Options To Finance Cov + 20% Downpayment?

[chronograph 0]

I'm not in favour of personal loan.

Have u consider to put buying on hold till u have enough in your CPF to pay for the 20%. Since both are working, it should be easy to accumulate

enough in 2 years time. By then, u should have even more cash for other means, COV, reno, family planning, saving net etc.

[neeravks 0]

I'm not in favour of personal loan.

Have u consider to put buying on hold till u have enough in your CPF to pay for the 20%. Since both are working, it should be easy to accumulate

enough in 2 years time. By then, u should have even more cash for other means, COV, reno, family planning, saving net etc.

I have considered that too..

say I postpone my buying plan to about 18-24 months...I continue to pay rent for this period..which is anywhere between 1800-2000 for a simple 2+1....

then after 2 yrs i buy....i dont know what the home loans rate wil be then,what the COV will be...how much will be avaluation of a simple 2 bedroom flat...

the cost advantage is huge...

i would prefer paying off my own debt...to make something my own...

rather than pay somebody for something which will not be mine....

also for CPF usage..i can use CPF to pay off the monthly instalments....so though i dont have much in CPF right now....i will offset it by using less cash in monthly installments...

[forgotten 1]

I understand your view that if you are going to pay for rent, why not use that amount of rent to own a house instead?

It's dangerous to stretch ourselves too much in our financial commitment. Like what the other forumers mentioned, what if we lose our jobs? Also, too much financial stress can strain a marriage. The top reason for divorces in Singapore is not affair, it is money.

Have you ever thought of reducing your expense on renovation (25K)? How about finding a resale unit with move-in condition? You can do the fanciful renovation stuff to your unit few years later when you have more savings. This will remove your need to take up a renovation loan if you die die have to take a personal loan to pay the COV, 20% downpayment etc.

My hubby and I only spent a total of 4K on our house painting, furniture and electric applicances, then we moved into it.

Edited December 5, 2010 by forgotten

[neeravks 0]

I understand your view that if you are going to pay for rent, why not use that amount of rent to own a house instead?

It's dangerous to stretch ourselves too much in our financial commitment. Like what the other forumers mentioned, what if we lose our jobs? Also, too much financial stress can strain a marriage. The top reason for divorces in Singapore is not affair, it is money.

Have you ever thought of reducing your expense on renovation (25K)? How about finding a resale unit with move-in condition? You can do the fanciful renovation stuff to your unit few years later when you have more savings. This will remove your need to take up a renovation loan if you die die have to take a personal loan to pay the COV, 20% downpayment etc.

My hubby and I only spent a total of 4K on our house painting, furniture and electric applicances, then we moved into it.

yes thats very much on the mind.....hoping against hope if i get a decent move-in kinda house....with low COV....nothing like it....will not spend much on renovation now..

[therat 18]

yes thats very much on the mind.....hoping against hope if i get a decent move-in kinda house....with low COV....nothing like it....will not spend much on renovation now..

Just an information ,

If you come across a unit which is just finish Lift upgrading.

Make sure the invoice has bill to the seller.

Don't assume lift in use and invoice has bill.

PR don't have any subsidy for Lift upgrading. If pay thru' CPF by installment. Interest is market rate.

[chronograph 0]

Garment has been implementing new rules trying to bring down HDB prices, it might just be good to adopt a wait and see.

However, with that kind of rent u r paying, i would say go ahead and buy as long as u have consider all areas. But no personal loan, try borrow from your parent/relatives.

I have considered that too..

say I postpone my buying plan to about 18-24 months...I continue to pay rent for this period..which is anywhere between 1800-2000 for a simple 2+1....

then after 2 yrs i buy....i dont know what the home loans rate wil be then,what the COV will be...how much will be avaluation of a simple 2 bedroom flat...

the cost advantage is huge...

i would prefer paying off my own debt...to make something my own...

rather than pay somebody for something which will not be mine....

also for CPF usage..i can use CPF to pay off the monthly instalments....so though i dont have much in CPF right now....i will offset it by using less cash in monthly installments...

[neeravks 0]

Garment has been implementing new rules trying to bring down HDB prices, it might just be good to adopt a wait and see.

