Applying for electricity, water and gas utilities account in Singapore has never been easier. You just need to submit an application form along with couple of documents and you will have electricity, water and gas supply in your home as fast as the next day after your application. You only need to transact with Singapore Power Services (SP Services) to facilitate the application of the three utilities. SP Services is a company that supplies electricity to the residential areas in Singapore. It is appointed as agent for the application, billing and payment collection of the electricity, water and gas utilities.
You can however also do it on-line.
Showing posts with label All things about Property -Housing purchase. Show all posts
Showing posts with label All things about Property -Housing purchase. Show all posts
Saturday, August 1, 2009
Sunday, June 15, 2008
Choosing the Right Mortgage Loan
June 15, 2008
Choose the right mortgage deal to save more
By Grace Ng Finance Correspondent
When rates head south, you can benefit by taking up a mortgage linked to publicly available rates such as the Singapore Interbank Offered Rate (Sibor). This benchmark rate is used by banks to determine mortgage rates for home loans, as it is the cost at which banks borrow funds from each other.
Banks such as United Overseas Bank, OCBC and Standard Chartered offer packages with rates linked to the Singapore Swap Offer Rate (SOR), which is made up of the Sibor plus lending costs incurred by the banks.
The three-month Sibor has been falling steadily, dropping from over 3.5 per cent last year to as low as 1.24 per cent in late April this year. This means some customers have been enjoying rates of about 2 per cent for the first few months of their loans. Not surprisingly, many customers have either taken up new Sibor-linked packages, or refinanced from a fixed-rate package to a Sibor-linked one.
But if rates are high and look set to climb higher, it is best to lock in a rate through either a fixed-rate mortgage for a few years, or at least a rate linked to the 12-month Sibor, which is fixed for a full year.
The three-month Sibor was gyrating within a tight range but is now climbing to about 1.43 per cent. The 12-month Sibor has moved up sharply to 2 per cent.
Singapore rates track the United States Federal Reserve rate, currently at 2 per cent. But the latter looks unlikely to climb sharply in coming weeks. Opinions are divided over whether the Fed will raise rates to curb inflation or lower them further to stave off a deep recession in the US.
So what do you do when rates in both the US and Singapore are relatively flat, the local property market is softening and the economic outlook is uncertain?
It depends on the type of customer you are.
New home-buyers will face higher fixed-rate mortgage prices. This is because local and foreign banks alike jacked up their rates last week to an average of about 3.7 per cent annually for three years.
This raises the cost of locking in mortgage rates for several years. It also makes packages with rates linked to the Sibor, which is still relatively low, look more attractive than fixed-rate loans.
If you are an existing customer with a loan whose value is less than $300,000 and you switch to a lower-rate loan, penalties such as cancellation fees could wipe out any savings from refinancing, notes Mr Bryan Ong of mortgage consultancy bcgroup.com.sg.
But if your loan value far exceeds $300,000, you could still save a great deal by sticking with a Sibor-linked package until the three-month Sibor exceeds 2.5 per cent to 3 per cent, he added.
Many will remember that, just a year ago, such packages were actually more costly than fixed-rate ones. In June last year, for instance, when the 12-month Sibor was 2.56 per cent, DBS' package stipulated 3.81 per cent for the first year, which factored in a mark-up of 1.25 per cent added by DBS.
Those looking to sell their investment properties in the coming months might want to keep to a three-month SOR loan until they offload their properties, as shorter-term rates are currently lower than long-term ones.
But for those taking a wait-and-see attitude, it might make more sense to take up a 12-month Sibor-linked package, so as to lock in the current low rates. That could give you some peace of mind until the middle of next year, when it will probably be clearer just how bad the economic slowdown in the US and Asia is likely to get, and where rates are headed.
Banks are now differentiating their products by varying the lock-in periods and the penalty fees for cancelling a package within the first year. Some banks offer rates as low as 1 per cent of the total loan quantum, while others charge up to 2 per cent.
Others, like Standard Chartered, have introduced interesting features such as a guarantee that the three-month SOR will not exceed the 2.98 per cent annual rate for the first two years.
Singaporeans like Mrs X will always be quick to leap after the cheapest rate in town. But rather than just eye-balling the current teaser prices, customers should also scrutinise the general rate trends, as well as cancellation penalties, to make sure they get the best package, be it a fixed or floating rate mortgage, all year round.
Choose the right mortgage deal to save more
By Grace Ng Finance Correspondent
When rates head south, you can benefit by taking up a mortgage linked to publicly available rates such as the Singapore Interbank Offered Rate (Sibor). This benchmark rate is used by banks to determine mortgage rates for home loans, as it is the cost at which banks borrow funds from each other.
Banks such as United Overseas Bank, OCBC and Standard Chartered offer packages with rates linked to the Singapore Swap Offer Rate (SOR), which is made up of the Sibor plus lending costs incurred by the banks.
The three-month Sibor has been falling steadily, dropping from over 3.5 per cent last year to as low as 1.24 per cent in late April this year. This means some customers have been enjoying rates of about 2 per cent for the first few months of their loans. Not surprisingly, many customers have either taken up new Sibor-linked packages, or refinanced from a fixed-rate package to a Sibor-linked one.
But if rates are high and look set to climb higher, it is best to lock in a rate through either a fixed-rate mortgage for a few years, or at least a rate linked to the 12-month Sibor, which is fixed for a full year.
The three-month Sibor was gyrating within a tight range but is now climbing to about 1.43 per cent. The 12-month Sibor has moved up sharply to 2 per cent.
Singapore rates track the United States Federal Reserve rate, currently at 2 per cent. But the latter looks unlikely to climb sharply in coming weeks. Opinions are divided over whether the Fed will raise rates to curb inflation or lower them further to stave off a deep recession in the US.
So what do you do when rates in both the US and Singapore are relatively flat, the local property market is softening and the economic outlook is uncertain?
It depends on the type of customer you are.
New home-buyers will face higher fixed-rate mortgage prices. This is because local and foreign banks alike jacked up their rates last week to an average of about 3.7 per cent annually for three years.
This raises the cost of locking in mortgage rates for several years. It also makes packages with rates linked to the Sibor, which is still relatively low, look more attractive than fixed-rate loans.
If you are an existing customer with a loan whose value is less than $300,000 and you switch to a lower-rate loan, penalties such as cancellation fees could wipe out any savings from refinancing, notes Mr Bryan Ong of mortgage consultancy bcgroup.com.sg.
But if your loan value far exceeds $300,000, you could still save a great deal by sticking with a Sibor-linked package until the three-month Sibor exceeds 2.5 per cent to 3 per cent, he added.
Many will remember that, just a year ago, such packages were actually more costly than fixed-rate ones. In June last year, for instance, when the 12-month Sibor was 2.56 per cent, DBS' package stipulated 3.81 per cent for the first year, which factored in a mark-up of 1.25 per cent added by DBS.
Those looking to sell their investment properties in the coming months might want to keep to a three-month SOR loan until they offload their properties, as shorter-term rates are currently lower than long-term ones.
But for those taking a wait-and-see attitude, it might make more sense to take up a 12-month Sibor-linked package, so as to lock in the current low rates. That could give you some peace of mind until the middle of next year, when it will probably be clearer just how bad the economic slowdown in the US and Asia is likely to get, and where rates are headed.
Banks are now differentiating their products by varying the lock-in periods and the penalty fees for cancelling a package within the first year. Some banks offer rates as low as 1 per cent of the total loan quantum, while others charge up to 2 per cent.
Others, like Standard Chartered, have introduced interesting features such as a guarantee that the three-month SOR will not exceed the 2.98 per cent annual rate for the first two years.
Singaporeans like Mrs X will always be quick to leap after the cheapest rate in town. But rather than just eye-balling the current teaser prices, customers should also scrutinise the general rate trends, as well as cancellation penalties, to make sure they get the best package, be it a fixed or floating rate mortgage, all year round.
Saturday, April 19, 2008
Don't OVERPAY for your Home Loan
Don't overpay for your home loan! With over a hundred home loan packages available in Singapore, DENNIS NG discusses how to pick the right one.
If consumers hold the view that interest rates are likely to fall, choosing a housing loan package pegged to Sibor would enable them to automatically enjoy lower interest rates as Sibor moves lower.
WHAT interest rate are you paying on your housing loan? If you are paying 3.5 per cent or more, you might be overpaying. With the US Federal Reserve cutting interest rates, the Singapore Inter-bank Offered Rate, or Sibor, has been on a downward trend.
Sibor is the rate at which banks lend to one another. Currently, the three-month Sibor has fallen to about 1.4 per cent, down from about 2.5 per cent last year.
Banks have started lowering interest rates offered on housing loans to as low as 2.08 per cent. Thus, if you're paying an interest rate of 3.5 per cent or more, it might make sense for you to refinance your housing loan to enjoy interest savings.
For example, if your outstanding loan is $500,000 and you're currently paying 3.5 per cent interest with a remaining loan period of 20 years, the total interest savings for the next three years from refinancing can work out to $13,831.38. After factoring in the cost of refinancing, the net interest saving still works out to $13,331.38. Thus, by refinancing, you can be 'richer' by over $10,000.
Floating rate vs Sibor/SOR pegged packages: Each bank will usually set its own board rate and after deducting a 'discount factor', arrive at the floating (adjustable) interest rate charged to clients. The problem is that each bank will set its own board rate arbitrarily and there might be occasions when Sibor rates fall, and banks don't reduce the interest rates charged on floating (adjustable) rate packages.
Thus, in a bid to increase the transparency, some banks have recently introduced housing loan packages with interest rates pegged to Sibor or Swap Offer Rates (SOR).
The advantage of such packages is that as and when inter-bank offer rates move up or down, your interest rate would be adjusted as well - it would not be at the bank's discretion. Currently, Sibor/SOR have fallen below 1.4 per cent and interest rates charged on such loans can be as low as 2.08 per cent.
With the US expected to continue cutting interest rates in the next few months, Sibor is expected to remain low or even fall further in the next six to 12 months. Thus, if consumers hold the view that interest rates are likely to fall, choosing a housing loan package pegged to Sibor would enable them to automatically enjoy lower interest rates as Sibor moves lower.
Beware: Fixed rate packages typically come with lock-in periods. Some banks recently also adjusted interest rates charged on their fixed rate packages downwards to an average of 2.58 per cent for the first three years. However, such packages come with a penalty period of three years. Thus, such packages might not be suitable for consumers who intend to sell their property within the next three years, as they are liable to a penalty fee.
Should you apply for a housing loan now for properties purchased on a deferred payment scheme? You might have purchased a property on a deferred payment scheme and only need to take a loan when the project gets its Temporary Occupation Permit (TOP), which might be in 2009 or 2010. Should you apply for a housing loan now?
By applying for a loan now, you eliminate the risk of loan rejection should there be any adverse change in your financial situation in future, for instance, a pay cut or job loss when the property is ready.
You also eliminate the risk of banks granting a lower loan quantum should the property market turn and prices fall. To safeguard your interests, you can choose a loan package that allows you a free loan conversion so that you can switch to a better package should one be available nearer TOP.
Cash in on your property without selling it: With property prices having gone up in the past three years, you might now own a property whose value has doubled. In that case, your current debt-to-asset ratio might have fallen considerably.
For instance, say you bought a $1 million property three years ago and took an 80 per cent loan, or $800,000. Currently, the loan outstanding is about $750,000, while the current value of this property might have gone up to $2 million. This means your current debt-to-asset ratio is only 37.5 per cent.
How can you benefit from the rise in the property price without selling your property? You can consider taking an equity loan on the property. For instance, in the above example, subject to your credit score, banks might grant you an additional equity loan of up to $850,000.
To be conservative, you can consider taking up a lower equity loan of, say, $450,000, bringing your debt-to-asset ratio to a comfortable 60 per cent. You can use the $450,000 equity loan granted by the bank to start a business, or even to invest in another property. The interest rate on equity loans in Singapore is very low and can be as low as 2.2 per cent currently.
Should you pay off or reduce your housing loan?: The Singapore government has projected the inflation rate in 2008 to be about 5 per cent. On the other hand, the interest rate on housing loans is about 2.2 per cent.
