How Much Cash Money To Pay For Cov Resale Flat

[dannywmp 3]

Hi,

I am kinda confused with the term COV - Cash Over Valuation

Take for instant I am interested in an unit valuation at $380K and seller request $20K COV.

Thus Selling Price = $400K

For this $20K COV, must I really pay it in cash?

Since I am getting a bank loan, that require to pay 5% cash downpayment of the selling price - another $20K Cash,

Therefore, I need to pay a total of $40K Cash?

If the above is so, when must this $40K be paid, is it during the 1st appointment or 2nd appointment?

Thanks in advance for help....

[Zc31 0]

Of course COV must use cash.

5% dp use CPF. Insufficient, top up with cash.

1st appt check all documents, verification etc....

Slightly before 2nd appt, the deduction will be made. Of course this also varies, might be earlier, might be later due to billing cycle.

[Phantom 1]

Hi,

I am kinda confused with the term COV - Cash Over Valuation

Take for instant I am interested in an unit valuation at $380K and seller request $20K COV.

Thus Selling Price = $400K

For this $20K COV, must I really pay it in cash?

Since I am getting a bank loan, that require to pay 5% cash downpayment of the selling price - another $20K Cash,

Therefore, I need to pay a total of $40K Cash?

If the above is so, when must this $40K be paid, is it during the 1st appointment or 2nd appointment?

Thanks in advance for help....

Question: Have you got a bank loan yet?

Cash over valuation means what it means.

In your Example. Purchase Price is 400k. Valuation is 380k.

Bank only lends to valuation. Hence you need to fork out 20k which is the "cash above valuation"

Let's assume you are taking a 80% loan.

5% Cash $19k

15% CPF $57k

Don't forget to reserve fees for stamp duty and legal fees etc.

You will have to come out $39k

[dannywmp 3]

Question: Have you got a bank loan yet?

Cash over valuation means what it means.

In your Example. Purchase Price is 400k. Valuation is 380k.

Bank only lends to valuation. Hence you need to fork out 20k which is the "cash above valuation"

Let's assume you are taking a 80% loan.

5% Cash $19k

15% CPF $57k

Don't forget to reserve fees for stamp duty and legal fees etc.

You will have to come out $39k

Thanks for all the reply and yes I am taking a bank loan.

All in all, I must have at least $45K cash in hand for settlement...

not forgetting the Renovation cost----Easily hit another $40K

Total $85K HARD CASH!!!

Must relook into my cash planning already....

[Warrior88 0]

Stamp Fees = 6,600

Legal Fees = 2,500 ~ 3,000 ( sometimes bank subsidy 0.4% ~ 0.5% loan amount )

If I am not wrong, both can use CPF after setting aside the minimum sum of 57,000 ( OA & SA )

[Phantom 1]

Stamp Fees = 6,600

Legal Fees = 2,500 ~ 3,000 ( sometimes bank subsidy 0.4% ~ 0.5% loan amount )

If I am not wrong, both can use CPF after setting aside the minimum sum of 57,000 ( OA & SA )

You can use from CPF. Yes.

Subsidy depends on the loan amount. In your case,

80% of $380,000 = $304,000

Subsidy around $1216 - $1500

Legal fee please check if

1) Include stamping fee around $500

2) Include Gst 7%

3) CPF Charge around $500

Possible to get nett 2500 all in. or even 2000 exclude gst.

Cheers.

[Warrior88 0]

I thought stamp fees is calulated as below

1st 180k = 1%

2nd 180k = 2%

3rd 180k = 3%

So for 400k, it should be 6,600 ????

[Phantom 1]

I thought stamp fees is calulated as below

1st 180k = 1%

2nd 180k = 2%

3rd 180k = 3%

So for 400k, it should be 6,600 ????

