Options To Finance Cov + 20% Downpayment?

[neeravks 0]

Hi Guys,

I am a first time user of this forum.

I am planning to buy a house from the resale HDB market. I dont need an extravagant house, just a decent location and good standard of living.

I was planning my finances and one big problem I face is arranging the 20% Downpayment + COV

Since I plan to get a 3 ROOM Flat, i was hoping I can get one at (for eg) : 285000 (val) + 15 k COV.

The 20% Downpayment, COV, Stamp Duty,Legal Fees,Agent Fees comes out to around - 75000 SGD.

Add to this the renovation + furnishing cost and it would almost become 100,000 SGD.

For Renovation, as suggested by many people I plan to take a loan from maybe RHB for about 3 years.

But I was thinking whether there are any options which can help finance the 75000 SGD. Apart from Borrowing from family and friends what are the other options.

Personal Loans give only upto 30k.

I do have about 40 k SAVINGS,but want to use as little cash as possible.

Please advise.

[gohhuishi 0]

Hi Guys,

I am a first time user of this forum.

I am planning to buy a house from the resale HDB market. I dont need an extravagant house, just a decent location and good standard of living.

I was planning my finances and one big problem I face is arranging the 20% Downpayment + COV

Since I plan to get a 3 ROOM Flat, i was hoping I can get one at (for eg) : 285000 (val) + 15 k COV.

The 20% Downpayment, COV, Stamp Duty,Legal Fees,Agent Fees comes out to around - 75000 SGD.

Add to this the renovation + furnishing cost and it would almost become 100,000 SGD.

For Renovation, as suggested by many people I plan to take a loan from maybe RHB for about 3 years.

But I was thinking whether there are any options which can help finance the 75000 SGD. Apart from Borrowing from family and friends what are the other options.

Personal Loans give only upto 30k.

I do have about 40 k SAVINGS,but want to use as little cash as possible.

Please advise.

Just curious.. u dont have any CPF?

[neubie 2]

Hi Guys,

I am a first time user of this forum.

I am planning to buy a house from the resale HDB market. I dont need an extravagant house, just a decent location and good standard of living.

I was planning my finances and one big problem I face is arranging the 20% Downpayment + COV

Since I plan to get a 3 ROOM Flat, i was hoping I can get one at (for eg) : 285000 (val) + 15 k COV.

The 20% Downpayment, COV, Stamp Duty,Legal Fees,Agent Fees comes out to around - 75000 SGD.

Add to this the renovation + furnishing cost and it would almost become 100,000 SGD.

For Renovation, as suggested by many people I plan to take a loan from maybe RHB for about 3 years.

But I was thinking whether there are any options which can help finance the 75000 SGD. Apart from Borrowing from family and friends what are the other options.

Personal Loans give only upto 30k.

I do have about 40 k SAVINGS,but want to use as little cash as possible.

Please advise.

never use personal loans, the interests accrued is very high.

if u borrowing from bank, the 5% d/p must be done in cash, then the remaining 15% can be either cash or CPF. so u will save some cash component there and use it for somewhere else....

also some banks will subsidize legal fees which can oso be payable via CPF. tink stamp duty oso can use CPF.

so the only cash component is COV + 5% + reno which may see some savings....

btw, decent locations are never cheap.

[bepgof 20]

Hi Guys,

I am a first time user of this forum.

I am planning to buy a house from the resale HDB market. I dont need an extravagant house, just a decent location and good standard of living.

I was planning my finances and one big problem I face is arranging the 20% Downpayment + COV

Since I plan to get a 3 ROOM Flat, i was hoping I can get one at (for eg) : 285000 (val) + 15 k COV.

The 20% Downpayment, COV, Stamp Duty,Legal Fees,Agent Fees comes out to around - 75000 SGD.

Add to this the renovation + furnishing cost and it would almost become 100,000 SGD.

For Renovation, as suggested by many people I plan to take a loan from maybe RHB for about 3 years.

But I was thinking whether there are any options which can help finance the 75000 SGD. Apart from Borrowing from family and friends what are the other options.

Personal Loans give only upto 30k.

I do have about 40 k SAVINGS,but want to use as little cash as possible.

Please advise.

1. Work like cow

2. Save, bite bullet & fasten belt at waist

3. Wait long long

4. Go house viewing

Edited December 2, 2010 by bepgof

[gimz63251073 0]

yes...no cpf? cpf can be used to as downpayment.

Eligible for any grants? Also can use as downpayment.

if u do not have cpf, then it is really hard, 40k is really not enough, save up more. taking up personal loan to cover downpayment = commit suicide.

If u take loan for downpayment, unless its from parents which are interest free, u would have a difficult time paying off reno loan + downpayment loan.

