Cpf Minimum Sum To Keep Aside?

[qin17 0]

Hi All

Anyone know is it there a a minimum sum that we must set aside for our cpf acct for resale flat if we are using cpf to repay our hdb loan. I heard that cpf board will only allow us to withdraw cpf from our acct at lower of valuation price or purchase price. If we din have the minimum sum set aside inside our ordinary + special acct, we are unable to use cpf to repay our loan anymore. Anyone encounter that?

[Amy Choon 1]

paying of loan using cpf for hdb flats, normally they will wipe out whatever is in your cpf account ma. or that rule has changed? it was for me 8 years back and for my friends few years ago...

[bepgof 20]

Anyone know is it there a a minimum sum that we must set aside for our cpf acct for resale flat if we are using cpf to repay our hdb loan. I heard that cpf board will only allow us to withdraw cpf from our acct at lower of valuation price or purchase price. If we din have the minimum sum set aside inside our ordinary + special acct, we are unable to use cpf to repay our loan anymore. Anyone encounter that?

1st property:

OA amount can be activated = 120% of valuation price.

Example:

Valuation =$500K

COV=$10K (CASH)

Stamp duty = ($500K x 0.03)-5400 =$9,600 (can use cpf to pay)

5% cash (hdb), inclusive of $5,000 as deposit & OTP payment.

2nd property:

- Presently you must keep minimum sum(OA+SA)=$117,000 in these accounts, any amount in excess can be used to purchase Pty(only OA can be activated)

- Start from 2013 July, this amount will be raised to $134,000

5% cash + 15% cpf(for Private)

[bepgof 20]

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?

[lonelycatz 0]

what is the 5% pay in cash??

[bepgof 20]

what is the 5% pay in cash??

For resale mkt, buyer must pay the 5% in term of CASH, no cpf.

Edited March 16, 2010 by bepgof

[kiddboy 0]

For resale mkt, buyer must pay the 5% in term of CASH, no cpf.

that only apply for bank loan but not hdb loan.

[bepgof 20]

that only apply for bank loan but not hdb loan.

HDB loan also requires holder to clear ALL in OA.

Edited March 20, 2010 by bepgof

[kiddboy 0]

HDB loan also requires holder to clear ALL in OA.

i meant pay 5% cash.

[bepgof 20]

i meant pay 5% cash.

For HDB loan, if u have sufficient $ in OA, then need not to pay in CASH.

Edited March 22, 2010 by bepgof

[purecat 0]

Hi All

Anyone know is it there a a minimum sum that we must set aside for our cpf acct for resale flat if we are using cpf to repay our hdb loan. I heard that cpf board will only allow us to withdraw cpf from our acct at lower of valuation price or purchase price. If we din have the minimum sum set aside inside our ordinary + special acct, we are unable to use cpf to repay our loan anymore. Anyone encounter that?

Hi i am not certain if i understand ur question correctly ?

1st 4 room is in Woodlands, 2nd 4room is in JE. Part of the sales proceeds of 1st flat will go back to CPF while 2nd flat we finance slowly using CPF (bank loan )

What happen in the past was we paid 20% ( last time downpayment was 20% ), bank loan can only borrow up to 80%. When you pay bank loan and interest using CPF, there is a CPF withdrawal limit, hence balance of loan you need to pay in cash.

We fully paid our loan for current 4 room flat in year 4 and yes we exceed the valuation price. Hence the excess are supposed to be paid in cash. However, we wrote in to HDB to appeal and since they see that our age are still quite young, they allowed us to use our CPF balance.

Edited April 2, 2010 by purecat

[Doomsday 0]

I'm quite sure you need to only keep half of minimum sum in ordinary and special account for 2nd property.

[purecat 0]

I'm quite sure you need to only keep half of minimum sum in ordinary and special account for 2nd property.

huh i tot author of thread is asking about current flat ?

[purecat 0]

Read up on this.

http://mycpf.cpf.gov.sg/CPF/my-Cpf/reach-55/Reach55-2.htm

Hence say if u draw a 30 yr loan for eg... and u still haven fully clear the loan but u hit the age where u need to set a minimum sum aside, you may have to start paying cash to finance your loan at an old age.

Alot do not know this. We do, hence even though interest rate in HDB loan is low, whenever possible, we clear our loan to reduce the principal amount which in turn reduces the interest. Our target is always to repay fully the loan as early as possible... so that we still have a flat even if we dont have a job.

Imagine losing a job at old age ( but before retiring ) and still havent clear your HDB loan . Where to find cash eh ?

Hence morale of story is also to find a flat within affordable means (depending on how much ur monthly salary can afford )

[berry05 0]

Hi, i dont mean to be rude, to side track abit ar, I check from CPF board if to buy 2nd pty and u still servicing 1st pty, the minimum balance in OA & SA is $61,500 and not $117K leh, also I always thought stamp fee must be pay in cash and not CPF. If can use CPF to pay stamp fee, it is really a load off our burden man, please correct me if I am wrong.

Thanks

Anyone know is it there a a minimum sum that we must set aside for our cpf acct for resale flat if we are using cpf to repay our hdb loan. I heard that cpf board will only allow us to withdraw cpf from our acct at lower of valuation price or purchase price. If we din have the minimum sum set aside inside our ordinary + special acct, we are unable to use cpf to repay our loan anymore. Anyone encounter that?

1st property:

OA amount can be activated = 120% of valuation price.

Example:

Valuation =$500K

COV=$10K (CASH)

Stamp duty = ($500K x 0.03)-5400 =$9,600 (can use cpf to pay)

5% cash (hdb), inclusive of $5,000 as deposit & OTP payment.

2nd property:

- Presently you must keep minimum sum(OA+SA)=$117,000 in these accounts, any amount in excess can be used to purchase Pty(only OA can be activated)

- Start from 2013 July, this amount will be raised to $134,000

5% cash + 15% cpf(for Private)