A Guide to the HDB Flat Portal for BTO Buyers

Planning your flat purchase is now easier with the new HDB Flat Portal – a one-stop platform for flat buyers to gather housing-related information and plan their housing budget. We break down the portal’s many useful features in this step-by-step guide on how you can use the HDB Flat Portal for your BTO application!

Work out your Flat Budget with the Budget Calculator

As with any big purchase, it’s good to start by working out your budget. This will help you shortlist suitable flats that you can afford, and here’s where the budget calculator on the HDB Flat Portal comes in handy! The budget calculator helps you calculate your housing budget by considering your CPF and/or cash savings, probable CPF housing grants, and amount of estimated housing loan from HDB or the FIs.

Step 1: Fill in your household and financial information

On the menu bar, select ‘Calculators’ followed by ‘Check My Budget’. Enter your available CPF and cash savings, household income, and flat that you intend to purchase. Based on the information, the type of housing grant and probable grant amounts will be shown. You can find out more about housing grants eligibility by clicking on the “Read more” link in the tooltip.

Step 2: Estimate housing loan amount from HDB or FIs

Next, if you are considering a housing loan, you can obtain from HDB and the FIs an estimate of the housing loan amount that you would be considered for. Start by selecting your financing option ie. housing loan estimates from HDB or the FIs.

Can’t decide between the two? You may compare the estimated loan amount, interest rate, monthly payment, total interest payment and conditions for each financing option. The calculator also provides a list of interest rates on housing loan packages from participating FIs. You may refer to this to indicate a preferred interest rate for the computation of the FI housing loan estimate.

Do note that the housing loan computation are estimates based on the information you have provided and does not constitute an actual approval for a housing loan from HDB or the FIs. You may wish to reach out to the FIs if you require clarification on your eligibility for a housing loan.

Step 3: Adjust loan amount and repayment period based on affordability

You can adjust the loan amount, repayment period or the FI interest rate to understand the differences in estimated monthly repayment and total interest payment for each combination. The loan amount will be adjusted accordingly, should there be insufficient funds required for downpayment for the flat purchase. Your estimated housing budget will appear at the top of the page.

Step 4: Understand the considerations when taking a housing loan from HDB or FI

There are various factors to consider when taking a housing loan. Understanding the terms and conditions of each loan options can help you make an informed decision before purchasing a flat.

With an estimated flat budget in mind, it’s time to look for a flat! Click on ‘Search for Flats’ under ‘Related Services’ at the bottom of the budget calculator. This will lead you to the ‘Finding a Flat’ page where the available flats within your computed budget would be populated. You can also access the page via the menu bar of the HDB Flat Portal.

Find a Flat on the HDB Flat Portal

The HDB Flat Portal lists current and upcoming BTO and SBF flats during sales launches and flats for open booking. In this article, we will focus on BTO and SBF flats.

Step 1: Search for flats based on your estimated budget

Search for the flats by location, price range, flat type, waiting time and other criteria. You can also import your estimated housing budget from the budget calculator into the maximum price search filter.

Step 2: Browse available flats

During a sales launch, a banner will appear on the HDB Flat Portal’s homepage. Clicking on this will lead to a page with information of the projects on offer.

Step 3: Shortlist and compare flats

Shortlisted several flats that you like but can’t quite decide yet? Click on the heart-shape button to save them to your favourite list for a side-by-side comparison later. You can add up to 10 homes to your favourite list for comparison.

For flat comparisons, click on ‘My Profile’ on the menu bar. Under “Your Favourite Homes”, select up to three listings and click ‘Compare Flats’ to compare their location, price, flat type, waiting time, remaining lease and floor range. Attributes that do not meet your saved search profile will be indicated with a red exclamation mark.

You can also compare the estimated cost and fees, loan amount, total interest payable, monthly repayment and more for the selected flats by clicking on the ‘Compare Payment Plan’ button. This will bring up the payment plan calculator. Simply fill in the missing information, scroll to the bottom and click on ‘Show Comparison’. Hop over to the next section for more information on the payment plan calculator.

