Condo - Down Payment

[pisces 0]

Hi,

If I were to buy a condo with a 10% loan from the bank. How much would I need to pay from Cash and CPF ?

I believe its like a minimum of 5% cash + 5% from CPF

Stamp duty - can use Cash or CPF ?

Are there any other fees ?

[aoiaoi 0]

Hi,

If I were to buy a condo with a 10% loan from the bank. How much would I need to pay from Cash and CPF ?

I believe its like a minimum of 5% cash + 5% from CPF

Stamp duty - can use Cash or CPF ?

Are there any other fees ?

You will have to pay 5% in cash and then another 15% in cash and/or CPF within the next 2 months of exercising the OTP. Depending on the condo you purchase, whether it's new (gonna TOP or still under construction) or resale, payment modes could vary. I think there are the usual progressive payment scheme (i.e. the normal payment where the buyer have to pay certain percentages upon the property being built to a certain stage) and the interest absorption scheme (which replaces the previous deferred payment scheme).

You mentioned getting a 10% loan from the bank. Meaning the remaining 90% will be from cash and/or CPF and proceeds from selling your existing property (if any)? Sale proceeds could take a while to be refunded to you though, so you may still need a bridging loan from the bank in the mean time in addition to the term loan from the bank. Or do you mean 10% of the 20% you intend to get from bank loan, meaning 5% cash and 5% CPF? Do take note that most banks are only willing to lend up to 80% of the valuation of your property and 90% could be difficult. Nevertheless, do get in principle approvals from a few banks first before you pay the 5% booking fee.

Stamp duty you have to pay in cash first. You can claim reimbursement from your CPF through your lawyer subsequently. Those should be the fees you have to pay for now. Upon TOP, you'll be asked to pay about 6 months of the property's maintenance fee and also the surveyor fee (depending on what is written in your sale & purchase agreement). Not long after, I believe your property tax from IRAS will also find its way to you....

Hope that helps.

[pisces 0]

Thank u.

I plan to buy a resale condo.

The other thing is that i expect the condo price to be funded through the bank loan. I have already checked with 1 bank and they are willing to offer a 90% loan.

if i understand correctly. i would have to pay the following in cash.

1. 5% of the condo price.

2. stamp duty - which can be later taken from CPF ?

For the remaing 5%, i should be able to use my CPF ?

Of course i wouldn't pay the initial 5% till i have the in princple approval.

[aoiaoi 0]

Thank u.

I plan to buy a resale condo.

The other thing is that i expect the condo price to be funded through the bank loan. I have already checked with 1 bank and they are willing to offer a 90% loan.

if i understand correctly. i would have to pay the following in cash.

1. 5% of the condo price.

2. stamp duty - which can be later taken from CPF ?

For the remaing 5%, i should be able to use my CPF ?

Of course i wouldn't pay the initial 5% till i have the in princple approval.

Generally you should be able to use your CPF to pay the 5% and also claim the stamp duty. But do note that there are conditions imposed by CPF. You must not be using your CPF to finance any existing housing loan either HDB or private property. Also, if you have an existing new HDB flat, you may be subject to the HDB 5 year rule. Do read the CPF and HDB faqs on their website for more info. Of course, you can always ask a property agent to be sure that you get your facts correct first before committing to a purchase.

[blackcar 0]

Thank u.

I plan to buy a resale condo.

The other thing is that i expect the condo price to be funded through the bank loan. I have already checked with 1 bank and they are willing to offer a 90% loan.

if i understand correctly. i would have to pay the following in cash.

1. 5% of the condo price.

2. stamp duty - which can be later taken from CPF ?

For the remaing 5%, i should be able to use my CPF ?

Of course i wouldn't pay the initial 5% till i have the in princple approval.

For purchase a resale condo here is the deal

1) 1% of the purchase price by cheque under the owner name. Ask yr agent to provides u document proof of the owner details. Yr agent will furnish u a copy of Offer to purchase.

2) Once the owner accept yr offer, yr agent will provides u a document called Option of Purchase. Another cheque is require of 4% of the purchase price.

3) Yr banker will get u a lawyer to coordinate the legal issues etc.

In sort, cash involved are 1% + 4% + Stamp Duty (u need to pay upfront but will reimburse after the deal is approved by CPF)

bal 15%(using CPF).

The above is based on 80% loan approval by the bank. For yr case is 1% + 4% + Stamp Duty (cash) and balance 5% by CPF.

Didnt know that now banks giving 90% loan of the property, early of this year for my case is 80%.

Hope this helps. Good luck!!!

[HDBurger 0]

For purchase a resale condo here is the deal

1) 1% of the purchase price by cheque under the owner name. Ask yr agent to provides u document proof of the owner details. Yr agent will furnish u a copy of Offer to purchase.

2) Once the owner accept yr offer, yr agent will provides u a document called Option of Purchase. Another cheque is require of 4% of the purchase price.

3) Yr banker will get u a lawyer to coordinate the legal issues etc.

In sort, cash involved are 1% + 4% + Stamp Duty (u need to pay upfront but will reimburse after the deal is approved by CPF)

bal 15%(using CPF).

