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A Malaysian compiling Lots of tips and advices on personal financial planning - Protect, accumulate, preserve, and manage your WEALTH wisely!

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I write regularly about personal finance topics from a Malaysian's point of view. Hopefully with better financial education, you will live a better and balanced life. Follow me at http://twitter.com/moneytips

Buy House before Car

Refer to my previous post about the cheapest consumer debt: Mortgage - The Cheapest Debt , it is wise to keep the mortgage as our only debt.

Most people hesitate whether to buy a new car first or a house? Let’s see the pro and con:

Car House
Maintenance, petrol, servicing cost about RM300-500/month Maintenance, electricity, water bill, assessment cost about
RM200/month
Most likely Depreciate in value Most likely Appreciate in Value
Loan: Hire Purchase Agreement
Only a little bit discount if we want to pay advanced installment
Higher interest charge
Loan: Mortgage
Advanced payment will settle on the principle loan
Daily rest
Lower interest charge

We can buy the house first, then serve the installment for a few years. After we build up more equity in the mortgage, we can refinance the house to higher loan amount. The extra cash we get can be used to buy our dream car.

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