Search For Dream Home Turns Into Nightmare

[MaCe 3]

Search for dream home turns into nightmare

AFTER several failed attempts to get a new HDB flat, he was ready to give up and pay more for a private property.

Then, home-buyer Dave Tan had a stroke of luck - or so it seemed. He found a new five-room HDB flat at City View @ Boon Keng.

This is the second public housing project to be built and sold by private developers. Hoi Hup Sunway Development is the developer.

Even though it cost a whopping $675,000 - not cheap for a new HDB flat - Mr Tan was okay with the price.

But his happiness was short-lived.

The 30-year-old and his fiancee, who are getting married next year, found out that they may not be able to finance their new home.

PENALTY

They are having difficulties securing a home loan and may even have to pay a penalty to give up the flat.

The couple's combined income is about $6,000, said Mr Tan.

They put up an option fee of about $33,000 for the flat two months ago.

But the Housing Development Board (HDB) rejected their loan application for 90 per cent of the cost of the flat last month.

This is because Mr Tan's director's fee can't be used for credit assessment, and his fiancee didn't have the pre-requisite three months of continuous employment for the same company.

Mr Tan runs a serviced office business.

His fiancee quit her last job in February and started work as a personal assistant last month.

Upon appeal, HDB said they will be willing to give the couple a loan of about $150,000, but rest will have to be paid in cash and out of their CPF.

Mr Tan said: 'Where can I find so much money to pay for the flat?

'We were very happy when we managed to get the flat. But with this loan issue, I really doubt we can afford to get the place now.'

The 714-unit condo-like development will be ready only in2011.

Mr Tan said he and his fiancee had tried balloting for a new flat three times last year.

On two occasions, the flats they wanted were already taken up. On another occasion, they didn't get a chance to choose a unit because all were taken up.

Mr Tan said he had approached a few banks for loans, but the maximum they would lend was about $400,000, still about $270,000 shy of the purchase price.

To make matters worse, if he defaults on this flat purchase, he'll have to pay a penalty of about $8,000 to the developer. This is about 25 per cent of the option fee which he paid for the place.

'The developer said that since the sale didn't go through, we have to forfeit part of the option fee,' he said.

TEARS

'My girlfriend is so upset that she cried and lost so much sleep over the penalty. She said she has never lost so much money before in her life.'

The couple had borrowed the money to pay the option fee from their relatives.

A very frustrated Mr Tan thinks that it's unfair to be penalised because it wasn't a case of them not wanting to proceed with the deal.

Rather, they can't accept the deal now because of loan problems.

A spokesman for Hoi Hup said that in cases where the applicants do not meet the eligibility requirements for the flat, there will be a full refund of the option to purchase fee.

But if the withdrawal to buy the flat is due to other reasons, such as loan issues, the applicants face the prospect of forfeiting 25 per cent of their option fee.

The spokesman declined to comment on the above case and would only say they are reviewing MrTan's appeal to waive the penalty.

» HDB: Buy a flat within your means

Edited May 22, 2008 by MaCe

[tension_z 0]

this is .....

is there a way to check loan status before commiting on purchase? no right?

[MaCe 3]

this is .....

is there a way to check loan status before commiting on purchase? no right?

first thing first - they should check their own brains (couple in the news).

6k combined income buying a 600k house???

[raincole 0]

I tot should be able to check if able to get loan or not before committing.

But should be on the responsibilitiy of the buyer, not HDB or the developer to ensure they have the funds for "shopping" ma.

[Starscream 0]

If he can get away with a 25% loss on OTP let it be a cheap lesson learn. With regards to HDB living, there are still many more pitiful cases out there than theirs to begin with.

[lawry 3]

Snake swallow Elephant ...

[yokine9a 1]

Wah, 6K combined income buying 600K flat!!

Expensive houses like those in Boon Keng are not really meant for first owner who has no current flat to offset the diff.

Silly decision... Truly speaking, they are not alone... I have a colleague, not sure abt his combined income with the wife, currently living in a 4-room flat, planning to upgrade themselves to private condo liao.

All these people think that buying a house is an investment, can sell good price later...

[raincole 0]

So what did he lose? the option price 33k plus penalty or just the penalty of 8k?

[TYM 0]

$6K buy $600k, how to pay man? ... shake head ...

Even the income of ceiling $8k also cannot afford.

Edited May 22, 2008 by TYM

[yoongf 11]

So what did he lose? the option price 33k plus penalty or just the penalty of 8k?

Forfeit 25% of the $33K booking fee = $8+K

[Phantom 1]

8k should be possible to grant the loan. 2k short is alot.

[virgo2829 0]

i pity the couple.....

[phoenix 0]

I agree with another forummer that 8K penalty is a CHEAP lesson. Nextime, they will thank their lucky stars that this housing loan was rejected by the bank. And if losing 8K can cause one to lost sleep and cry, plus have to borrow option fee money from relatives to begin with....tsk tsk... what were they thinking. I think apparently not thinking hard enough.

Yes, no doubt that these new hdb flats at these premium areas are very expensive but nobody put a knife to your neck and ask you to purchase. U make your own choices you pay your own prices. If cannot get new hdb flat, whats wrong with a resale one? There are nice resale hdb flats around, also by pte developer and exterior look nicer then the usual HDB, comes with a slightly premium price too, but below 400K, although granted its not located at prime area like boon keng lah!

I think this is the problem with many (not all) Singaporeans. They try too hard to keep up with the joneses. Even if they have financial savvy friends to give them good financial advise, they may not be able to listen in also, but instead think that good advises are being sour grapes!

[Fifi 0]

or isit because of several failed attempt to get a flat and they just jump at this "chance"?

but in the first place, they shd check their finances coz getting a flat for marriage is only 1 of the few heavy spendings!!

they shd have calculate the estimated amt to pay each month even if they managed to get a loan.

think before committing...

[Cantona7 0]

Understand that guy is a director of his own firm, he maybe declare less earning but in actual fact he is getting more.