Thus, we have a rare scenario of negative interest rates, that is, a person who takes a housing loan is actually ahead of someone who saves money in bank deposits because of the shrinkage of money from inflation.
On the other hand, interest rates on bank deposits have fallen to about 1.5 per cent. With inflation at 5 per cent, it means that a consumer is losing 3.5 per cent a year by putting money in bank deposits.
Instead of paying down your housing loan which charges low interest rates of less than 3 per cent, you can consider investing your cash in a stable investment that is not subject to large price fluctuations and offers higher returns than fixed deposits.
One example is UK-traded endowments, which have a guaranteed cash value and generate annual returns of 6-8 per cent.
How to choose a suitable housing loan?: There are over 113 different housing loan packages available in Singapore at any one time. Each package has its own unique features, with its own pros and cons and different terms and conditions. Consumers might be confused by the wide array of choices. In the last few years, with the emergence of independent mortgage brokers in Singapore, home loan shopping and comparison have been made easier.
Basically, an independent mortgage broker who knows your requirements can help you zoom in on the most attractive home loan packages suitable to your needs. You typically do not have to pay for the service of a mortgage broker as banks pay them a fee.
In more advanced countries such as the US and Australia, people usually apply for home loans through a mortgage broker rather than go to the bank directly. In Singapore, many people are still unaware of the services and benefits of engaging a mortgage broker, but things are likely to change with public education and increasing awareness.
Dennis Ng is a Certified Financial Planner with 15 years of experience in bank lending.
He co-founded an independent mortgage consultancy portal www.HousingLoanSG.com in 2003.
If consumers hold the view that interest rates are likely to fall, choosing a housing loan package pegged to Sibor would enable them to automatically enjoy lower interest rates as Sibor moves lower.
WHAT interest rate are you paying on your housing loan? If you are paying 3.5 per cent or more, you might be overpaying. With the US Federal Reserve cutting interest rates, the Singapore Inter-bank Offered Rate, or Sibor, has been on a downward trend.
Sibor is the rate at which banks lend to one another. Currently, the three-month Sibor has fallen to about 1.4 per cent, down from about 2.5 per cent last year.
Banks have started lowering interest rates offered on housing loans to as low as 2.08 per cent. Thus, if you're paying an interest rate of 3.5 per cent or more, it might make sense for you to refinance your housing loan to enjoy interest savings.
For example, if your outstanding loan is $500,000 and you're currently paying 3.5 per cent interest with a remaining loan period of 20 years, the total interest savings for the next three years from refinancing can work out to $13,831.38. After factoring in the cost of refinancing, the net interest saving still works out to $13,331.38. Thus, by refinancing, you can be 'richer' by over $10,000.
Floating rate vs Sibor/SOR pegged packages: Each bank will usually set its own board rate and after deducting a 'discount factor', arrive at the floating (adjustable) interest rate charged to clients. The problem is that each bank will set its own board rate arbitrarily and there might be occasions when Sibor rates fall, and banks don't reduce the interest rates charged on floating (adjustable) rate packages.
Thus, in a bid to increase the transparency, some banks have recently introduced housing loan packages with interest rates pegged to Sibor or Swap Offer Rates (SOR).
The advantage of such packages is that as and when inter-bank offer rates move up or down, your interest rate would be adjusted as well - it would not be at the bank's discretion. Currently, Sibor/SOR have fallen below 1.4 per cent and interest rates charged on such loans can be as low as 2.08 per cent.
With the US expected to continue cutting interest rates in the next few months, Sibor is expected to remain low or even fall further in the next six to 12 months. Thus, if consumers hold the view that interest rates are likely to fall, choosing a housing loan package pegged to Sibor would enable them to automatically enjoy lower interest rates as Sibor moves lower.
Beware: Fixed rate packages typically come with lock-in periods. Some banks recently also adjusted interest rates charged on their fixed rate packages downwards to an average of 2.58 per cent for the first three years. However, such packages come with a penalty period of three years. Thus, such packages might not be suitable for consumers who intend to sell their property within the next three years, as they are liable to a penalty fee.
Should you apply for a housing loan now for properties purchased on a deferred payment scheme? You might have purchased a property on a deferred payment scheme and only need to take a loan when the project gets its Temporary Occupation Permit (TOP), which might be in 2009 or 2010. Should you apply for a housing loan now?
By applying for a loan now, you eliminate the risk of loan rejection should there be any adverse change in your financial situation in future, for instance, a pay cut or job loss when the property is ready.
You also eliminate the risk of banks granting a lower loan quantum should the property market turn and prices fall. To safeguard your interests, you can choose a loan package that allows you a free loan conversion so that you can switch to a better package should one be available nearer TOP.
Cash in on your property without selling it: With property prices having gone up in the past three years, you might now own a property whose value has doubled. In that case, your current debt-to-asset ratio might have fallen considerably.
For instance, say you bought a $1 million property three years ago and took an 80 per cent loan, or $800,000. Currently, the loan outstanding is about $750,000, while the current value of this property might have gone up to $2 million. This means your current debt-to-asset ratio is only 37.5 per cent.
How can you benefit from the rise in the property price without selling your property? You can consider taking an equity loan on the property. For instance, in the above example, subject to your credit score, banks might grant you an additional equity loan of up to $850,000.
To be conservative, you can consider taking up a lower equity loan of, say, $450,000, bringing your debt-to-asset ratio to a comfortable 60 per cent. You can use the $450,000 equity loan granted by the bank to start a business, or even to invest in another property. The interest rate on equity loans in Singapore is very low and can be as low as 2.2 per cent currently.
Should you pay off or reduce your housing loan?: The Singapore government has projected the inflation rate in 2008 to be about 5 per cent. On the other hand, the interest rate on housing loans is about 2.2 per cent.
Thus, we have a rare scenario of negative interest rates, that is, a person who takes a housing loan is actually ahead of someone who saves money in bank deposits because of the shrinkage of money from inflation.
On the other hand, interest rates on bank deposits have fallen to about 1.5 per cent. With inflation at 5 per cent, it means that a consumer is losing 3.5 per cent a year by putting money in bank deposits.
Instead of paying down your housing loan which charges low interest rates of less than 3 per cent, you can consider investing your cash in a stable investment that is not subject to large price fluctuations and offers higher returns than fixed deposits.
One example is UK-traded endowments, which have a guaranteed cash value and generate annual returns of 6-8 per cent.
How to choose a suitable housing loan?: There are over 113 different housing loan packages available in Singapore at any one time. Each package has its own unique features, with its own pros and cons and different terms and conditions. Consumers might be confused by the wide array of choices. In the last few years, with the emergence of independent mortgage brokers in Singapore, home loan shopping and comparison have been made easier.
Basically, an independent mortgage broker who knows your requirements can help you zoom in on the most attractive home loan packages suitable to your needs. You typically do not have to pay for the service of a mortgage broker as banks pay them a fee.
In more advanced countries such as the US and Australia, people usually apply for home loans through a mortgage broker rather than go to the bank directly. In Singapore, many people are still unaware of the services and benefits of engaging a mortgage broker, but things are likely to change with public education and increasing awareness.
Dennis Ng is a Certified Financial Planner with 15 years of experience in bank lending.
He co-founded an independent mortgage consultancy portal www.HousingLoanSG.com in 2003.
Saturday, March 29, 2008
New Scheme for Single Singaporeans who live with their parents
SINGLE Singaporeans who opt to buy an HDB resale flat in order to live with their parents can now get a housing subsidy of $20,000.
The subsidy aims to encourage children to look after their parents while helping them get a bit further up the property ladder.
It is a variation of an existing programme - the Single Singapore Citizen Scheme, which allows single people aged 35 and above to apply for a $11,000 CPF housing grant to buy a resale flat to live on their own.
The $20,000 subsidy - called the higher-tier Singles Grant - starts on Tuesday and comes with a number of conditions.
Applicants must be aged 35 and above, be first-time HDB buyers and must not earn more than $3,000 a month if they are buying alone.
They must also commit to living with their parents in the flat for at least five years.
Parents have obligations as well. They cannot buy or own another HDB flat or invest in private property within this period.
This means they will have to dispose of any property they own before they can qualify as co-occupiers in the subsidy application.
The $20,000 grant is also subject to other HDB policies such as resale levy liability, but it can be used by singles buying flats under the Design, Build and Sell Scheme.
The subsidy, which was announced in Parliament on March 5, is not a cash grant and can be used only for initial payment on the flat or to reduce the mortgage.
Singles buying resale flats under the joint singles scheme can also apply for the new grant.
'It's not something that will make all singles jump for joy as most want an opportunity to buy a flat to live on their own,' said MP Charles Chong, chairman of the Government Parliamentary Committee for National Development and Environment.
But it will benefit a small group who prefer to live with their parents.
The HDB said about 270 people applied each year, between 2003 and 2007, for a singles grant to buy a resale flat with their parents.
Mr Chong felt the new subsidy does not go far enough.
He said feedback he has received suggests that singles want to be treated the same as married people, including the right to buy a new flat direct from the HDB.
He added: 'If the purpose (of the higher grant) is to encourage children to look after their parents, then the grant should also be given to married children living with their parents.'
Source: The Straits Times
The subsidy aims to encourage children to look after their parents while helping them get a bit further up the property ladder.
It is a variation of an existing programme - the Single Singapore Citizen Scheme, which allows single people aged 35 and above to apply for a $11,000 CPF housing grant to buy a resale flat to live on their own.
The $20,000 subsidy - called the higher-tier Singles Grant - starts on Tuesday and comes with a number of conditions.
Applicants must be aged 35 and above, be first-time HDB buyers and must not earn more than $3,000 a month if they are buying alone.
They must also commit to living with their parents in the flat for at least five years.
Parents have obligations as well. They cannot buy or own another HDB flat or invest in private property within this period.
This means they will have to dispose of any property they own before they can qualify as co-occupiers in the subsidy application.
The $20,000 grant is also subject to other HDB policies such as resale levy liability, but it can be used by singles buying flats under the Design, Build and Sell Scheme.
The subsidy, which was announced in Parliament on March 5, is not a cash grant and can be used only for initial payment on the flat or to reduce the mortgage.
Singles buying resale flats under the joint singles scheme can also apply for the new grant.
'It's not something that will make all singles jump for joy as most want an opportunity to buy a flat to live on their own,' said MP Charles Chong, chairman of the Government Parliamentary Committee for National Development and Environment.
But it will benefit a small group who prefer to live with their parents.
The HDB said about 270 people applied each year, between 2003 and 2007, for a singles grant to buy a resale flat with their parents.
Mr Chong felt the new subsidy does not go far enough.
He said feedback he has received suggests that singles want to be treated the same as married people, including the right to buy a new flat direct from the HDB.
He added: 'If the purpose (of the higher grant) is to encourage children to look after their parents, then the grant should also be given to married children living with their parents.'
Source: The Straits Times
Saturday, December 8, 2007
Loan Term, Loan Repayment Calculation
Hey..Check this out! This site is Cute!
It has a-built in calculator on the following:
Loan Term, Loan Qualifier, Loan Repayment and Loan Amount
All you have to do, is just punch in the numbers!
Don't believe it? Just try...
It has a-built in calculator on the following:
Loan Term, Loan Qualifier, Loan Repayment and Loan Amount
All you have to do, is just punch in the numbers!
Don't believe it? Just try...
Thursday, November 1, 2007
Use of CPF to finance housing loans
Limits to your CPF funds
There are three types of caps when you use your CPF to repay your housing loan: Valuation Limit, Available Housing Withdrawal Limit, Withdrawal Limit.
Valuation Limit (VL)
You hit this ceiling when the CPF savings used for mortgage repayment are equal to the purchase price or valuation of the property, whichever is lower. When that happens, you will need to have half the prevailing Minimum Sum in your Ordinary Account and/or Special Account before you can use any excess CPF savings.
Available Housing Withdrawal Limit
Beyond the VL, the excess CPF savings available to repay loans are known as the Available Housing Withdrawal Limit (AHWL). The AHWL is a moving limit as it goes up when you have new CPF contributions and goes down when the Minimum Sum increases.