$6,600

(3% - $5,400) = 6,600.00

[Warrior88 0]

Currently, requesting for letter of offer. Trying for 80% loan

OCBC = 80% ok

Stand Chart = 70% ( for 2nd house )

May Bank = 70% ( for hdb house )

But OCBC rates are on the higher side

[horseman 0]

$58,500 - the CPF minimum sum cash component went up on 1 July 09 by $5.5k from $53,000. My wife and I were caught by the increase. We exercised the option in June but the sale will be completed after 1 July so the higher limit applies.

CPF can be used for stamp duty and legal fees (in excess of the minimum sum cash component), but still have to pay cash first and apply to CPF to reinburse later.

Stamp Fees = 6,600

Legal Fees = 2,500 ~ 3,000 ( sometimes bank subsidy 0.4% ~ 0.5% loan amount )

If I am not wrong, both can use CPF after setting aside the minimum sum of 57,000 ( OA & SA )

[schakia 0]

$58,500 - the CPF minimum sum cash component went up on 1 July 09 by $5.5k from $53,000. My wife and I were caught by the increase. We exercised the option in June but the sale will be completed after 1 July so the higher limit applies.

CPF can be used for stamp duty and legal fees (in excess of the minimum sum cash component), but still have to pay cash first and apply to CPF to reinburse later.

What does CPF can be used for stamp duty and legal fees (in excess of the minimum sum cash component), means? Does it mean if i have <$58,500 in my CPF, i can't use it to pay for the stamp fees and legal fees?

If i had only 50k in my cpf, can i use all to pay for my resale flat?

Thanks all in advance!

Cheers!

[sehnsucht 0]

What does CPF can be used for stamp duty and legal fees (in excess of the minimum sum cash component), means? Does it mean if i have <$58,500 in my CPF, i can't use it to pay for the stamp fees and legal fees?

If i had only 50k in my cpf, can i use all to pay for my resale flat?

Thanks all in advance!

Cheers!

AFAIK that rule only kicks in for 2nd property purchases. Any CPF usage for 2nd property purchase (whether it being loan or legal/stamp fee payments) is only allowed after you meet the MSS requirement. This of course assumes that there is CPF usage for the first property. For sole property purchase (first property etc) this will not matter. You can drain your CPF to 0. The rule also applies to borrowers who have chosen to withdraw 50% of their OA at 55 as per the retirement scheme.

In dual transaction situations (selling house and buying another within a close time frame), any intended proceeds from the impending property sale is usually ignored as the funds will more often not arrive in time for the stamp duty payment. This is the main reason why borrowers in such situations have to opt for bridging loans to settle their temporary commitments (stamp, downpayments etc).

Edited October 7, 2009 by sehnsucht

[felin03 0]

hi all,

sorry but im pretty confused with all these too. let's say if im going to buy a 220k flat with a cov of 15k, may i know how much cash do i have to come up with including stamp fee and legal fee?

my cpf do not have the minimum sum yet and im taking a bank loan.

thanks in advance.

[JustMortgage 0]

hi all,

sorry but im pretty confused with all these too. let's say if im going to buy a 220k flat with a cov of 15k, may i know how much cash do i have to come up with including stamp fee and legal fee?

my cpf do not have the minimum sum yet and im taking a bank loan.

thanks in advance.

Assuming there's no grant involved.

Valuation 220k

COV 15k

Purchase Price = 235

If you are taking an 80% Mortgage Loan,

80% of 220k = $176,000.00

5% of the valuation price to be cash = $11,000.00

15% can be from CPF = $33,000.00

Stamp Duty = $1,650.00 (Can be from CPF)

Legal Fee can be around $2000 to 2500

Assuming that the Legal fee is $2500 and your subsidy is $700 from the bank.

You stlll need around $1800

Therefore Cash required

= $15,000 (COV) + $11,000 (5% Downpayment)

= $26,000 Cash

CPF required

= $1,650 (Stamp Duty) + $33,000.00 (15% Downpayment) + $1800 (Legal Fees)

= $36,450 CPF

This Example is based on minimum cash and assuming that you have enough CPF.

[felin03 0]

a million thanks ***. really appreciate the clear breakdown you given