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flameboy

Can I Buy A Condo Even Though I Currently Have A Hdb Loan

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Guys & financial gurus,

I got a real life scenario & see if anyone can help out in getting that 2nd property.

We got a HDB fully paid. Our age is 35 & 40. Virtually debtless. Combi income is $8.5K

CPF both me & my wife combined is OA-$45,000 SA-$96,00 CPFIS - $23,000.

Let's say we intend to get a 2nd property this year, what is the excess we can draw from our

CPF to pay for the 2nd prop based on our illustration above?

Our home bank loan will be based on? 1) Value X 90% minus our CPF excess? or

2) Value X 90%?

Thks

Cheers

 

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For the CPF Minimum Sum is Husband and wife total 117k from 1 July 2009.

Include OA + SA + investment.

Anything overflow from 117k can be use for 2nd property purchase

Bank loan is base on 80% of the valuation price or selling price whichever is lower.

Now no more 90% loan for private property.

Eg1,

the purchase price is $900k and bank valuation value it @ 800k.

Bank loan is 80% X 800k =640k loan

Hence 900k-640k = 260k either CPF or hard cash

Eg2,

the purchase price is $900k and bank valuation value it @ 1M.

Bank loan is 80% X 900k =720k loan

Hence 900k-720k = 180k either CPF or hard cash

Note: CPF Minimum Sum is not fix. It is subjected for adjusted yearly on 1st July by CPF.

It will only increase.

 

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For the CPF Minimum Sum is Husband and wife total 117k from 1 July 2009.

Include OA + SA + investment.

Anything overflow from 117k can be use for 2nd property purchase

Bank loan is base on 80% of the valuation price or selling price whichever is lower.

Now no more 90% loan for private property.

Eg1,

the purchase price is $900k and bank valuation value it @ 800k.

Bank loan is 80% X 800k =640k loan

Hence 900k-640k = 260k either CPF or hard cash

Eg2,

the purchase price is $900k and bank valuation value it @ 1M.

Bank loan is 80% X 900k =720k loan

Hence 900k-720k = 180k either CPF or hard cash

Note: CPF Minimum Sum is not fix. It is subjected for adjusted yearly on 1st July by CPF.

It will only increase.

Need to add in the stamp duties to the equation. They are not cheap!

Age also is a factor for the CPF Minimum sum too?

 

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For the CPF Minimum Sum is Husband and wife total 117k from 1 July 2009.

Include OA + SA + investment.

Anything overflow from 117k can be use for 2nd property purchase

Bank loan is base on 80% of the valuation price or selling price whichever is lower.

Now no more 90% loan for private property.

Eg1,

the purchase price is $900k and bank valuation value it @ 800k.

Bank loan is 80% X 800k =640k loan

Hence 900k-640k = 260k either CPF or hard cash

Eg2,

the purchase price is $900k and bank valuation value it @ 1M.

Bank loan is 80% X 900k =720k loan

Hence 900k-720k = 180k either CPF or hard cash

Note: CPF Minimum Sum is not fix. It is subjected for adjusted yearly on 1st July by CPF.

It will only increase.

Thks for the reply.

Another question. Can we use our fully paid up HDB to pledge to the Minimum sum?

Thks again & cheers.

 

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Thks for the reply.

Another question. Can we use our fully paid up HDB to pledge to the Minimum sum?

Thks again & cheers.

Sell yr hse, $back into yr OA, then ...... Why sell? rent it out for $, buy private lah, see my previous post: The "minimum sum" issue is comparative easy to control than the 120% rule.

The 120% rule applies for 1st & 2nd property, but when buy 2nd property, (OA+SA)must keep at a balance of 117k.

Believed many bank loan takers do not really aware a risk that one day their accumulated instalment payment(by cpf) reachs 120% of valuation price of their property, and eventually receiving bank letter ask them to pay the instalment by CASH, though their OA still have million dollar. This is especially true with "high" loan tenure, say 30 years. Example as follow:

1. Property price=520K

2. Valuation = 500k

3. COV=20k

4. Maximum allowable amount to use in OA to pay for this pty=500k x120%=600k

5. 5% paid in CASH (inc deposit + OTP fee) = 500k x 5% = 25k

6. COV paid by CASH

7. Bankloan amount = 500k x80% = 400K

7-1. Stamp duty = 500k x 3% -5,400=$9,600 (cpf)

8. So, OA has been used up to pay at this point = (20%-5%)x500k +9600=$84,600

8-1. You are therefore allowed to use only =600k-84600=$515,400 to pay the remaining!

Say:

8. Loan tenure =30 year = 360 mnthly instalments

9. Intestest=3%, presumed un-variable thoughtout 360 mnthly instalment

10. Monthly payment = $1686.42 = $1,000(interest) + $686.42 (payment toward principal)

11. 3 years will pay = $60,711.12.

12. 30 years will pay = $607,111.2,

See 8-1, u are allowed to use only $515,400, the balance of 607.1112k-515,400=91,711.2 has to be settle by CASH! though you have a million in your OA.

13. You will receive bank letter at 360-55 = 305 instalments, ask u to pay remaining monthly instalment in CASH!

14. If interest rate increase? Will get bank's letter faster!

15. Advice: cut tenure period as short as possible to cut down interest!

Did I miss out anything?

Edited by bepgof
 

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- Start from 2013 July, minimum sum will be raised to $134,000.