Withdrawal Limit
The AHWL, in turn, is subject to the Withdrawal Limit. This is the maximum amount of CPF funds that can be used for a property. No further CPF funds can be used when the limit is reached. If the housing loan is outstanding when the limit is reached, homeowners will have to use cash for future instalments.
There are three types of caps when you use your CPF to repay your housing loan: Valuation Limit, Available Housing Withdrawal Limit, Withdrawal Limit.
Valuation Limit (VL)
You hit this ceiling when the CPF savings used for mortgage repayment are equal to the purchase price or valuation of the property, whichever is lower. When that happens, you will need to have half the prevailing Minimum Sum in your Ordinary Account and/or Special Account before you can use any excess CPF savings.
Available Housing Withdrawal Limit
Beyond the VL, the excess CPF savings available to repay loans are known as the Available Housing Withdrawal Limit (AHWL). The AHWL is a moving limit as it goes up when you have new CPF contributions and goes down when the Minimum Sum increases.
Withdrawal Limit
The AHWL, in turn, is subject to the Withdrawal Limit. This is the maximum amount of CPF funds that can be used for a property. No further CPF funds can be used when the limit is reached. If the housing loan is outstanding when the limit is reached, homeowners will have to use cash for future instalments.
Thursday, August 23, 2007
How to Get the Median, Low and Highest Price of a Private Residential Property?
I have included some very useful links below.. One of them bears special attention.. "How to find the Median, Lowest and Highest Price of a Private Residential Property? This actually links to the URA web-site.
In it, you get to see a maze of a whole lot of other things as well... On the left sits one tiny section on the Property Market. Look for Real Estate Information. Under this, you have:
Property Market Updates, Private Residential Property Transactions with Caveats lodged, Rentals of Private Residential Developments and as well as details about the Private Residential Projects in the Pipeline.
And there are some terms you need to know in there:
a) Price Index of Private Homes
This shows the overall price movements of all types of Private Homes. En-bloc Sales are not included. This is based on the caveats that has been lodged and captures the purchase price not counting stamp duties and commissions.
b) Price Index of Non-landed Homes by regions and Completion Status
This shows the price movements of homes in different areas. The Core Central Region includes District 9, 10, 11, Downtown Core and Sentosa. The Central Region comprises of 22 areas including Orchard, Newton, River Valley, Bishan, Bukit Timah and Toa Payoh.
c) Residential Rental Index
This shows the Rental Price Movements. Data is collected per quarter. Currently, all indexes for Detached, Semi-Detached, Terrace and the Non-Landed Properties show an above 100 index.
d) Number of Sub-Sales Done
Sub-Sales is a gauge for speculative activity.
In 1996, Sub-Sales formed 28% of all private home deals. That prompted The Government to come in with anti-speculative measures.
Currently, Sub-Sales are 9.7%
In the Previous Quarter: Subsales are 7.4%
Meantime..have fun!
In it, you get to see a maze of a whole lot of other things as well... On the left sits one tiny section on the Property Market. Look for Real Estate Information. Under this, you have:
Property Market Updates, Private Residential Property Transactions with Caveats lodged, Rentals of Private Residential Developments and as well as details about the Private Residential Projects in the Pipeline.
And there are some terms you need to know in there:
a) Price Index of Private Homes
This shows the overall price movements of all types of Private Homes. En-bloc Sales are not included. This is based on the caveats that has been lodged and captures the purchase price not counting stamp duties and commissions.
b) Price Index of Non-landed Homes by regions and Completion Status
This shows the price movements of homes in different areas. The Core Central Region includes District 9, 10, 11, Downtown Core and Sentosa. The Central Region comprises of 22 areas including Orchard, Newton, River Valley, Bishan, Bukit Timah and Toa Payoh.
c) Residential Rental Index
This shows the Rental Price Movements. Data is collected per quarter. Currently, all indexes for Detached, Semi-Detached, Terrace and the Non-Landed Properties show an above 100 index.
d) Number of Sub-Sales Done
Sub-Sales is a gauge for speculative activity.
In 1996, Sub-Sales formed 28% of all private home deals. That prompted The Government to come in with anti-speculative measures.
Currently, Sub-Sales are 9.7%
In the Previous Quarter: Subsales are 7.4%
Meantime..have fun!
Friday, August 10, 2007
HDB PURCHASE PART 3
There are 4 types of Housing Grants (HDB) at the time of writing:
1. Family Grant
2. Additional CPF Housing Grant (AHG)
3. Top Up Grant
4. Singles Grant
On the Family Grant, this grant is a financial assistance by the Government to 1st-timer flat buyers (who have not enjoyed any housing subsidies).. They can apply for CPF Housing Grant when they buy resale flat or a flat under the Design, Build and Sell Scheme.
Current CPF Housing Grant is $30,000. Families who buy flats to live near their parents can apply for a higher grant of $40,000. Note the grant is given to Singapore Citizen who is not a bankrupt and is not below 21 years of age.
A first timer is defined as one who is not an owner of a subsidised flat (bought directly from HDB) or a resale flat bought with CPF grant, or one who has never sold a subsidised flat. A first timer citizen with a spouse who is a second timer can apply for half the grant amount, if the family meets the eligibility conditions.
The gross monthly household income must not exceed $8000. If the family is extended, it must not be above $12,000.
First timer household with an average monthly income not exceeding $3000 in the past 2 years may also apply for the Additional CPF Housing Grant (AHG) .
The applicants cannot be owners of any private residential property (HUDC and/or Executive Condo.), house, land (local or overseas) or have disposed of such within 30 months before the applications. (i.e within 2 and a half years)
One can purchase either a 2 room, 3 room , 4 room , 5 room Executive Flat in the open market. A grant can be requested if the purchase is for Conversion Schemed adjoining 3 room or smaller flat.
On the Additional CPF Housing Grant:
For people having Average Monthly Income over the last 2 years of
$1500 (or less): Additional CPF :$20,000
$1501-$2000: Additional CPF :$15,000
$2001-$2500: Additional CPF :$10,000
$2501-$3000: Additional CPF :$5000
To qualify:
Applicants must have at least one of the flat buyers who is working continously for 2 years, have an average household income of $3000 or less in that same period.
Like the existing CPF Housing Grant, the AHG can only be used as capital payment for teh purchase of the flat. It cannot be used to offset the cash payment where the declared resale price exceeds the market valuation. Neither can it be used to pay the monthly mortgage loan instalments.
On the Top-Up Grant
Again like before: applicants must have an average household income of $3000 or less in the past 2 years.
Use of Grant:
One can apply to top-up the Singles Grant to Family Grant if you wish to retain it as your matrimonial home. The Top-Up Grant shall be first used for repayment of mortgage arrears, if any. If you have obtained a loan from a bank/ financial institution, you may use the Top-Up for payment towards mortgage arrears, lump sum payments or monthly instalments.
The Top-Up can be used to pay towards the purchase of the resale flat or reduce the mortgage loans. Hence if one does not have enough CPF savings, the grant can be used to pay for the initial payment.
If you are buying the resale flat with a bank loan, the Top-Up can be treated as part of your CPF fund. It can be used to pay for the CPF portion of the initial payment towards the purchase of the resale flat.
The initial payment in CPF funds and cash for buying resale with bank loans:
5% Cash, 5 % CPF (Inclusive of Housing Grants), 90% Bank Loan
Note:
The cash payment is paid over and above that of the cash-over-valuation. (Case where the transacted price is above the market valuation) .Resale flat buyers must pay the cash-over-valuation in cash.
The Top Up Grant is the difference between the Prevailing Family Grant and the Singles Grant.
(You must be within 2 km of your parents' flat)
Example :
2. Additional CPF Housing Grant (AHG)
3. Top Up Grant
4. Singles Grant
On the Family Grant, this grant is a financial assistance by the Government to 1st-timer flat buyers (who have not enjoyed any housing subsidies).. They can apply for CPF Housing Grant when they buy resale flat or a flat under the Design, Build and Sell Scheme.
Current CPF Housing Grant is $30,000. Families who buy flats to live near their parents can apply for a higher grant of $40,000. Note the grant is given to Singapore Citizen who is not a bankrupt and is not below 21 years of age.
A first timer is defined as one who is not an owner of a subsidised flat (bought directly from HDB) or a resale flat bought with CPF grant, or one who has never sold a subsidised flat. A first timer citizen with a spouse who is a second timer can apply for half the grant amount, if the family meets the eligibility conditions.
The gross monthly household income must not exceed $8000. If the family is extended, it must not be above $12,000.
First timer household with an average monthly income not exceeding $3000 in the past 2 years may also apply for the Additional CPF Housing Grant (AHG) .
The applicants cannot be owners of any private residential property (HUDC and/or Executive Condo.), house, land (local or overseas) or have disposed of such within 30 months before the applications. (i.e within 2 and a half years)
One can purchase either a 2 room, 3 room , 4 room , 5 room Executive Flat in the open market. A grant can be requested if the purchase is for Conversion Schemed adjoining 3 room or smaller flat.
On the Additional CPF Housing Grant:
For people having Average Monthly Income over the last 2 years of
$1500 (or less): Additional CPF :$20,000
$1501-$2000: Additional CPF :$15,000
$2001-$2500: Additional CPF :$10,000
$2501-$3000: Additional CPF :$5000
To qualify:
Applicants must have at least one of the flat buyers who is working continously for 2 years, have an average household income of $3000 or less in that same period.
Like the existing CPF Housing Grant, the AHG can only be used as capital payment for teh purchase of the flat. It cannot be used to offset the cash payment where the declared resale price exceeds the market valuation. Neither can it be used to pay the monthly mortgage loan instalments.
On the Top-Up Grant
Again like before: applicants must have an average household income of $3000 or less in the past 2 years.
Use of Grant:
One can apply to top-up the Singles Grant to Family Grant if you wish to retain it as your matrimonial home. The Top-Up Grant shall be first used for repayment of mortgage arrears, if any. If you have obtained a loan from a bank/ financial institution, you may use the Top-Up for payment towards mortgage arrears, lump sum payments or monthly instalments.
The Top-Up can be used to pay towards the purchase of the resale flat or reduce the mortgage loans. Hence if one does not have enough CPF savings, the grant can be used to pay for the initial payment.
If you are buying the resale flat with a bank loan, the Top-Up can be treated as part of your CPF fund. It can be used to pay for the CPF portion of the initial payment towards the purchase of the resale flat.
The initial payment in CPF funds and cash for buying resale with bank loans:
5% Cash, 5 % CPF (Inclusive of Housing Grants), 90% Bank Loan
Note:
The cash payment is paid over and above that of the cash-over-valuation. (Case where the transacted price is above the market valuation) .Resale flat buyers must pay the cash-over-valuation in cash.
The Top Up Grant is the difference between the Prevailing Family Grant and the Singles Grant.
(You must be within 2 km of your parents' flat)
Example :
Married Couple: Spouse A and B requesting the Top-Up Grant wherein A has already received a Singles Grant of $11,000 previously and the prevailing Basic Family Grant of $30,000.
Both are Singapore Citizens and are listed as owners or applicants:
Previous Singles Grant Amount $11,000
Basic Family Grant $30,000
Top Up $4,000
Spouse B $15,000
Total : $19,000
Refer to Site for more examples.
On Singles Grant:
One needs to be a Singapore Citizen and at least 35 of age. You should be at least 21 if you are buying a resale flat under the Non-Citizen Spouse Scheme. Gross Monthly Household income not more than $3000 for Single Singapore Citizen Scheme and not more than $8000 for other Schemes.
Amount of Grant:
Singles Grant of $11,000, Joint Singles Grant of $22,000
One has to occupy the flat for 5 years before being able to sell in the open market or invest in private residential property. The idea is to save up first, while living in a flat and then using the extra cash to invest in properties later on. Whatever the case, you have at your disposal: $10,000 to $40,000 already if you take up any of the grants mentioned earlier.
Example: A typical flat nowadays costs around $250, 000. If a family grant of $30,000 is taken, and assuming 2 working adults (Spouse A and Spouse B), this should work out to:
Cost of flat in reasonable good area: $250,000.