Check your Flat’s Payment Plan with the Payment Plan Calculator

If you have a preferred flat in mind, use the payment plan calculator to understand the payments involved for the different milestones, and find out if you have sufficient funds to finance the flat purchase.

The calculator checks the price of the flat against your available funds, probable CPF housing grants and estimated housing loan amount from HDB or the FIs, to determine if you have sufficient funds for the intended flat purchase. It also shows a breakdown of the cash and CPF payments required at various milestones of your flat buying journey to help you plan ahead .

Step 1: Find out the estimated costs and fees for the intended flat

Enter details of the flat that you intend to purchase. The estimated costs and fees related to the flat purchase will be calculated and added to the price of the flat, to form your total amount payable. You may also view a detailed breakdown of the costs and fees.

Step 2: Receive housing loan estimates

Remember the budget calculator? This section will be pre-filled based on the information you have provided in the budget calculator (note that the fields will only be pre-filled when the same browser tab is used for computing figures on both calculators).

If the remaining lease of the flat does not cover you or your spouse till the age of 95, the estimated HDB housing loan amount and Enhanced CPF Housing Grant amount will be automatically pro-rated.

In the above scenario, you will be advised to visit the CPF Housing Usage Calculator to work out the estimated amount of CPF savings you can use to purchase the flat.

Step 3: Check the payments required at the various milestones

After deducting your estimated housing loan and available funds (CPF and cash savings) from the total amount payable, you will be shown a detailed breakdown on the amount of CPF and cash payment at different milestones.

The calculator will also alert you if you have insufficient funds for the flat purchase and show the amount of cash top-up required.

Apply for a Flat

During a sales launch, information on the BTO and SBF projects on offer will be available on their respective pages. These pages will also include a link to an online flat application form.

Step 1: Submit flat application

Click on the application link and submit your flat application before the closing date. For BTO and SBF sales launches, do note that applications are not processed on a first-come-first-served basis. HDB will check on your eligibility to buy a flat and determine your queue position to book a flat through a computer ballot.

Step 2: Receive notification for units on your Watchlist

If you are invited to book a flat, you can place your preferred flat on a watchlist to monitor their availability. You may choose to receive email notifications when any of the units on your watchlist are booked. The link to the watchlist module can be accessed through the project details page under ‘My Profile’.

Ready to apply for your flat? Hop over to the HDB Flat Portal now!

Source: mynicehome.gov.sg

Buying an HDB Flat? Here’s How to Decide Between HDB Loans and Bank Loans

HDB loans or bank loans? That’s probably what many first-time home owners are wondering, after deciding that they’re ready to take the plunge and buy an HDB flat. We’re here to break down the differences.

HDB Loan vs. Bank Loans:

• HDB loans require a smaller cash outlay
• Interest rates of bank loans are highly variable, whereas HDB loan rates have not changed much as they are pegged to the CPF rate
• Bank loans are currently more affordable than HDB loans, at the prevailing interest rate
• You can switch from an HDB loan to a bank loan, but not the other way around

Downpayment

A huge advantage of taking an HDB loan is that you are able to fork out a smaller amount of cash for your downpayment.

The maximum loan-to-value (LTV) ratio for HDB loans is 90%. So you can borrow up to 90% of your flat’s value or price, whichever is lower. For the remaining downpayment of 10%, you can use a combination of cash or your CPF OA savings.

On the other hand, the maximum LTV ratio for bank loans is 75%. This translates to an extra 15% in downpayment as compared to an HDB loan. What’s more, 5% must be paid in cash for the downpayment, with the remaining 20% to be paid in cash and/or CPF OA savings.

Interest rates and monthly instalments

The interest rate for HDB loans is fixed at 0.1% above the prevailing CPF rate. With the current CPF rate at 2.5%, the interest rate for HDB loans is 2.6% per annum.