[therat 18]

20% Downpayment - 5% cash, 15% CPF

COV - Cash

Stamp Duty - CPF

Legal Fees - If take HDB loan, legal fee is cheaper and can use CPF to pay

Agent Fees - Cash

[neeravks 0]

Thanks a lot guys for the replies.

Well yes..situation is slightly less comfortable. NO CPF. I became a PR just one year back.

also previously my wife didnt have a job. Also due to recession salary increase was freezed. Hence in my 2 years in Singapore wasnt able to save much.

But now, savings have increased, wife has got a job, my salary has increased. I have calculated that even if i take a personal loan for 3 years + a Home Loan for 30 years, my EMI for both would not go beyond 2000 SGD. I know my costs would increase eventually, but I am prepared for that.

Personal Loans i think are at an interest rate of 6%, Renovation Loan at abour 4-5%, Home Loan at about 1.5 % (currently).

Again I am a very optimistic person. and I think if I continue the growth in my career then I should be able to handle these debts myself.

I have zero debt right now, i dont party a lot, just spend money on buying clothes and good food. I know when I have kid/s my expenses will increase, but having a good house is also an priority and hence I am just working out my options.

[gimz63251073 0]

say flat = 285k

downpayment = 20% cash = 57k

agent fee = 1% = 2.8k

COV = 15k

Stamp duty = 3.8k (est)

Cash outlay = 78.6k.

no easy feat.... all this would only get u an empty old flat.

It may take many years before u can start accumulating savings again...very risky...

though risky, but sometimes in life

[cmc123 0]

Hi all,

Have a question on the amount that need loan from bank, anyone can help?

Is amount need loan from bank = val price - CPF used (include 15% down payment + stamp charge, etc.) - 5% cash down payment?

Thanks.

[bepgof 20]

Hi all,

Have a question on the amount that need loan from bank, anyone can help?

Is amount need loan from bank = val price - CPF used (include 15% down payment + stamp charge, etc.) - 5% cash down payment?

Thanks.

Put it this way:

1. You are only allowed to loan maximum of 80% x (Valuation), if you have no existing mortgage loan.

2. Need to set aside agent commission, usually at 1% of (Val +COV) + 7% GST = CASH

3. Need "extra" for stamp duty 3% x (Val +COV) -5,400 = cash or cpf.

4. COV need to pay by CASH

5. 5% x (Val ) = cash.

5-1. $1k to exchange for OTP. $4K for exercising OTP. So, need to pay 5%x(Val) -$5K = Cash.

6. 15% x (Val) = cash or cpf(OA)

7. Legal fee, usually bank provides legal subsidy which is able to cover the whole process. = $0

Build these into spreadsheet, will get immediate "result" you want.

Some corrections made on 5/12/10

Edited December 5, 2010 by bepgof

[chronograph 0]

Rule changed again?

My time, 5% cash part is only based on valuation price.

[chronograph 0]

Do u have any buffer if you lost your job?

Better put that in your financial planning as well.

[cmc123 0]

thanks all for the advise. I intend to use all my CPF so I only need to borrow min from the bank, plan to take loan from DSB, 1.99% fix 5 yr (more stable), after that then do refinancing.

Thank you

[neeravks 0]

Do u have any buffer if you lost your job?

Better put that in your financial planning as well.

Well...thats a scary prospect....and its scary whether or not i have a job or not...

but lets put it this way...

a 250 k LOAN LOAN without personal loan and i loose my job

a 250 k HOME LOAN + 30 k PERSONAL LOAN and i loose my job..

well i am f*** up in both cases....

but if i dont loose my job and continue working hard as i have all these 7 years...then I am sure..I would be even able to repay 500K loan....but i dont want to go that deep in debt...

when i started this topic...it was more to get a view from others...whether taking a personal loan for paying off the downpayment is a good idea....seems so..not many people do that....so maybe ill just discuss with my family and work out options....

[neeravks 0]

Put it this way:

1. You are only allowed to loan maximum of 80% x (Valuation +COV), if you have no existing mortgage loan.

2. Need to set aside agent commission, usually at 1% of (Val +COV) + 7% GST = CASH

3. Need "extra" for stamp duty 3% x (Val +COV) -5,400 = cash or cpf.

4. COV need to pay by CASH

5. 5% x (Val + COV) = cash.

5-1. $1k to exchange for OTP. $4K for exercising OTP. So, need to pay 5%x(Val +COV)-$5K = Cash.

6. 15% x (Val+COV) = cash or cpf(OA)

7. Legal fee, usually bank provides legal subsidy which is able to cover the whole process. = $0

Build these into spreadsheet, will get immediate "result" you want.

One correction..

1. You are only allowed to loan maximum of 80% x (Valuation), - COV is not counted by banks