Family Grant: $30,000
Left: $220,000
Assuming 90% bank loan: loan of $198000 over 30 years ,
Hence 5% CPF and 5 % cash works out to be $11000 CPF and $11000 CASH. Remember that this is to be divided by 2 working adults. Hence:
$5500 CPF and $5500 Cash needed to be forked out equally between husbands and wife.
This should be pretty affordable for anyone who has been working for quite some time! One can choose to rent out a room or so to help with the finances. Alternatively to confirm, click on this to check with the on-line calculator on the monthly instalments.
Tuesday, August 7, 2007
HDB PURCHASE PART 2
If you are using CPF :
In addition to the CPF housing withdrawal limits which define the amount of CPF that can be used for housing, members should also be aware of factors like the CPF Minimum Sum requirements when they reach 55 years old, the effect of changes in housing loan interest rates, reductions in the amount of contributions to the Ordinary Account as they get older, etc. Please click here for the list of factors. Otherwise, a brief discussion is given below:
CPF contribution rates and allocations. The rates are lower for members in older age groups, and the percentage of contributions going to the Ordinary Account is also reduced. Thus, as homeowners get older, they may have to use more cash for instalments. Remember also that contribution rates may change from time to time.
CPF salary ceiling.
Both employer and employee do not have to contribute CPF on salary amounts which exceed the ceiling ($5,000 in 2005; $4,500 in 2006). This means more take-home pay, but employees have to remember that they won’t be able to rely on having more CPF savings for their housing.
Changes to CPF contribution levels.
Remember that one's level of contribution may change over the years. It could increase (eg. salary rise); decrease (eg. pay cut); or even stop (eg. unemployment). A useful rule-of-thumb is that we should have emergency savings of at least six times our monthly salary to cater for unexpected events, if possible.
Other commitments. Don’t forget that you may also need your Ordinary Account savings for other purposes – commitments under CPF Investment Scheme; Home Protection Scheme premiums; Dependants’ Protection Scheme premiums; usage under CPF Education Scheme.
Undischarged bankrupt: HDB flat owners who are undischarged bankrupts can continue to use CPF to pay their housing loan instalments. From 15 June 2005, private property owners and owners of privatised HUDC flats who are bankrupts may continue to use their CPF to service their housing loans taken to buy the property, if the CPF charge on the property is created before their bankruptcy.
Factors affecting only homeowners below 55 years old
Members below age 55 can transfer savings from the Odinary Account to the Special Account, to earn more interest. However, such transfers are irreversible, and homeowners with outstanding home loans should think carefully before making such transfers.
Factors affecting only homeowners aged 55 and above
Lumpsum withdrawal at 55.
You can withdraw your CPF savings when you turn 55 after you set aside your CPF Minimum Sum. Before you withdraw your CPF savings, however, do consider how you intend to continue paying any outstanding loan instalments. This is important as employees above 55 will have lower CPF contribution rates.
CPF Minimum Sum.
The CPF Minimum Sum is being raised gradually to reach $120,000 (in 2003 dollars) in 2013 (please see Table A). The sum is meant to give members a basic income during retirement, and thus only amounts in excess of the cash component can be used for housing. It has to be set aside at 55 even if members postpone or do not make any withdrawal of CPF savings at 55. Members can set aside the amount fully in cash or pledge their property for up to 50% of the Minimum Sum applicable to them.
Medisave matters: Although these do not have a significant impact on homeowners, it would be useful for members to note that their CPF withdrawal at 55 can be affected by the Medisave Minimum Sum or Medisave Required Amount.
CPF Minimum Sum shortfall. If members have a shortfall for their CPF Minimum Sum upon reaching 55, they will not have to make-up the shortfall immediately. However, they should note that the shortfall could affect the use of CPF for housing if the property’s 100% Valuation Limit has been reached.
While they may continue to use CPF if they have the Available Housing Withdrawal Limit, the AHWL would be computed based on the available Ordinary Account balance less any shortfall in member’s Minimum Sum cash component.
Lowering of Minimum Lease Period to 30 years:
Minimum Lease Period (MLP) refers to the length of lease remaining below which CPF cannot be used to purchase private residential properties
CPF can now be used to buy residential properties with remaining leases of less than 60 years but at least 30 years. This is subject to the following conditions:
i. The remaining lease must cover the member at least up to the age of 80 years; and
ii. Properties with remaining leases less than 60 years but at least 30 years will have lower CPF Withdrawal Limits based on the residual value of the property at the member’s CPF withdrawal age of 55 years old (see Annex A).
Lowering the MLP thus gives members this flexibility so that more funds can be set aside to meet their retirement expenditure. In this way, both their housing and retirement needs are better met. The lower MLP will apply to : Repayment of outstanding housing loans for properties that had been purchased without using CPF before this policy change (provided that members satisfy the age-based criteria).
In cases of joint purchases, the age of youngest owner using CPF will be used to determine the MLP and Withdrawal Limit. This is to ensure that the younger member would have a home till at least age 80 and have sufficient CPF savings for retirement should the property be sold.
2. Use of CPF for Non-related Singles to Jointly Purchase Homes
All non-related singles (unmarried, divorced or widowed) will be allowed to use CPF to jointly purchase their only residential properties. There is no age restriction. The new policy will apply to applications received for
i. New purchases on or after the effective date; and
ii. Repayment of outstanding housing loans for properties purchased without the use of CPF before this policy change.
At the time of application, the singles who are using CPF for the property purchase must not be using CPF for any other existing properties.
3. Simplification of Available Housing Withdrawal Limit (AHWL)
Previous Policy
AHWL was set at the lower of:
i. 80% of gross CPF savings in Ordinary Account and Special Account in excess of the prevailing Minimum Sum or
ii. the available Ordinary Account balance after setting aside the Minimum Sum cash component;
for members below age 55.
For CPF members aged below 55 years, the AHWL will be simplified to:
the available Ordinary Account balance after setting aside the Minimum Sum cash component (i.e. criterion (i) above has been done away with).
For CPF members aged 55 years and above, the AHWL will be:
Available Ordinary Account balance less the Minimum Sum cash component shortfall.
The new policy will apply to all members subjected to the AHWL i.e. new applicants as well as those currently under the CPF property schemes.
4. Restriction on Use of CPF to purchase Multiple Properties
Previous Policy
The CPF withdrawal rules applicable to second and subsequent properties are the same as those for the first property. Members are allowed to use at least 100% of the Valuation Limit for each property without setting aside any cash in their CPF accounts.
Change
From 1 July 2006, members can only use their CPF savings for the purchase of their second and subsequent properties provided they are able to set aside the Minimum Sum cash component. The use of CPF for the second and subsequent properties would be limited to the net amount of Ordinary Account savings in excess of the Minimum Sum cash component.
Withdrawals for the second and subsequent properties will also be subject to a Withdrawal Limit of 100% of the Valuation Limit for properties with at least 60 years of lease, and the applicable
Withdrawal Limit for properties with more than 30 years but less than 60 years of lease.
This policy is applicable to members who already own a property (HDB flat or private property) bought with their CPF savings before 1 July 2006 and wish to buy another property with CPF from 1 July 2006.
Members who own more than 1 property bought with CPF savings before 1 July 2006 will not be affected by the policy change unless they subsequently buy another property using their CPF savings.
A grace period will be granted to members who have bought the second or subsequent property with the intention of selling the existing property so as to meet the rules. The grace period for the sale of the existing property will be:
i. For completed properties – 6 months from the completion of purchase of the second property
ii. For uncompleted properties – Up to Temporary Occupation Permit (TOP) + 6 months
Once the grace period is up, they should either own only one property, or satisfy the MS cash requirement if they own more than one property. If the MS cash requirement is not met, CPFB will stop CPF withdrawals for the new property.
5. Phasing Out of Non-residential Properties Scheme (NRPS)
Previous Rule
CPF can be used to buy non-residential properties up to the purchase price or 70% of the value of the property, whichever is lower. These include office premises, shop units, factories and warehouses.
Change
CPF members can no longer use CPF to buy non-residential properties.
Rationale for Change
NRPS was intended to help members enhance the return on their CPF savings by investing in property. As CPF members are now allowed to invest in property funds under the CPF Investment Scheme, NRPS is less relevant. Property funds offer diversification, are more liquid and do not require large capital commitment. In addition, the take-up rate of NRPS has been low and the number of new NRPS applicants has also been generally declining.
Effective Date
1 July 2006 Any NRPS applications received on or after 1 July 2006 will not be approved. Members who are using CPF to service their non-residential properties before 1 July 2006 will not be affected by the policy change.
Other Implementation Details
From 1 July 2006, CPFB will allow CPF to be used only for the residential component of shop-houses under the Residential Properties Scheme. Hence, approval on the use of CPF will only be given for shop-houses with leases/titles which can be subdivided into the residential and commercial components. Members will need to subdivide the lease/title before they can apply to use CPF for the residential component.
6. Transfer of Medisave Account Overflow to Special Account/Retirement Account Instead of the Ordinary Account
Previous Policy
Contributions into Medisave Account (MA) in excess of the Medisave Contribution Ceiling (termed “MA overflows”) are transferred into the Ordinary Account.
Change
For members aged below 55 years, MA overflows will be transferred to their Special Account (SA). Once the SA balance (inclusive of amounts withdrawn under CPFIS-SA) has reached the prevailing Minimum Sum (MS), excess MA overflows would then go into their Ordinary Account (OA).
For members aged 55 years and above, MA overflows will be transferred to their Retirement Account (RA) to top-up any MS shortfall. Once the RA has been topped up to cover any MS shortfall, MA overflows would go into their OA.
Rationale for Change
This change will improve retirement adequacy of CPF members as they will enjoy a higher interest on their MA overflows (interest rate for the SA and RA is higher than for the OA).
As savings in the SA and RA cannot be used for property purchases, some members who currently rely on their MA overflows to finance their mortgages in properties may be affected.
CPF members who are using MA overflows to service housing mortgages may appeal to the Board to continue to use the overflowed amount to SA to service their loans, if their OA is depleted. They can tap on their SA savings to the extent that their mortgage payments are affected by the policy change.
BANK LOAN
Since 1 January 2003, flat buyers who are not eligible for an HDB loan will have to take a loan from bank/financial institution that is licensed by the Monetary Authority of Singapore to provide housing loans.
HDB flat purchasers / transferees are advised to check with the banks / financial institution on the granting of such housing loans. For those taking bank loans, a Letter of Offer must be obtained from the banks / financial institutions before you exercise the Option to Purchase for the HDB flat.
HDB LOAN
Eligibility Conditions for HDB Concessionary loan
HDB provides housing loans at concessionary interest rate to eligible flat buyers, subject to HDB's credit assessment and prevailing mortgage loan criteria.Since 1 January 2003, flat buyers who are not eligible for an HDB loan will have to take a loan from a bank/financial institution that is licensed by the Monetary Authority of Singapore to provide housing loans. Flat buyers can apply for an HDB loan if you and / or your essential occupiers (if any):
(a) have at least one buyer who is a Singapore citizen;
(b) have a monthly household income not exceeding $8,000;
(c) have not previously taken two or more HDB concessionary interest rate loans;
(d) have previously taken one HDB concessionary interest rate loan and one housing subsidy and buying a bigger flat type than your current flat or the flat last owned (if you currently do not own an HDB flat);
(e) have previously taken one HDB concessionary interest rate loan and one housing subsidy and the residential property last disposed off is not a private property;
(f) do not own any private residential property (including HUDC flat / Executive Condominium) in Singapore or overseas;
(g) do not own more than one market / hawker stalls or commercial / industrial property in Singapore or overseas;
(h) own one market / hawker stall or commercial / industrial property and operate the business yourself;
(i) are buying a 5 room or smaller resale flat under the Single Singapore Citizen (SSC) Scheme with a gross monthly income not exceeding $3,000.
Since 1 Jan 2003, HDB no longer grant market rate loans. Flats buyers who are not eligible for HDB’s housing loans can obtain market rate loans from any bank that is licensed to provide housing loans. They will benefit from more choices, and will be able to take advantage of the many competitive housing loan packages offered. Existing HDB market rate mortgagors can continue with their existing mortgages provided by HDB.