The above is based on 80% loan approval by the bank. For yr case is 1% + 4% + Stamp Duty (cash) and balance 5% by CPF.

Didnt know that now banks giving 90% loan of the property, early of this year for my case is 80%.

Hope this helps. Good luck!!!

Well, one of the local bank (will not quote here, reputable and big in S'pore) is willing to loan 90% that i recently gotten approval. It's amazing and they are aggressive even though there's this credit crunch and every bank is tightening the credit. In a way this bank is also taking a risk so i pay more in terms of interest. Also they assess your credit history and if you are credit pink of health, i think they are willing to loan you. Some banks (Foreign and some locals) are kia-si, dont even approve at all. these banks, can forget about my business next time...

[Phantom 1]

Investors think that it's good to have a bank to give 90% loan to valuation. The last laugh is actually with the bank.

Imagine (Real Life)

1) When interest rates pick up later. You realize that you almost can't move to another bank because alot of banks can't value your property to do a refinancing. Hence you are stuck with high interest rates.

2) 90% LTV are always with a higher interest as compared to below 80%. With higher interest rates, your monthly installments will be higher.

Think Twice about getting a high LTV mortgage unless you have the capability to pay off part of the loan at some point in the coming years.

Stamp Duty is factored at 3% of purchase price - $5400

[nirvana 0]

For cash wise, you might want to put aside some extra on paying legal fee (can try to subsidy from bank) as well as mortgage insurance.

By the way, can we use CPF for mortgage insurance?

[shingirl 0]

i like to check something:

let's say i declare my income low.......... therefore the bank may only grant me a loan of $40 due to my declared income. (example figure)

i bought a house at $100 and valued at $100.

i intend to take a loan for $60 only, the rest of the 40% i will pay by cash/cpf.

will the bank loan me $60 since it's only 60% loan?

[therat 18]

i like to check something:

let's say i declare my income low.......... therefore the bank may only grant me a loan of $40 due to my declared income. (example figure)

i bought a house at $100 and valued at $100.

i intend to take a loan for $60 only, the rest of the 40% i will pay by cash/cpf.

will the bank loan me $60 since it's only 60% loan?

If the bank only grant u a loan of $40, it mean the bank will only lent u max $40. regardless is 60% loan or 20% loan

[Phantom 1]

Therat,

That's not exactly true. Technically what you say is correct but based on the lending guidelines, what shingirl mentioned is possible.

Example:

To keep it short, assume that after all my liabilties, based on my nett income flow, the bank says that I can borrow say $400,000.00 Loan Quantum.

Typically, the credit guidelines are based on debt servicing ratio (DSR).

On the other hand, I want to take a loan of 60% of the property. Which is 500,000.00.

In this case it is possible because based on the lending guidelines, the risk to the bank is minimal and they could grant. This is an established lending guideline for some banks.

[Phantom 1]

For cash wise, you might want to put aside some extra on paying legal fee (can try to subsidy from bank) as well as mortgage insurance.

By the way, can we use CPF for mortgage insurance?

1) Depends on the legal fee subsidy and the legal fee cost. Its common that lawyers charge higher fees just because there is subsidy. At the same time, some law firms might practice under the table cash back to banker or agent. etc.

2) mortgage insurance : are you talking abt private mortgage insurance? thats cash only. Fire insurance thats cash too..

[shingirl 0]

hi,

now i have found my unit. =)

next step.... bank loan............ now im not so concern about being approved or not approved.

There are so many packages in the different bank, im more concern with the difference between them.

So should i walk-in every bank and find out more?

or i can just call then bank up and ask?

[pisces 0]

hi,

now i have found my unit. =)

next step.... bank loan............ now im not so concern about being approved or not approved.

There are so many packages in the different bank, im more concern with the difference between them.

So should i walk-in every bank and find out more?

or i can just call then bank up and ask?

Lucky you ...found the unit already. Congratulations.

I have been looking for so long..still can't get what i need.

Back to the question - You can just call up the banks and ask. They will even give you approximations on the monthly installments based on your amount and loan tenor. Ask them to email it to you. Don't be afraid to ask questions and approach as many banks as possible to get the best deal.

Edited May 25, 2009 by pisces

[pisces 0]

Investors think that it's good to have a bank to give 90% loan to valuation. The last laugh is actually with the bank.

Imagine (Real Life)

1) When interest rates pick up later. You realize that you almost can't move to another bank because alot of banks can't value your property to do a refinancing. Hence you are stuck with high interest rates.

2) 90% LTV are always with a higher interest as compared to below 80%. With higher interest rates, your monthly installments will be higher.

Think Twice about getting a high LTV mortgage unless you have the capability to pay off part of the loan at some point in the coming years.

Stamp Duty is factored at 3% of purchase price - $5400

Phantom, as long as we take a bank loan , the bank ARE gonna have the last laugh. The banks have only to benefit unless we default and the price of the property decreases....like the US sub prime crisis.

I do not exactly understand your point 1. Why can't i refinance and why can't banks value the porperty ? I am assuming the refinancing option after lock in is over. Appreciate if you could shed some light on your opinion.

Edited May 25, 2009 by pisces