lock in a portion of your savings in a property now. You have 20% equity with no additional monthly repayments. At year 5, you may be better off if you have been disciplined in managing your cash flow.


Deloitte reported that self-employment is likely to triple to 42 million workers by 2020, with millennials leading the way.

More people are turning to alternative work and many aspire to own a home but are turned away by the traditional barriers of entry, particularly in getting a mortgage. FundMyHome can serve these needs and help them own a home.

If you’d like to understand if FundMyHome is right for you, give our consultants a call at 03-77328820 or WhatsApp them directly at +6 018 388 4165.


Landlords get richer if most Malaysians can’t afford their own homes

Frankly Speaking comment in the latest issue of The Edge Malaysia (Nov 12 – 18, 2018)

The issue is not availability. It is affordability.

That is why there are hundreds of thousands of unsold houses and apartments across all price ranges. Indeed, homes below RM500,000 make up around 50% of unsold residences. These include affordable homes built by the government via PR1MA.

There are two sides to affordability. On one side is income and access to financing, and on the other is the price of the home.

Home prices have rocketed in recent years while incomes have not. This is a structural fault of the economy that will take years and much pain to solve, if it can be fixed at all.

As a result, according to Bank Negara Malaysia, those earning an average Malaysian income can only afford to buy homes that are around RM300,000.

If we follow this guideline, most Malaysians should not and cannot afford to buy homes.

Renting is what the central bank encourages.

But renting does not build equity or savings for the future. The real winner, if most Malaysians choose to forever rent, will be the property owning class, who are likely to own multiple properties.

It will be a case of the well-to-do landlords getting richer while the less well to do and the poor become permanent renters, unable to build equity in the form of a property, if access to home ownership is restricted.

What are the solutions?

If incomes are too low while home prices are too high, the obvious solution should be to raise income by, say 25%, while also forcing the prices of unsold homes down by 25%.

Affordability would improve by 50% and all the unsold stock could be cleared and hundreds of thousands more Malaysians could own their own homes.

This is just a mathematical calculation. Economics and finance, however, do not work that way.

We know the damaging consequences of raising wages across the board by 25% in one fell swoop just to address the housing affordability problem. Same with forcing home prices down by 25% – it would destroy the value of all properties, not just the unsold ones, by the equivalent amount. It destroys wealth.

Because their incomes did not rise fast enough, many Malaysians resorted to bank borrowings to own their dream homes. This expansion in debt from 2009 to 2015 has made Malaysian households one of the most leveraged in Asia today.

This is why a solution has to be found whereby debt should no longer be the ONLY way for people, especially young Malaysians, to buy a home.

Under the newly launched FundMyHome scheme, in which equity put in by investors replaces lending by banks, first-time homebuyers will not be burdened with mortgage payments in the first five years of ownership.

This five-year breathing space is critical to allow them to build up their savings as their income rises, thereby enabling them to be in a better position to take up a normal mortgage later.

In short, FundMyHome gets them past the door into homes that they would otherwise be shut out of. This way, a home of their own may no longer be just an elusive dream for many young Malaysians from less well-to-do families.