However, if they wish to refinance their loans with the banks, they may do so with HDB's prior consent. HDB continues to provide concessionary interest rate mortgage loans for Singapore Citizen first-time flat buyers and second-time buyers who are upgrading from smaller flats.
With bank origination, buyers taking bank loans need to have their loan applications supported by valuations that are performed by a private valuer assigned by HDB. From 1 Jan 2007, they are to obtain a Letter of Offer from the bank before they exercise the Option To Purchase.
Requirement on Use of HDB Assigned Valuers
From 1 Apr 2005, all resale flat buyers who are taking bank loans and using their CPF savings in the flat purchase or servicing of loan instalments, must have a valid valuation report from a private valuer assigned by HDB.
The valuation by the HDB-assigned valuer will be used to determine the financing limits i.e. quantum of CPF withdrawals, housing loans and the cash payment. This will also apply to those who are taking bank loans and using their CPF savings for the transfer of ownership of an existing flat at market valuation to them. From 19 July 2005, the housing loan ceiling has been raised from 80% to 90% of the purchase price or market valuation of the flat, whichever is lower.
The "cut-off" for the revised housing loan ceiling for resale transaction is based on date of resale applications received by HDB.Buyers should have a valid valuation report before they enter into an Option to Purchase with the sellers.
This is to help them to calculate the amounts of:
i) cash-over-valuation,
ii) cash payment,
iii) CPF money that can be used, and
iv) bank loan that they can take.
This will enable buyers to work out the financial plan before they submit their application to buy the resale flat. It will also facilitate the processing of their bank loan applications.
In the resale application submitted to HDB for processing, buyers will need to provide the valuation amount from a valid valuation report.The new rule is implemented to curb any illegal cashback practices. All parties must declare to HDB the flat's true resale price, and not enter into any agreement/arrangement that would inflate or understate the price.
As a further measure to curb the cashback practice, CPF Board has also announced on 21 February 2005 that it will conduct independent valuation on any suspected over-valued flats. This valuation will be used to determine the amount of CPF withdrawals and housing loan.
Procedures for Obtaining an HDB Valuation Report
Anyone can submit a request for valuation report if they have obtained prior consent from the flat owner. The requesters will have to pay the valuation and administrative fees when they submit the request.
Valuation requests submitted to HDB will be randomly assigned to the private valuers on its panel.
Submission of a valuation request
You can submit a valuation request either electronically or manually. For those who do not engage the services of a housing agent in the resale transaction, they can submit an online valuation request via e-Resale System.
For those who engaged the services of a housing agent from an agency accredited under the Singapore Accredited Estate Agencies (SAEA) scheme which subscribes to the HDB-ResaleNet System, the agent can submit the valuation request on their behalf via the exclusive HDB-ResaleNet System.For manual submission, the Valuation request form can be obtained from HDB Resale Office or any Branch Office.
Fees payable
The requestor has to pay the following fees:
Flat Type Valuation & Administrative Fee for Valuation Report
by post/hand via e-Resale/HDB-ResaleNet System
1 & 2-room
$127 Valuation Fee : $100 + $7 (*GST)Admin Fee : $20
$117 Valuation Fee : $100 + $7 (*GST)Admin Fee : $10
3-room & larger
$180.50 Valuation Fee : $150 + $10.50 (*GST)Admin Fee : $20
$170.50 Valuation Fee : $150 + $10.50 (*GST)Admin Fee : $10
Note:
i. *GST is 7%.
ii. Payment can be made in cash/cashier's order/money order.
iii.Payment can only be made by credit card/cash card for request submitted via e-Resale. iv.Payment for valuation requests submitted by agents from agencies accredited under the Singapore Accredited Estate Agencies (SAEA) scheme via HDB-ResaleNet System must be by GIRO.
The HDB valuation report is valid for 3 months from the date of report.
A valid valuation report must be submitted together with the resale/transfer application to HDB.
Advice to Buyers Taking Bank Loans
Under the new requirement, the minimum cash payment, amount of CPF withdrawal and housing loan from banks will be calculated based on the resale transacted price or the valuation by HDB-assigned valuer, whichever is lower.If the resale transacted price is higher than the valuation by HDB-assigned valuer, buyers will have to pay a cash-over-valuation.
This cash-outlay is in addition to the cash payment which is currently at 5% based on the lower of the purchase price or market value of the flat. It is important that buyers have a valid valuation report ready even before they enter into an Option to Purchase (contract) with the seller.
It will also be to the interest of the buyers to have the HDB valuation report ready at the time of applying for a housing loan from the banks. This will facilitate the processing of the loan application by the banks.
Similarly, the CPF withdrawal limit currently at 138% of the Valuation Limit (to be reduced to 120% by 1 Jan 2008) will be based on the valuation by an HDB-assigned valuer.
This withdrawal limit on the use of CPF savings by the buyers to service the mortgage loans is applicable to buyers taking bank loans. Once the CPF withdrawal limit is reached, they will have to pay their monthly instalments in cash. As home purchase is a long-term commitment, buyers should exercise financial prudence and also take into consideration the Valuation Limit requirement when buying a resale flat.
Limits on Use of CPF
Buyers taking bank loan can use the savings in their CPF Ordinary Account to service their mortgage loan. However, under the CPF Board's requirements, they are allowed to withdraw only up to a certain limit.
Since 1 January 2003, the CPF withdrawal limit for a housing loan obtained from a bank or financial institution is set at lower of 150% of the Valuation Limit or the Available Housing Withdrawal Limit (AHWL).
The 150% Valuation Limit will be reduced to 120% (2008 Jan).
Note: The Valuation Limit is the lower of the purchase price or valuation of the property at the time of purchase. Important Note:
Once the CPF withdrawal limit is reached, mortgagors will have to pay their monthly instalments in cash. The above change applies from 1 January 2003 to HDB flats bought with mortgage loans from banks/ financial institutions.
To find out how much you can withdraw from your CPF for housing, log on to CPF Board's Housing Withdrawal Calculator that can be found at the CPF Board's website @ www.cpf.gov.sg
For enquiries, please call CPF Call Centre @ 1800-2271188 (code 2) or e-mail to PHS bankloan@cpf.gov.sg
Cash Payment
HDB flat buyers who are getting a mortgage loan from banks have to pay a cash payment with effect from 1 Jan 2004. The cash payment will be eventually aligned with that of private property purchase, that is, 5% based on the lower of the purchase price or market value of the flat.
Note:
(i)The cash payment is computed based on purchase price or current market valuation of the flat, whichever is lower.
(ii)For purchase of resale flats, the cash payment is in addition to the Cash-Over-Valuation (COV) for cases where the transacted resale price is above market valuation. The COV must be paid in cash
Priority of Payment
When an HDB flat financed with a bank loan is sold, the sales proceeds will be applied in the following manner:
1st – to discharge the outstanding mortgage loan with the bank.
2nd – to refund the CPF savings withdrawn for the purchase of the property.
3rd – to pay the interest on the mortgage loan (from the date of default in payment) and interest on CPF monies withdrawn.
The housing loan to be granted is subject to credit assessment and full usage of CPF savings in the Ordinary Account.
The housing loan limit is as follow:
HOUSING LOAN LIMIT
Before 19 July 05 :up to 80%
On or after 19 July 05 :up to 90%
To go to Part 3 of HDB Purchase
In addition to the CPF housing withdrawal limits which define the amount of CPF that can be used for housing, members should also be aware of factors like the CPF Minimum Sum requirements when they reach 55 years old, the effect of changes in housing loan interest rates, reductions in the amount of contributions to the Ordinary Account as they get older, etc. Please click here for the list of factors. Otherwise, a brief discussion is given below:
CPF contribution rates and allocations. The rates are lower for members in older age groups, and the percentage of contributions going to the Ordinary Account is also reduced. Thus, as homeowners get older, they may have to use more cash for instalments. Remember also that contribution rates may change from time to time.
CPF salary ceiling.
Both employer and employee do not have to contribute CPF on salary amounts which exceed the ceiling ($5,000 in 2005; $4,500 in 2006). This means more take-home pay, but employees have to remember that they won’t be able to rely on having more CPF savings for their housing.
Changes to CPF contribution levels.
Remember that one's level of contribution may change over the years. It could increase (eg. salary rise); decrease (eg. pay cut); or even stop (eg. unemployment). A useful rule-of-thumb is that we should have emergency savings of at least six times our monthly salary to cater for unexpected events, if possible.
Other commitments. Don’t forget that you may also need your Ordinary Account savings for other purposes – commitments under CPF Investment Scheme; Home Protection Scheme premiums; Dependants’ Protection Scheme premiums; usage under CPF Education Scheme.
Undischarged bankrupt: HDB flat owners who are undischarged bankrupts can continue to use CPF to pay their housing loan instalments. From 15 June 2005, private property owners and owners of privatised HUDC flats who are bankrupts may continue to use their CPF to service their housing loans taken to buy the property, if the CPF charge on the property is created before their bankruptcy.
Factors affecting only homeowners below 55 years old
Members below age 55 can transfer savings from the Odinary Account to the Special Account, to earn more interest. However, such transfers are irreversible, and homeowners with outstanding home loans should think carefully before making such transfers.
Factors affecting only homeowners aged 55 and above
Lumpsum withdrawal at 55.
You can withdraw your CPF savings when you turn 55 after you set aside your CPF Minimum Sum. Before you withdraw your CPF savings, however, do consider how you intend to continue paying any outstanding loan instalments. This is important as employees above 55 will have lower CPF contribution rates.
CPF Minimum Sum.
The CPF Minimum Sum is being raised gradually to reach $120,000 (in 2003 dollars) in 2013 (please see Table A). The sum is meant to give members a basic income during retirement, and thus only amounts in excess of the cash component can be used for housing. It has to be set aside at 55 even if members postpone or do not make any withdrawal of CPF savings at 55. Members can set aside the amount fully in cash or pledge their property for up to 50% of the Minimum Sum applicable to them.
Medisave matters: Although these do not have a significant impact on homeowners, it would be useful for members to note that their CPF withdrawal at 55 can be affected by the Medisave Minimum Sum or Medisave Required Amount.
CPF Minimum Sum shortfall. If members have a shortfall for their CPF Minimum Sum upon reaching 55, they will not have to make-up the shortfall immediately. However, they should note that the shortfall could affect the use of CPF for housing if the property’s 100% Valuation Limit has been reached.
While they may continue to use CPF if they have the Available Housing Withdrawal Limit, the AHWL would be computed based on the available Ordinary Account balance less any shortfall in member’s Minimum Sum cash component.
Lowering of Minimum Lease Period to 30 years:
Minimum Lease Period (MLP) refers to the length of lease remaining below which CPF cannot be used to purchase private residential properties
CPF can now be used to buy residential properties with remaining leases of less than 60 years but at least 30 years. This is subject to the following conditions:
i. The remaining lease must cover the member at least up to the age of 80 years; and
ii. Properties with remaining leases less than 60 years but at least 30 years will have lower CPF Withdrawal Limits based on the residual value of the property at the member’s CPF withdrawal age of 55 years old (see Annex A).
Lowering the MLP thus gives members this flexibility so that more funds can be set aside to meet their retirement expenditure. In this way, both their housing and retirement needs are better met. The lower MLP will apply to : Repayment of outstanding housing loans for properties that had been purchased without using CPF before this policy change (provided that members satisfy the age-based criteria).
In cases of joint purchases, the age of youngest owner using CPF will be used to determine the MLP and Withdrawal Limit. This is to ensure that the younger member would have a home till at least age 80 and have sufficient CPF savings for retirement should the property be sold.
2. Use of CPF for Non-related Singles to Jointly Purchase Homes
All non-related singles (unmarried, divorced or widowed) will be allowed to use CPF to jointly purchase their only residential properties. There is no age restriction. The new policy will apply to applications received for
i. New purchases on or after the effective date; and
ii. Repayment of outstanding housing loans for properties purchased without the use of CPF before this policy change.
At the time of application, the singles who are using CPF for the property purchase must not be using CPF for any other existing properties.