In contrast, depending on market conditions, bank loan rates are more variable. This applies to loan packages that are pegged to fixed interest rates as well. After a lock-in period of 2 to 5 years, these so-called fixed rate home loans follow a floating rate.

So technically, there is no perpetual fixed rate home loan in Singapore.

Bank loan interest rates are mainly determined by these three floating rate benchmarks:

• Singapore Interbank Offered Rate (SIBOR), which will be replaced by Singapore Overnight Rate Average (SORA) by the end of 2024
• Board Rate (BR)
• Fixed Deposit Home Rate (FHR)

Whether you’re taking a SIBOR, SORA, BR or FHR home loan, the interest rate is the prevailing rate plus the bank’s spread.

So “3M SIBOR + 0.75” means the interest rate is the prevailing three-month SIBOR rate, plus 0.75% charged by the bank (the spread). Every three months, when the SIBOR rate changes, the interest rate will be changed to match the new rate.

This means that if you have a 1M SIBOR rate home loan, the loan repayment amount will change every month. If you have a 3M SIBOR rate home loan, the loan repayment amount will change every 3 months, and so forth.

Likewise, “BR + 0.5” means that the interest rate is the current board rate plus the bank’s spread of 0.5%. The difference is that the board rate is set entirely by the bank.

An FHR home loan is pegged to the bank’s fixed deposit rates, so it’s pretty similar to a BR home loan as the rate is essentially determined by the bank.

Why are bank loans more affordable?

The historical interest rate for bank home loans is between 3% to 4% per annum. This is more expensive than HDB loans.

However, due to the Global Financial Crisis in 2008, bank interest rates have remained low for around 10 years. Currently, bank loans are around 1.8% per annum, as opposed to HDB’s 2.6%.

The lower interest rates translate to lower monthly instalments

If the flat is priced at $350,000, the maximum loan quantum for an HDB loan, based on an LTV of 90%, is S$315,000 and downpayment is S$35,000. If you’re taking a 25-year loan tenure, the monthly repayments will be $1,429.

In contrast, if you’re taking a bank loan with an LTV of 75%, the loan quantum will be S$262,500. And the downpayment will be S$87,500.

On a 25-year loan tenure, assuming an interest rate of 1.8% per annum*, the monthly repayments will be cheaper at S$1,087.24.

*This is based on current, typical loan rates. We cannot assume that the bank interest rates will remain at this level over 25 years.

Income cap

Whether you’re buying a BTO or resale flat, HDB loans come with stricter eligibility criteria, including income ceiling. If your gross monthly household income is more than S$14,000, you won’t be eligible for an HDB loan.

Conversely, bank loans don’t have an income cap, so it’s suitable for those with a higher income.

Tenure

HDB loans are capped at 25 years, while bank loans for HDB flats have a longer maximum loan tenure of 30 years. (However, the LTV will be reduced to 55% if the loan tenure exceeds 25 years.) 

Having a longer tenure can be a good thing, as it allows you to lower your monthly repayments and spread it out. On the other hand, it also means paying a higher interest.

Refinancing

You can refinance your HDB loan into a bank loan (subject to the bank’s approval), even after getting the initial 90% LTV. By taking a home loan with a lower interest rate, you can reduce your monthly repayments.

However, you can’t refinance your bank loan into an HDB loan. What you can do is reprice it with the same bank or switch to another bank to refinance it.

Early repayment

Another good thing about HDB loans is that they don’t have an early repayment penalty. So you can pay it off earlier, such as through partial capital repayment to reduce your financial commitments.

But if you’re taking a bank loan, it’s better not to pay it off early. The bank will charge a prepayment fee if you cut short your bank loan within the lock-in period, since they earn from the interest.

Which is better?

If you’re on a tight budget, HDB loan should be considered first, as the cash outlay is smaller. The fixed interest rate also gives you a better idea of how much you’re paying monthly for your home loan. If you find the interest is too high, you can always refinance from an HDB loan to a bank loan later, but not the other way around.