Worth considerating the following if u want to buy a private while keep hdb(fully paid)

-Actual purchase price = listed price + (LPx3%-5,400)+ abt 3K for (legal, admin,etc)

- 5% cash downpayment

- within 14 days to exercise OTP, then pay 15% (CPF, OA)

- Progressive payment start...

- Can loan only 80% of LP

- LPx3%-5,400= stamp, by cpf

Conclusion:

- safe if u can clear 40% of LP+ stamp duty (by cash & cpf)

-remaining 60% by loan, best yr joined combined income cpf OA can pay the monthly instalment (best <30 year tenure)

- can meet the minimum sum.

- Keep rental yield from HDB for rainy days.

*** Mistake from previous post, i think. Say if you used 100K(OA) in yr HDB unit, this 100K can be use to offset the minimum sum rule. I think, correct me if I'm wrong.

Edited by bepgof
 

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Guys & financial gurus,

I got a real life scenario & see if anyone can help out in getting that 2nd property.

We got a HDB fully paid. Our age is 35 & 40. Virtually debtless. Combi income is $8.5K

CPF both me & my wife combined is OA-$45,000 SA-$96,00 CPFIS - $23,000.

Let's say we intend to get a 2nd property this year, what is the excess we can draw from our

CPF to pay for the 2nd prop based on our illustration above?

Our home bank loan will be based on? 1) Value X 90% minus our CPF excess? or

2) Value X 90%?

Thks

Cheers

I think the "minimum sum" is not an issue to you as yr hdb loan has been cleared (those paid $(OA), I think inclusive of minimum sum)

- you can use cpf to pay the 15% after signing otp, stamp duty as well.

- Be sure you can loan the $ desired from bank

- safer rule, as i always mentioned, to have 40%(cash +OA)+ stampduty ON HAND, then consider buying a private .

Edited by bepgof
 

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Thks for the reply.

Another question. Can we use our fully paid up HDB to pledge to the Minimum sum?

Thks again & cheers.

have raised up this qns before, CANNOT =(

i would like to pledge my hdb too if possible

 

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have raised up this qns before, CANNOT =(

i would like to pledge my hdb too if possible

Got this from Spore Property Investor website -

Your first property can be used as a pledge for half the monies required under the Minimum sum. This means that if you with to use CPF for your second property (as at 2009), you must have at least $58,500 ($117,000 x 50%). Any CPF above $58,500 can be used for your second property.

So I take it you can use your CPF excesses for 2nd property right?

Cheers

 

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hmm..... i only knw that pledging a HDB is for education purpose only.

can anyone enlighten pls....

i do have a full paid up HDB, and would like to purchase a private soon but i do not meet the minimum sum required

 

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Got this from Spore Property Investor website -

Your first property can be used as a pledge for half the monies required under the Minimum sum. This means that if you with to use CPF for your second property (as at 2009), you must have at least $58,500 ($117,000 x 50%). Any CPF above $58,500 can be used for your second property.

So I take it you can use your CPF excesses for 2nd property right?

Cheers

personally, if anything related to Government rule and requirement.

I would prefer to ask directly to the respective department instead from 3rd source website.

Don't forget, rule does change.

What it mention , might be correct during that time. But is it up-to-date?

Just my thought

 

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Thks for the reply.

Another question. Can we use our fully paid up HDB to pledge to the Minimum sum?

Thks again & cheers.

Yes you do, just checked HDB web, 50%. For joint applicants(2nd property), minimum sum can become husband+wife =1.5 time, instead of 1 from each.

120% VL & minimum sum rules confuse many ppl, incl me. Use yr singpass to check again.

Edited by bepgof
 

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personally, if anything related to Government rule and requirement.

I would prefer to ask directly to the respective department instead from 3rd source website.

Don't forget, rule does change.

What it mention , might be correct during that time. But is it up-to-date?

Just my thought

Yeah, thats a good idea, not every change is announced...sometimes they just quietly change somewhere on the website...

 

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Q: Can I use my CPF to purchase more than one property?

A: Yes, you may use your CPF to purchase more than one property.

However, if you already own a property (HDB flat or private property) bought with your CPF savings and wish to buy another property with CPF savings after 1 July 2006, you must set aside half of the prevailing Minimum Sum before you can use the excess savings in your Ordinary Account for the second/subsequent property. Savings in the Special Account (including the amount used for investments) and Ordinary Account can be used to meet this required amount.

Please note that as the Minimum Sum will be raised in July each year, the amount you need to set aside will be adjusted accordingly. Please click here for more details.

If you currently own more than one property bought with CPF savings before 1 July 2006, you need not set aside half of the prevailing Minimum Sum unless you subsequently buy another property using your CPF savings on or after 1 July 2006.

Please note that this is not applicable if you are applying to use your CPF to purchase a second or subsequent property with non-related singles. Non-related singles can only jointly use their CPF to purchase one property (HDB flat or private property).

hope this help :)http://ask-us.cpf.gov.sg/explorefaq.asp?category=23098

 

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For sharing, my own account for below 2 files (letter received from CPF baoard) with regard to purchasing of 2nd property. Letter highlighted the 120% VL & minimum sum rules. Be careful.

- Bought hdb resale 5 rm in Aug 2009

- Sold private condo in Sept 2009

Files delected intended on 9/5/10.

Edited by bepgof
 

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