3. Simplification of Available Housing Withdrawal Limit (AHWL)
Previous Policy
AHWL was set at the lower of:
i. 80% of gross CPF savings in Ordinary Account and Special Account in excess of the prevailing Minimum Sum or
ii. the available Ordinary Account balance after setting aside the Minimum Sum cash component;
for members below age 55.
For CPF members aged below 55 years, the AHWL will be simplified to:
the available Ordinary Account balance after setting aside the Minimum Sum cash component (i.e. criterion (i) above has been done away with).
For CPF members aged 55 years and above, the AHWL will be:
Available Ordinary Account balance less the Minimum Sum cash component shortfall.
The new policy will apply to all members subjected to the AHWL i.e. new applicants as well as those currently under the CPF property schemes.
4. Restriction on Use of CPF to purchase Multiple Properties
Previous Policy
The CPF withdrawal rules applicable to second and subsequent properties are the same as those for the first property. Members are allowed to use at least 100% of the Valuation Limit for each property without setting aside any cash in their CPF accounts.
Change
From 1 July 2006, members can only use their CPF savings for the purchase of their second and subsequent properties provided they are able to set aside the Minimum Sum cash component. The use of CPF for the second and subsequent properties would be limited to the net amount of Ordinary Account savings in excess of the Minimum Sum cash component.
Withdrawals for the second and subsequent properties will also be subject to a Withdrawal Limit of 100% of the Valuation Limit for properties with at least 60 years of lease, and the applicable
Withdrawal Limit for properties with more than 30 years but less than 60 years of lease.
This policy is applicable to members who already own a property (HDB flat or private property) bought with their CPF savings before 1 July 2006 and wish to buy another property with CPF from 1 July 2006.
Members who own more than 1 property bought with CPF savings before 1 July 2006 will not be affected by the policy change unless they subsequently buy another property using their CPF savings.
A grace period will be granted to members who have bought the second or subsequent property with the intention of selling the existing property so as to meet the rules. The grace period for the sale of the existing property will be:
i. For completed properties – 6 months from the completion of purchase of the second property
ii. For uncompleted properties – Up to Temporary Occupation Permit (TOP) + 6 months
Once the grace period is up, they should either own only one property, or satisfy the MS cash requirement if they own more than one property. If the MS cash requirement is not met, CPFB will stop CPF withdrawals for the new property.
5. Phasing Out of Non-residential Properties Scheme (NRPS)
Previous Rule
CPF can be used to buy non-residential properties up to the purchase price or 70% of the value of the property, whichever is lower. These include office premises, shop units, factories and warehouses.
Change
CPF members can no longer use CPF to buy non-residential properties.
Rationale for Change
NRPS was intended to help members enhance the return on their CPF savings by investing in property. As CPF members are now allowed to invest in property funds under the CPF Investment Scheme, NRPS is less relevant. Property funds offer diversification, are more liquid and do not require large capital commitment. In addition, the take-up rate of NRPS has been low and the number of new NRPS applicants has also been generally declining.
Effective Date
1 July 2006 Any NRPS applications received on or after 1 July 2006 will not be approved. Members who are using CPF to service their non-residential properties before 1 July 2006 will not be affected by the policy change.
Other Implementation Details
From 1 July 2006, CPFB will allow CPF to be used only for the residential component of shop-houses under the Residential Properties Scheme. Hence, approval on the use of CPF will only be given for shop-houses with leases/titles which can be subdivided into the residential and commercial components. Members will need to subdivide the lease/title before they can apply to use CPF for the residential component.
6. Transfer of Medisave Account Overflow to Special Account/Retirement Account Instead of the Ordinary Account
Previous Policy
Contributions into Medisave Account (MA) in excess of the Medisave Contribution Ceiling (termed “MA overflows”) are transferred into the Ordinary Account.
Change
For members aged below 55 years, MA overflows will be transferred to their Special Account (SA). Once the SA balance (inclusive of amounts withdrawn under CPFIS-SA) has reached the prevailing Minimum Sum (MS), excess MA overflows would then go into their Ordinary Account (OA).
For members aged 55 years and above, MA overflows will be transferred to their Retirement Account (RA) to top-up any MS shortfall. Once the RA has been topped up to cover any MS shortfall, MA overflows would go into their OA.
Rationale for Change
This change will improve retirement adequacy of CPF members as they will enjoy a higher interest on their MA overflows (interest rate for the SA and RA is higher than for the OA).
As savings in the SA and RA cannot be used for property purchases, some members who currently rely on their MA overflows to finance their mortgages in properties may be affected.
CPF members who are using MA overflows to service housing mortgages may appeal to the Board to continue to use the overflowed amount to SA to service their loans, if their OA is depleted. They can tap on their SA savings to the extent that their mortgage payments are affected by the policy change.
BANK LOAN
Since 1 January 2003, flat buyers who are not eligible for an HDB loan will have to take a loan from bank/financial institution that is licensed by the Monetary Authority of Singapore to provide housing loans.
HDB flat purchasers / transferees are advised to check with the banks / financial institution on the granting of such housing loans. For those taking bank loans, a Letter of Offer must be obtained from the banks / financial institutions before you exercise the Option to Purchase for the HDB flat.
HDB LOAN
Eligibility Conditions for HDB Concessionary loan
HDB provides housing loans at concessionary interest rate to eligible flat buyers, subject to HDB's credit assessment and prevailing mortgage loan criteria.Since 1 January 2003, flat buyers who are not eligible for an HDB loan will have to take a loan from a bank/financial institution that is licensed by the Monetary Authority of Singapore to provide housing loans. Flat buyers can apply for an HDB loan if you and / or your essential occupiers (if any):
(a) have at least one buyer who is a Singapore citizen;
(b) have a monthly household income not exceeding $8,000;
(c) have not previously taken two or more HDB concessionary interest rate loans;
(d) have previously taken one HDB concessionary interest rate loan and one housing subsidy and buying a bigger flat type than your current flat or the flat last owned (if you currently do not own an HDB flat);
(e) have previously taken one HDB concessionary interest rate loan and one housing subsidy and the residential property last disposed off is not a private property;
(f) do not own any private residential property (including HUDC flat / Executive Condominium) in Singapore or overseas;
(g) do not own more than one market / hawker stalls or commercial / industrial property in Singapore or overseas;
(h) own one market / hawker stall or commercial / industrial property and operate the business yourself;
(i) are buying a 5 room or smaller resale flat under the Single Singapore Citizen (SSC) Scheme with a gross monthly income not exceeding $3,000.
Since 1 Jan 2003, HDB no longer grant market rate loans. Flats buyers who are not eligible for HDB’s housing loans can obtain market rate loans from any bank that is licensed to provide housing loans. They will benefit from more choices, and will be able to take advantage of the many competitive housing loan packages offered. Existing HDB market rate mortgagors can continue with their existing mortgages provided by HDB.
However, if they wish to refinance their loans with the banks, they may do so with HDB's prior consent. HDB continues to provide concessionary interest rate mortgage loans for Singapore Citizen first-time flat buyers and second-time buyers who are upgrading from smaller flats.
With bank origination, buyers taking bank loans need to have their loan applications supported by valuations that are performed by a private valuer assigned by HDB. From 1 Jan 2007, they are to obtain a Letter of Offer from the bank before they exercise the Option To Purchase.
Requirement on Use of HDB Assigned Valuers
From 1 Apr 2005, all resale flat buyers who are taking bank loans and using their CPF savings in the flat purchase or servicing of loan instalments, must have a valid valuation report from a private valuer assigned by HDB.
The valuation by the HDB-assigned valuer will be used to determine the financing limits i.e. quantum of CPF withdrawals, housing loans and the cash payment. This will also apply to those who are taking bank loans and using their CPF savings for the transfer of ownership of an existing flat at market valuation to them. From 19 July 2005, the housing loan ceiling has been raised from 80% to 90% of the purchase price or market valuation of the flat, whichever is lower.
The "cut-off" for the revised housing loan ceiling for resale transaction is based on date of resale applications received by HDB.Buyers should have a valid valuation report before they enter into an Option to Purchase with the sellers.
This is to help them to calculate the amounts of:
i) cash-over-valuation,
ii) cash payment,
iii) CPF money that can be used, and
iv) bank loan that they can take.
This will enable buyers to work out the financial plan before they submit their application to buy the resale flat. It will also facilitate the processing of their bank loan applications.
In the resale application submitted to HDB for processing, buyers will need to provide the valuation amount from a valid valuation report.The new rule is implemented to curb any illegal cashback practices. All parties must declare to HDB the flat's true resale price, and not enter into any agreement/arrangement that would inflate or understate the price.
As a further measure to curb the cashback practice, CPF Board has also announced on 21 February 2005 that it will conduct independent valuation on any suspected over-valued flats. This valuation will be used to determine the amount of CPF withdrawals and housing loan.
Procedures for Obtaining an HDB Valuation Report
Anyone can submit a request for valuation report if they have obtained prior consent from the flat owner. The requesters will have to pay the valuation and administrative fees when they submit the request.
Valuation requests submitted to HDB will be randomly assigned to the private valuers on its panel.
Submission of a valuation request
You can submit a valuation request either electronically or manually. For those who do not engage the services of a housing agent in the resale transaction, they can submit an online valuation request via e-Resale System.
For those who engaged the services of a housing agent from an agency accredited under the Singapore Accredited Estate Agencies (SAEA) scheme which subscribes to the HDB-ResaleNet System, the agent can submit the valuation request on their behalf via the exclusive HDB-ResaleNet System.For manual submission, the Valuation request form can be obtained from HDB Resale Office or any Branch Office.
Fees payable
The requestor has to pay the following fees:
Flat Type Valuation & Administrative Fee for Valuation Report
by post/hand via e-Resale/HDB-ResaleNet System
1 & 2-room
$127 Valuation Fee : $100 + $7 (*GST)Admin Fee : $20
$117 Valuation Fee : $100 + $7 (*GST)Admin Fee : $10
3-room & larger
$180.50 Valuation Fee : $150 + $10.50 (*GST)Admin Fee : $20
$170.50 Valuation Fee : $150 + $10.50 (*GST)Admin Fee : $10
Note:
i. *GST is 7%.
ii. Payment can be made in cash/cashier's order/money order.
iii.Payment can only be made by credit card/cash card for request submitted via e-Resale. iv.Payment for valuation requests submitted by agents from agencies accredited under the Singapore Accredited Estate Agencies (SAEA) scheme via HDB-ResaleNet System must be by GIRO.
The HDB valuation report is valid for 3 months from the date of report.
A valid valuation report must be submitted together with the resale/transfer application to HDB.
Advice to Buyers Taking Bank Loans
Under the new requirement, the minimum cash payment, amount of CPF withdrawal and housing loan from banks will be calculated based on the resale transacted price or the valuation by HDB-assigned valuer, whichever is lower.If the resale transacted price is higher than the valuation by HDB-assigned valuer, buyers will have to pay a cash-over-valuation.
This cash-outlay is in addition to the cash payment which is currently at 5% based on the lower of the purchase price or market value of the flat. It is important that buyers have a valid valuation report ready even before they enter into an Option to Purchase (contract) with the seller.
It will also be to the interest of the buyers to have the HDB valuation report ready at the time of applying for a housing loan from the banks. This will facilitate the processing of the loan application by the banks.
Similarly, the CPF withdrawal limit currently at 138% of the Valuation Limit (to be reduced to 120% by 1 Jan 2008) will be based on the valuation by an HDB-assigned valuer.
This withdrawal limit on the use of CPF savings by the buyers to service the mortgage loans is applicable to buyers taking bank loans. Once the CPF withdrawal limit is reached, they will have to pay their monthly instalments in cash. As home purchase is a long-term commitment, buyers should exercise financial prudence and also take into consideration the Valuation Limit requirement when buying a resale flat.
Limits on Use of CPF
Buyers taking bank loan can use the savings in their CPF Ordinary Account to service their mortgage loan. However, under the CPF Board's requirements, they are allowed to withdraw only up to a certain limit.
Since 1 January 2003, the CPF withdrawal limit for a housing loan obtained from a bank or financial institution is set at lower of 150% of the Valuation Limit or the Available Housing Withdrawal Limit (AHWL).
The 150% Valuation Limit will be reduced to 120% (2008 Jan).