If you intend to upgrade fast (e.g. sell the flat and buy a new home, such as a private property, as soon as you can), you may want to consider a bank loan, or quickly refinance into a bank loan from an HDB loan. This could reduce monthly repayments, and minimise the interest eating into any resale gains.

Speaking to a mortgage broker can also help you better understand more about suitable home loans.

Looking to embark on your home ownership journey? From the types of CPF housing grants to a guide on using the HDB Flat Portal to purchase your HDB flat, read here to find out more!

This article was adapted from 99.co, Singapore’s fastest growing property platform for information like resale HDBs for sale and rent in Singapore. Check out the original article here.

Source: mynicehome.gov.sg

What You Must Know About Applying for HDB Sale of Balance Flats (SBF)

While the Build-to-Order (BTO) exercise is the most common way for home buyers to purchase a new flat, there are other sales modes for them to consider – one of which is the Sale of Balance Flats (SBF) exercise.

SBF exercises are launched twice a year in May and November, usually together with BTO exercises. You will have to decide which mode you want to buy a flat through – you can only choose one during the same launch.

One of the main reasons why people choose to apply for SBF instead of BTO flats is the relatively shorter waiting time. As its name suggests, many of the flats sold under the SBF exercise are balance flats remaining from earlier BTO sales launches. These units are either undergoing construction, or already completed. While SBF is definitely an option to consider, here are some things to take note before you submit your application.

1. Flat Information Made Available During Sales Launch

SBF comprises a variety of flat types located across different estates. In the last SBF exercise in May 2021, popular estates like Bishan and Bukit Merah were included as well.

Information about the available flats is released during the sales launch. These include the flat type, location and number of units available. Home buyers have a week to make their decision – from selecting a flat to submitting the application for the SBF exercise.

2. Flat Leases Can Vary

While the vast majority of SBF units are new flats left over from previous sales launches, the selection also comprises older flats such as surplus flats from Selective En Bloc Redevelopment Scheme (SERS) projects, and flats repurchased by HDB from previous owners. You’ll need to consider the lease length when choosing to purchase a flat from the SBF exercise.

3. CPF Housing Grants Are Applicable
As with BTO flats, home buyers can enjoy CPF housing grants such as the Enhanced CPF Housing Grant (EHG) of up to $80,000 and the Step-Up CPF Housing Grant of up to $15,000, depending on eligibility. More details on CPF housing grants here.

4. Demand Has Seen an Increase

Application rates have remained high for SBF flats as the shorter waiting time makes them popular among buyers, so do keep that in mind when considering SBF over BTO. As there is usually a smaller number of SBF flats available as well, your chances of successfully applying for a flat will vary.

Should You Opt for SBF? 

The SBF exercise is a good option for home buyers looking to shorten the waiting time for a flat. This sales mode also offers more flexibility in terms of choice, thus suiting home buyers with specific housing needs. However, as SBF exercises are typically open twice a year, home buyers who are unable to wait may want to consider resale flats.

This article was adapted from 99.co, Singapore’s fastest growing property platform for information like resale HDBs for sale and rent in Singapore. Check out the original article here.

Source: mynicehome.gov.sg

A Single’s Guide to Buying an HDB Flat

Ready to purchase your own home? If you are single, 35 years old and older, you can purchase an HDB flat and may be eligible for housing grants. Here’s a comprehensive guide for singles looking to buy an HDB flat.

BTO Flat

A Build-To-Order (BTO) flat is priced lower than comparable resale flats in the same area, offering an affordable option for home buyers. Singles with a monthly income of $7,000 and below can apply for a 2-room Flexi flat in a non-mature estate, with a full 99-year lease. Depending on their monthly income, they can get up to $40,000 in CPF housing grants.

BTO flats are launched for sale every quarter. You can visit the HDB Flat Portal to check out the upcoming BTO projects and weigh your options. Find out how you can purchase a BTO flat with our step-by-step guide.

