Financing a home
We are all quite familiar with the concept of leverage when it comes to financing a property purchase.First work out what you can afford as well as find out what you need to pay for.Buying a home involves knowing how much loan can get from the bank,how much cash need for upfront payments,whether CPF is allow for downpayment, how much monthly housing loan installments and conservancy charges need to be pay.
Cost Involved:
- Option fee
- Stamp duty
- Legal cost
- Down-payment – how much you pay and the amounts payable in cash and from CPF savings depend on the value and type of property you buy as well as whether you have an existing housing loan
- Agent or salesperson’s commission and fees (Not applicable for buying New launch)
- Fire Insurance- All lenders require you to insure your property against fire. The value is determined by a valuer and the premium is paid annually. At present, all banks and most financial institutions’ packages come with free fire insurance from 1 to 5 years.
- Home Protection Scheme (HPS)- CPF Board requires all members who are using CPF to pay their monthly instalments for their HDB loan to be insured under HPS. However, this is subject to members’ eligibility for coverage based on their health. HPS insures members up to 65 years of age.
- Other miscellaneous cost:
Bank Loan Eligilblity
Banks use Loan-to-value (LTV) ratio and Financial commitment-to-income ratio to assess your loan eligibility.
Summary of the new LTV Limits
Are you a 1st Timer?
- Minimum Cash DownPayment
There is no change to the existing minimum cash down payment requirement for individual borrowers who have no outstanding housing loans and are applying for a housing loan.
- Additional Buyer Stamp Duty
1st Property purchase for Singapore Citizen, you do not have to pay ABSD.
For PR ABSD 5%.For Foreigner, it has been revised from 10% to 15%.
Are you a 2nd Timer?
- Minimum Cash DownPayment
WEF 12 January 2013, the minimum cash down payment required for such individuals will be raised from 10% to 25%.
- Additional Buyer Stamp Duty
2nd Property purchase for Singapore Citizen ABSD 7%
For PR ABSD from 3% to 10%.For Foreigner, it has been revised from 10% to 15%.
*If you are serious about buying a property, always get an in-principle approval (IPA) from the bank prior to making the offer so that you do not miss any good opportunity due to delays.