Note: The Valuation Limit is the lower of the purchase price or valuation of the property at the time of purchase. Important Note:
Once the CPF withdrawal limit is reached, mortgagors will have to pay their monthly instalments in cash. The above change applies from 1 January 2003 to HDB flats bought with mortgage loans from banks/ financial institutions.
To find out how much you can withdraw from your CPF for housing, log on to CPF Board's Housing Withdrawal Calculator that can be found at the CPF Board's website @ www.cpf.gov.sg
For enquiries, please call CPF Call Centre @ 1800-2271188 (code 2) or e-mail to PHS bankloan@cpf.gov.sg
Cash Payment
HDB flat buyers who are getting a mortgage loan from banks have to pay a cash payment with effect from 1 Jan 2004. The cash payment will be eventually aligned with that of private property purchase, that is, 5% based on the lower of the purchase price or market value of the flat.
Note:
(i)The cash payment is computed based on purchase price or current market valuation of the flat, whichever is lower.
(ii)For purchase of resale flats, the cash payment is in addition to the Cash-Over-Valuation (COV) for cases where the transacted resale price is above market valuation. The COV must be paid in cash
Priority of Payment
When an HDB flat financed with a bank loan is sold, the sales proceeds will be applied in the following manner:
1st – to discharge the outstanding mortgage loan with the bank.
2nd – to refund the CPF savings withdrawn for the purchase of the property.
3rd – to pay the interest on the mortgage loan (from the date of default in payment) and interest on CPF monies withdrawn.
The housing loan to be granted is subject to credit assessment and full usage of CPF savings in the Ordinary Account.
The housing loan limit is as follow:
HOUSING LOAN LIMIT
Before 19 July 05 :up to 80%
On or after 19 July 05 :up to 90%
To go to Part 3 of HDB Purchase
Saturday, August 4, 2007
HDB PURCHASE PART 1
HDB Purchase Part 1
For prospective buyers, HDB purchase does represent good investment for a small sum of money. Firstly the price of HDB flats, though has risen recently, still remains affordable for the vast number of people. This includes the flexibility that it carries. You can rent or sub-rent some or all units.
Approval has to be obtained from HDB.. which, in recent days, has relaxed its policy of sub-letting. Generally, its Minimum Occupation Period (M.O.P) has been reduced. And of course, if you have excess cash, you can always buy more other private properties.. etc.
The revised M.O.P is
5 YEARS for owners of subsidized flats, i.e flats purchased directly from HDB or from the Open market with a CPF Housing Grant.
3 YEARS for owners of non-subsidized flats, i.e flats purchased directly from the Open market without CPF Housing Grant.
For more information, please call: 1800-2255432
Or go to http://www.hdb.gov.sg/ > Home Owners > Use and Ownership of Flats > Subletting Your Flat/Room > eServices
Eligibilty (HDB)
Applicant must be Singapore Citizen or Permanent Resident and should have a minimum combined income of S$24,000 per annum. Definition of income being: Bonuses, commission, overtime and other income sources can be taken into consideration at the banks’ or financial institutions’ discretion.
Most lenders have a minimum age requirement of 21 and max at 71 years old.
All mortgagors must be borrowers and vice-versa and capped to a maximum of four.
Cost Involved
1) Stamp Duties
For new purchase: 1st 180K – 1% , next 180K – 2%, above 360K – 3%
3) Cash Outlay Due To Difference Between Purchase Price And Valuation Price
For prospective buyers, HDB purchase does represent good investment for a small sum of money. Firstly the price of HDB flats, though has risen recently, still remains affordable for the vast number of people. This includes the flexibility that it carries. You can rent or sub-rent some or all units.
Approval has to be obtained from HDB.. which, in recent days, has relaxed its policy of sub-letting. Generally, its Minimum Occupation Period (M.O.P) has been reduced. And of course, if you have excess cash, you can always buy more other private properties.. etc.
The revised M.O.P is
5 YEARS for owners of subsidized flats, i.e flats purchased directly from HDB or from the Open market with a CPF Housing Grant.
3 YEARS for owners of non-subsidized flats, i.e flats purchased directly from the Open market without CPF Housing Grant.
For more information, please call: 1800-2255432
Or go to http://www.hdb.gov.sg/ > Home Owners > Use and Ownership of Flats > Subletting Your Flat/Room > eServices
Eligibilty (HDB)
Applicant must be Singapore Citizen or Permanent Resident and should have a minimum combined income of S$24,000 per annum. Definition of income being: Bonuses, commission, overtime and other income sources can be taken into consideration at the banks’ or financial institutions’ discretion.
Most lenders have a minimum age requirement of 21 and max at 71 years old.
All mortgagors must be borrowers and vice-versa and capped to a maximum of four.
Cost Involved
1) Stamp Duties
For new purchase: 1st 180K – 1% , next 180K – 2%, above 360K – 3%
2) Legal Fees
This usually costs between S$1750 to S$3500 depending on factors such as property type and choice of lawyer. CPF can be used to pay the legal fees, which is billed upon completion of your mortgage and/or purchase.
3) Cash Outlay Due To Difference Between Purchase Price And Valuation Price
If the bank’s or financer’s valuation is lower than your purchase price, you will have to pay the difference in cash before any loan can be disbursed.
4) 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.
Useful CPF links : Using CPF to buy a house , Changes to CPF Properties Scheme
Appointment of Lawyers
Lawyers performing the following functions are required when purchasing property:
Useful CPF links : Using CPF to buy a house , Changes to CPF Properties Scheme
Appointment of Lawyers
Lawyers performing the following functions are required when purchasing property:
a) Purchase and financing (if any) of property (acting on your behalf)
b) Housing loan application (acting on behalf of the bank or financial institution if you are taking a loan)
c) Withdrawal of funds from the CPF Board (if you are using CPF funds)
c) Withdrawal of funds from the CPF Board (if you are using CPF funds)
Friday, July 27, 2007
Procedure to Buy or Sell - (Locals/ Foreigners)
July 25
Procedure to Buy/Sell
Who Can Buy Private Property?
All Singapore citizens and companies can freely buy any type of private residential property. However, there are HDB and CPF restrictions that may affect you when you buy a private property. For flats bought directly from HDB (including flats bought from the open market with CPF Housing Grant)
a) The flats lessees must satisfy the required occupation period for the flat before acquiring the private property
b) The flat lessees must continue to stay in the HDB flat after acquiring the private property.
For flats bought from the open market without CPF Housing Grant
There is no need to satisfy the required occupation period for the flat before acquiring the private property. However, the flat lessees must continue to stay in the HDB flat after acquiring the private property.
The Buying / Selling Process for locals:
1) Select an agent
Optional, but recommended. A professional agent will not only help you to find the right property, but also ensure you get the right price, ensure all small details are covered prior to purchase, guide you through the process and make recommendations on financing and legal representation.
2) Find your property and agree a price
When reaching a preliminary agreement to buy, ensure that all important points have been discussed and agreed, including any repairs or changes prior to purchase, what stays and what goes, any special requirements from both side and the anticipated schedule.
3) Sign an Option to Purchase
For Private Property - This is obtained from the seller through their lawyer or agent. At this point you are required to pay a non-refundable option fee (normally 1% of purchase price). The option period is usually 14 days.For HDB Property - Since 15 April 2003, the HDB standard Option to Purchase has replaced the Sale & Purchase Agreement as the form of contract to be used in resale flat transactions. Buyers and sellers should not enter into any other forms of agreement or supplemental agreements.
4) Appoint a Lawyer
You now need to appoint a lawyer to make legal enquiries on the status of the seller, the title of the property and the terms of the sale.
5) Arranging Financing
Compare interest rates and special terms when choosing your finance scheme. You can apply for withdrawal of CPF savings by completing an application together with a valuation report prepared by a licensed valuer who is on the CPF panel of valuers.
6) Exercise the Option / HDB 1st Appointment
For Private Property - If all is well you now sign the sale contract, and pay 5% of the purchase price (less the option fee). You also need to pay stamp duty within 14 days of the contract.
For HDB Property - The buyer and seller must both attend the Sales Declaration & Registration appointment to seal the closing price. After this appointment, HDB will check eligibility of the transaction and arrange for a 1st Appointment – usually about 4 weeks after the Sales Declaration.
7) Legal Inspection & Completion
Your lawyer will carry out an investigation of title deeds and send requisitions to various government departments. The seller’s lawyer will also prepare the completion statement and send documents for stamping to effect completion.
8) Settle Payment and Handover / HDB 2nd Appointment
For Private Property - You now settle the outstanding balance of the purchase price. This might be 8 to 12 weeks after exercising the option. The seller’s lawyer will then handover the keys and title deed of conveyance, and you become the owner of your new home.
For HDB Property -
Completion takes place at the 2nd Appointment, usually about a month after the 1st Appointment. The insurance and mortgage is arranged and stamp duty, legal fees and agent fees are paid. The sale is completed and arrangements are made for moving into your new home.
Entire Process Time: Usually between 10 to 14 weeks
Foreigners Buying
A foreign person is defined under the Residential Property Act to be:
(a) any person who is not a citizen,
(b) any permanent resident,
(c) any foreign company or any converted foreign company,
(d) any society or converted society.
Hence, even a permanent resident is categorised as a foreigner unlike in the case of purchasing a Housing and Development Board flat, whereby a permanent resident could be the applicant or the authorised occupant of the said flat.
However, it does not necessarily mean that all foreigners are restricted from purchasing residential properties in Singapore. A foreign person can still buy residential property caught under the Act if he / she had obtained explicit approval from the Land Dealings Approval Unit (Controller of Residential Property; Section 25 of Residential Property Act).
The approval will be looked upon favourably if: - the individual is a permanent resident- an individual who can provide economic benefits to Singapore or makes adequate contribution in Singapore; and- one who possesses professional or other qualifications or experience which are of benefits or advantageous to Singapore.
Any foreigners who attained ownership of residential properties in Singapore prior to the commencement of the Act can have the right to retain it. In the event the said foreigners are desirous to sell their properties, it shall have to be sold only to any Singapore citizen or approved purchasers as stipulated by the Act.
Foreigners who are interested in purchasing residential properties but have yet to attain explicit approval from the Land Dealings Unit, the real estate agent can still have the foreigners to commit in the sale and purchase of the property concerned by spelling out clearly in the Option to purchase documents by the insertion of a clause, i.e. “the intended purchase of the above mentioned property by the intending Purchases, namely one ___________ is subject to explicit approval from the Land Dealings Approval Unit, Controller of Residential Property as stipulated by the governing Residential Property Act 1976.
In the event the approval is not validly obtained, it is hereby understood that the owners shall refund all monies without interests accrued to the said intending Purchaser and thereafter neither party shall have any claims, demands, proceedings, costs, expenses whatsoever against each other as pertaining to the said cancellation of intending sale and purchase of the said property concerned”.
Foreigners can still attain interest in Singapore residential properties with a written approval from the Controller of Residential Property Land Dealings:- A unit in an approved condominium development. - Any non-residential, commercial or industrial property. - You are buying the property for owner-occupation.
For restricted property such as vacant land, landed properties such as bungalows, semi-detached and terrace houses and units in buildings of less than 6 levels, etc. foreigners need to apply for approval from Singapore Land Authority before buying.
For more details on application, visit the Singapore Land Authority website. For HDB flats, HDB shop-houses and executive condominiums, eligibility is subjected to the Housing and Development Board.To buy a flat directly from HDB, you must be a Singapore citizen, must include another Singapore citizen or Singapore permanent resident to form a family nucleus.
To buy a flat from the resale market, you must be a Singapore citizen or Singapore permanent resident. Include at least one listed occupier who is a Singapore permanent resident or Singapore citizen.Are there any restrictions on home loans for foreigners?
Foreigners and permanent residents can borrow loans up to 70% - 80% of the purchase price of the property subjected to different banks criteria. Non-Singapore companies cannot be granted Singapore dollar loans to purchase residential properties.
What conditions must I fulfill if I am a Permanent Resident getting a home loan?
To obtain Singapore dollar loan, you have to provide: - A written understanding that you do not have outstanding housing loans from any other financial institutions in Singapore.