Resale Flat

Single Singaporeans aged 35 and above can also buy an HDB resale flat. There is a wide choice of flats with varying leases across towns. There are no income ceiling restriction except if you decide to get an HDB housing loan and/ or apply for CPF housing grants of up to $80,000.

Resale flats can be purchased anytime throughout the year. After finding the resale flat of your choice and negotiating the purchase price with the seller, you will only need to wait about 8 weeks from HDB’s acceptance of your resale application before collecting the keys to your new home.

You can choose to manage your transaction via the HDB Resale Portal or engage the services of an estate agent registered with the Council of Estate Agents.

Other Housing Options

Singles who wish to live on your own but have not met the minimum age criteria of 35 years old to purchase an HDB flat, have the option of renting from the open market. If you’re planning to do so, do take note of the following:

• Request the flat owner to show documentary proof that they own the flat, and HDB’s approval letter to rent out the flat or bedroom
• Refer to CEA’s templates when preparing your tenancy agreement and make sure that you fully understand all the terms and conditions
• Ensure that you are included as an authorised tenant

Source: mynicehome.gov.sg

A Guide to the HDB Resale Portal

HDB resale flat buyers and sellers can now use the new HDB Resale Portal, launched on 1 January 2018.

The HDB Resale Portal streamlines all the resale of flats processes into a single platform, and provides a step-by-step guide for flat buyers and sellers throughout the resale transaction.

Using the HDB Resale Portal will benefit you in many ways:

– Shortens resale transaction time by up to 8 weeks
– Reduces manual entry of personal information
– Integrates all resale-related services
– Reduces number of appointments with HDB (Only 1 appointment required!)

With this portal, you can get instant results on your eligibility to buy a flat, housing grants, and HDB concessionary housing loan. Other important information, such as the Ethnic Integration Policy quota, upgrading status, upgrading costs billing status, and recent resale flat transactions nearby, have also been included in the HDB Resale Portal.

Here are the key steps to guide you in using the resale portal.

1. Register intent to buy/ sell

You must first register your intent to buy or sell a flat on the HDB Resale Portal. Your personal particulars will be automatically retrieved and populated from the Government’s MyInfo service.

2. Search for a flat and get an Option to Purchase (OTP)

Once you have found a resale flat within your budget, you will need to obtain an OTP from the seller. You have 21 days to exercise the OTP.

3. Choose the mode of financing

As a flat buyer, you will need to decide how you intend to finance the flat purchase. You can either use cash, CPF savings, or obtain a housing loan. If you wish to obtain an HDB housing loan, the HDB Resale Portal will guide you to apply for an HDB Eligibility Letter.

4. Request value of flat from HDB

If you are financing the flat purchase with your CPF savings and/or housing loan, you are required to submit a request to HDB to confirm the loan quantum and the amount of CPF savings you can use. You will pay HDB a processing fee of $120 (including GST).

Flat buyers can only submit a Request for Valuation after the seller has granted them an OTP. They will need to submit the Page 1 of the OTP and Request for Valuation, to HDB by the next working day after the OTP date.

If HDB requires valuation of the flat to be done, HDB’s appointed valuer will carry out the flat inspection within 3 working days after informing the seller. Flat buyers can check the flat’s valuation in the HDB Resale Portal within 10 working days from the inspection date.

5. Submit resale application

Both flat buyers and sellers must submit their respective portions of the resale application with the supporting documents to the HDB Resale Portal, after the OTP has been exercised. They will need to pay an administrative fee, depending on the flat type.

HDB will verify the information and notify the buyers and sellers of the application outcome, typically within 8 weeks.

6. Acknowledge resale documents

HDB will compute and prepare the documents for buyers and sellers to endorse in the HDB Resale Portal. Both parties must endorse the documents within 6 days.

7. Pay resale fee

Flat buyers and sellers are required to pay online for the legal and stamp fees using the HDB Resale Portal.

8. Wait for HDB’s approval

HDB will inform flat buyers and sellers once the application has been approved. The approval letter will be available on the HDB Resale Portal.