However, with that kind of rent u r paying, i would say go ahead and buy as long as u have consider all areas. But no personal loan, try borrow from your parent/relatives.

hmm....even i do not prefer personal loans....but more so i do not prefer taking loans from parents, relatives (in india)

i have some investments back in india...which are earning me around 10% per annum....

is it wise to sell them off and then use for buying this house...

or take a personal loan at 6-8%...

[gimz63251073 0]

well, most would be screwed when they lose their jobs. Its just a matter of how screwed up thats all.

Downpayment, as the word goes, is meant to be a "safety buffer" for consumers to ensure they do not overborrow. Hence it goes without saying that borrowing for downpayment = overborrowing.

Over commitment to a liability like a house can effectively shape your next 20years of life. Too many people slog for a flat...have to put up with unreasonable boss and colleagues, be unhappy at work for more than 8hrs a day, etc... all this nonsense for a flat. Lives are short, why put yourself through this...

It would also be very stressful financially when a kid comes along and u might find urself borrowing more and more and dragging your loan repayment longer. All in all, u would have NIL savings to tide u over when you have an emergency.

Lastly, what are the chances of another major recession or crisis in the next 5 years? My view is that it is at least 80%.

[neeravks 0]

well, most would be screwed when they lose their jobs. Its just a matter of how screwed up thats all.

Downpayment, as the word goes, is meant to be a "safety buffer" for consumers to ensure they do not overborrow. Hence it goes without saying that borrowing for downpayment = overborrowing.

Over commitment to a liability like a house can effectively shape your next 20years of life. Too many people slog for a flat...have to put up with unreasonable boss and colleagues, be unhappy at work for more than 8hrs a day, etc... all this nonsense for a flat. Lives are short, why put yourself through this...

It would also be very stressful financially when a kid comes along and u might find urself borrowing more and more and dragging your loan repayment longer. All in all, u would have NIL savings to tide u over when you have an emergency.

Lastly, what are the chances of another major recession or crisis in the next 5 years? My view is that it is at least 80%.

I do agree that downpayment is meant to be a safety buffer for people not to borrow. But i dont agree, that there is much difference....borrowing for 80% of a 300,000 or borrowing for 90% of 300,000...more over i think the rules just change last year so that people would have to shell out 20% cash.

Well anyways...i think its a very complicated situation...with loan rates at all time low.....COV + Valuation at almost all time high (coming down ever so slightly) + demand still outstripping supply + economy i.e salaries are on the way up

so lot of opposite things happening...

so its best to decide on a case by case basis....i am of the view...if one is confident of taking risks...take it...but calculate all sides of and then jump into it..with full effort...

in my case...i am trying to get some money here and there from friends..and hoping they would let me repay when i have the money...

[gimz63251073 0]

I do agree that downpayment is meant to be a safety buffer for people not to borrow. But i dont agree, that there is much difference....borrowing for 80% of a 300,000 or borrowing for 90% of 300,000...more over i think the rules just change last year so that people would have to shell out 20% cash.

Well anyways...i think its a very complicated situation...with loan rates at all time low.....COV + Valuation at almost all time high (coming down ever so slightly) + demand still outstripping supply + economy i.e salaries are on the way up

so lot of opposite things happening...

so its best to decide on a case by case basis....i am of the view...if one is confident of taking risks...take it...but calculate all sides of and then jump into it..with full effort...

in my case...i am trying to get some money here and there from friends..and hoping they would let me repay when i have the money...

borrowing up to 90% is largely for HDB, which is a result of their policy of selling at market rate. No issue for them as its just left pocket to right pocket.

but in buying a home, i always believe that we should not take too much risks. Home is for staying, a shelter that you can stay in no matter what happens.

Many Singaporeans actually do have a buffer in their CPF to cover periods if they unfortunately get unemployed. Even HDB reposssess flats, im sure banks will not hesitate to do whatever it takes to protect their own interests.

Everybody's risk tolerance is different, i would not even consider a 500k flat even if i rake in 10k per mth. While many DBSS are sold at well above 500k. Primarily because i view housing as a liability rather than value enhancing asset, i.e. not something i can encash to enjoy.

At the end of the day, u will have to decide what you slogging for and whether it is worth slogging for.

[skyflyer54 0]

Maybe you can consider to sublet(rent) out your common room to off load after getting your house. But the best is save up more before getting one and really must set a buffer saving for youself, in case you become jobless etc.