Procedure to Buy/Sell
Who Can Buy Private Property?
All Singapore citizens and companies can freely buy any type of private residential property. However, there are HDB and CPF restrictions that may affect you when you buy a private property. For flats bought directly from HDB (including flats bought from the open market with CPF Housing Grant)
a) The flats lessees must satisfy the required occupation period for the flat before acquiring the private property
b) The flat lessees must continue to stay in the HDB flat after acquiring the private property.
For flats bought from the open market without CPF Housing Grant
There is no need to satisfy the required occupation period for the flat before acquiring the private property. However, the flat lessees must continue to stay in the HDB flat after acquiring the private property.
The Buying / Selling Process for locals:
1) Select an agent
Optional, but recommended. A professional agent will not only help you to find the right property, but also ensure you get the right price, ensure all small details are covered prior to purchase, guide you through the process and make recommendations on financing and legal representation.
2) Find your property and agree a price
When reaching a preliminary agreement to buy, ensure that all important points have been discussed and agreed, including any repairs or changes prior to purchase, what stays and what goes, any special requirements from both side and the anticipated schedule.
3) Sign an Option to Purchase
For Private Property - This is obtained from the seller through their lawyer or agent. At this point you are required to pay a non-refundable option fee (normally 1% of purchase price). The option period is usually 14 days.For HDB Property - Since 15 April 2003, the HDB standard Option to Purchase has replaced the Sale & Purchase Agreement as the form of contract to be used in resale flat transactions. Buyers and sellers should not enter into any other forms of agreement or supplemental agreements.
4) Appoint a Lawyer
You now need to appoint a lawyer to make legal enquiries on the status of the seller, the title of the property and the terms of the sale.
5) Arranging Financing
Compare interest rates and special terms when choosing your finance scheme. You can apply for withdrawal of CPF savings by completing an application together with a valuation report prepared by a licensed valuer who is on the CPF panel of valuers.
6) Exercise the Option / HDB 1st Appointment
For Private Property - If all is well you now sign the sale contract, and pay 5% of the purchase price (less the option fee). You also need to pay stamp duty within 14 days of the contract.
For HDB Property - The buyer and seller must both attend the Sales Declaration & Registration appointment to seal the closing price. After this appointment, HDB will check eligibility of the transaction and arrange for a 1st Appointment – usually about 4 weeks after the Sales Declaration.
7) Legal Inspection & Completion
Your lawyer will carry out an investigation of title deeds and send requisitions to various government departments. The seller’s lawyer will also prepare the completion statement and send documents for stamping to effect completion.
8) Settle Payment and Handover / HDB 2nd Appointment
For Private Property - You now settle the outstanding balance of the purchase price. This might be 8 to 12 weeks after exercising the option. The seller’s lawyer will then handover the keys and title deed of conveyance, and you become the owner of your new home.
For HDB Property -
Completion takes place at the 2nd Appointment, usually about a month after the 1st Appointment. The insurance and mortgage is arranged and stamp duty, legal fees and agent fees are paid. The sale is completed and arrangements are made for moving into your new home.
Entire Process Time: Usually between 10 to 14 weeks
Foreigners Buying
A foreign person is defined under the Residential Property Act to be:
(a) any person who is not a citizen,
(b) any permanent resident,
(c) any foreign company or any converted foreign company,
(d) any society or converted society.
Hence, even a permanent resident is categorised as a foreigner unlike in the case of purchasing a Housing and Development Board flat, whereby a permanent resident could be the applicant or the authorised occupant of the said flat.
However, it does not necessarily mean that all foreigners are restricted from purchasing residential properties in Singapore. A foreign person can still buy residential property caught under the Act if he / she had obtained explicit approval from the Land Dealings Approval Unit (Controller of Residential Property; Section 25 of Residential Property Act).
The approval will be looked upon favourably if: - the individual is a permanent resident- an individual who can provide economic benefits to Singapore or makes adequate contribution in Singapore; and- one who possesses professional or other qualifications or experience which are of benefits or advantageous to Singapore.
Any foreigners who attained ownership of residential properties in Singapore prior to the commencement of the Act can have the right to retain it. In the event the said foreigners are desirous to sell their properties, it shall have to be sold only to any Singapore citizen or approved purchasers as stipulated by the Act.
Foreigners who are interested in purchasing residential properties but have yet to attain explicit approval from the Land Dealings Unit, the real estate agent can still have the foreigners to commit in the sale and purchase of the property concerned by spelling out clearly in the Option to purchase documents by the insertion of a clause, i.e. “the intended purchase of the above mentioned property by the intending Purchases, namely one ___________ is subject to explicit approval from the Land Dealings Approval Unit, Controller of Residential Property as stipulated by the governing Residential Property Act 1976.
In the event the approval is not validly obtained, it is hereby understood that the owners shall refund all monies without interests accrued to the said intending Purchaser and thereafter neither party shall have any claims, demands, proceedings, costs, expenses whatsoever against each other as pertaining to the said cancellation of intending sale and purchase of the said property concerned”.
Foreigners can still attain interest in Singapore residential properties with a written approval from the Controller of Residential Property Land Dealings:- A unit in an approved condominium development. - Any non-residential, commercial or industrial property. - You are buying the property for owner-occupation.
For restricted property such as vacant land, landed properties such as bungalows, semi-detached and terrace houses and units in buildings of less than 6 levels, etc. foreigners need to apply for approval from Singapore Land Authority before buying.
For more details on application, visit the Singapore Land Authority website. For HDB flats, HDB shop-houses and executive condominiums, eligibility is subjected to the Housing and Development Board.To buy a flat directly from HDB, you must be a Singapore citizen, must include another Singapore citizen or Singapore permanent resident to form a family nucleus.
To buy a flat from the resale market, you must be a Singapore citizen or Singapore permanent resident. Include at least one listed occupier who is a Singapore permanent resident or Singapore citizen.Are there any restrictions on home loans for foreigners?
Foreigners and permanent residents can borrow loans up to 70% - 80% of the purchase price of the property subjected to different banks criteria. Non-Singapore companies cannot be granted Singapore dollar loans to purchase residential properties.
What conditions must I fulfill if I am a Permanent Resident getting a home loan?
To obtain Singapore dollar loan, you have to provide: - A written understanding that you do not have outstanding housing loans from any other financial institutions in Singapore.
Monday, July 23, 2007
How to Check Land and Property Information in Singapore
July 22
Today I will, as promised earlier, talk about how to check a prospective land or property. This is a very important step before sourcing for financial help in getting that house or condo you want.
Question : Where can I go to a one-stop online service to have quick and easy access to land and property information?
Answer : INLIS!
Integrated Land Information Service (INLIS) is a one-stop ON-LINE service designed for property buyers, real estate agents, valuers, developers, architects, surveyors, engineers, lawyers to have quick and easy access to land and property information.
The information include:
a) Property Title Information: This search provides basic information on land such as tenure, area, property address, ownership, encumbrances such as caveats and mortgages, last transacted price and state land encroachment information where available.
b) Property Ownership Information: This search provides basic information on ownership and last transacted price, where available. This information will be useful for housing agents and potential property buyers.
c) Land Information:
- Lot Particulars. This search provides basic information on land such as tenure, area, property address and reference to records of land transactions. This service is useful as a preliminary search on land.
d) Property Title Information with Survey Map: This search provides a combination of the information available in Property Title Information (refer to item 1) and a survey map of the property.
e) Survey Cadastral Map: This search shows the areas and boundaries of land parcels. Other information available includes land lot numbers, road names and certified plan numbers. Certified PlanCP Plans showing the final boundaries and areas of the lots. Information shown in a CP includes bearings, distances, co-ordinates, boundary points, and areas.Strata Certified PlanCPST Plans showing the final boundaries and areas of strata lots. Information shown in a CPST includes final strata boundaries and areas. Registrar of Title PlanRT Plan is a survey plan showing the provisional boundaries and areas of land lots. For privately owned land parcels, the plans are prepared by private registered surveyors and approved by the Chief Surveyor. The RT Plans will be superseded by the Certified Plan after final ground survey has been conducted.
f) Horizontal Control Points: This report offers the co-ordinates of a point are given with reference to the WGS 84 spheroid (Latitude and Longitude) and the grid co-ordinates on the SVY21 datum (Northing and Easting).
g) Vertical Control Points: Vertical Control Points are also called Precise Level Benchmarks (PLBM) that formed the primary levelling network in Singapore. A locality sketch or photo image is also included for easy reference.Encroachment Boundary PlanETGES enables the prospective owner of a property to be aware of an encroachment stemming from the private property onto State Land. This search can be done via private lot number, strata lot number and property address. The search provides textual and graphic information on nature and extent of the encroachment, necessary procedure for retention of the encroachment.
h) Road Line Plan: The road safeguarding information is made available to the public through LTA's Road Line Plans. It is one of the searches required by lawyers when transacting properties and by architects and engineers for putting up development proposals.
i) List of Schools near Property: This report shows a list of school within 1 or 2 kilometers from the selected school.
j) Distance between School and Property:
This report shows the Distance Code (1 kilometer or 2 kilometers) the address is with relating to the selected school.Click here for more.
Source: Singapore Land Authority (SLA)
Refer to: http://www.sla.gov.sg/htm/hom/index.htm
Today I will, as promised earlier, talk about how to check a prospective land or property. This is a very important step before sourcing for financial help in getting that house or condo you want.
Question : Where can I go to a one-stop online service to have quick and easy access to land and property information?
Answer : INLIS!
Integrated Land Information Service (INLIS) is a one-stop ON-LINE service designed for property buyers, real estate agents, valuers, developers, architects, surveyors, engineers, lawyers to have quick and easy access to land and property information.
The information include:
a) Property Title Information: This search provides basic information on land such as tenure, area, property address, ownership, encumbrances such as caveats and mortgages, last transacted price and state land encroachment information where available.
b) Property Ownership Information: This search provides basic information on ownership and last transacted price, where available. This information will be useful for housing agents and potential property buyers.
c) Land Information:
- Lot Particulars. This search provides basic information on land such as tenure, area, property address and reference to records of land transactions. This service is useful as a preliminary search on land.
d) Property Title Information with Survey Map: This search provides a combination of the information available in Property Title Information (refer to item 1) and a survey map of the property.
e) Survey Cadastral Map: This search shows the areas and boundaries of land parcels. Other information available includes land lot numbers, road names and certified plan numbers. Certified PlanCP Plans showing the final boundaries and areas of the lots. Information shown in a CP includes bearings, distances, co-ordinates, boundary points, and areas.Strata Certified PlanCPST Plans showing the final boundaries and areas of strata lots. Information shown in a CPST includes final strata boundaries and areas. Registrar of Title PlanRT Plan is a survey plan showing the provisional boundaries and areas of land lots. For privately owned land parcels, the plans are prepared by private registered surveyors and approved by the Chief Surveyor. The RT Plans will be superseded by the Certified Plan after final ground survey has been conducted.
f) Horizontal Control Points: This report offers the co-ordinates of a point are given with reference to the WGS 84 spheroid (Latitude and Longitude) and the grid co-ordinates on the SVY21 datum (Northing and Easting).
g) Vertical Control Points: Vertical Control Points are also called Precise Level Benchmarks (PLBM) that formed the primary levelling network in Singapore. A locality sketch or photo image is also included for easy reference.Encroachment Boundary PlanETGES enables the prospective owner of a property to be aware of an encroachment stemming from the private property onto State Land. This search can be done via private lot number, strata lot number and property address. The search provides textual and graphic information on nature and extent of the encroachment, necessary procedure for retention of the encroachment.
h) Road Line Plan: The road safeguarding information is made available to the public through LTA's Road Line Plans. It is one of the searches required by lawyers when transacting properties and by architects and engineers for putting up development proposals.
i) List of Schools near Property: This report shows a list of school within 1 or 2 kilometers from the selected school.
j) Distance between School and Property:
This report shows the Distance Code (1 kilometer or 2 kilometers) the address is with relating to the selected school.Click here for more.
Source: Singapore Land Authority (SLA)
Refer to: http://www.sla.gov.sg/htm/hom/index.htm
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