9. Attend completion appointment

Flats buyers and sellers must attend the Completion Appointment at HDB Hub to complete the resale transaction.

In summary, here are the steps for flat buyers and sellers:

Source: mynicehome.gov.sg

My Resale Flat Journey: From West to East

The post ‘My Resale Journey From West to East’ appeared first on the MoneySmart blog

This article was updated on 25 May 2021.

Conversations around public housing usually revolve around affordability, value, and financing. Beyond the dollars and cents, it’s hard to get a tangible sense of what owning a flat means to people, and the significance of having a home to call their own.

We spoke to different homeowners, specifically those who had bought resale flats, to get their thoughts about their home and flat buying journey. In the first of our 3-part series, we speak to Mr Ismail, who has lived on both sides of the island.

About The Flat

Owner: Mr Ismail bin Hamid, 41, Married with 4 kids

MoneySmart (MS): Mr Ismail, this is an amazing looking house. Tell us a little bit about why you chose to buy a flat here.

Mr Ismail: Tampines has been my home for the past 7 years. This flat is located 2 blocks away from where I grew up in, so this is a neighbourhood I am very familiar with. In fact, one of my primary school classmates still lives in the next block with his own family!

When I was growing up, there was only Bedok Interchange. There was no Tampines Interchange, and the Downtown Line certainly didn’t exist at that time, so you can imagine that getting around was very different from how it is now.

MS: Tell us a bit about your housing journey.

Mr Ismail: After I got married, my wife and I moved to Bukit Batok, which was near her family. It was a very different area from where I grew up, so that was something new. We then moved to a resale flat in Bukit Panjang. With convenience and proximity to family being a key consideration, we decided not to wait for a suitable BTO flat. At that time, the only available BTO flats were in Sengkang and Punggol, so we chose to buy a resale flat.

Due to family circumstances, we eventually moved back to the East, a few streets away from where we are currently staying now.

MoneySmart Tip: Interested flat buyers can get information on upcoming BTO projects 3 months before sales exercises for better planning. In the meantime, you can visit HDB InfoWEB for details on the upcoming BTO sales exercise.

MS: We also understand that you moved from a 5-room to a 4-room flat?

Mr Ismail: We felt that it was a much better idea to move to a 4-room flat because there was a lot of unused space in our previous 5-room flat. Even though we have four kids (aged 12, 9, 8, and 3), we felt that this current place suits our needs perfectly.

As you can see, the amenities around this place are great for our kids. We also considered the fact that there was a park that was very accessible and our kids wouldn’t have to cross any major roads to get there.

At this point, Mr Ismail’s wife also chimes in, highlighting the fact that the 4-room flat is much easier to clean than their previous home. They also managed to completely pay off their housing loan after moving, but more on that later.

MS: Tell us about your home buying process. Did you engage an agent or do it on your own?

Mr Ismail: We decided to go with an agent, and the reason was that our housing agent was also my friend from reservist! He also helped us to sell our previous home. I would say when it comes to engaging an agent, it definitely helps to have someone who knows his stuff.

It was an easy decision to buy our current home because we knew what we wanted, and the opportunity presented itself. I would say our only regret is that we missed out on a flat that is near the newly built Our Tampines Hub. There was nothing there at that point in time and we had no idea they were going to build an integrated community hub there!

MoneySmart Tip: Besides going through an agent, buyers and sellers can use the HDB Resale Portal to perform their own resale transactions. The portal will guide you on the buying journey and help you track the progress of your transaction. The resale process takes approximately 8 weeks to complete from the date of HDB’s acceptance of the resale application.

MS: How did you plan your finances? What were your goals or considerations?

Mr Ismail: For me, I chose to pay off this flat fully. I know it might seem a little “old school”, but we believe that we should just keep our money in CPF and use that for retirement.

For our previous homes, we also chose to take a loan from HDB. My wife works in a bank, so we understand that there are benefits and risks to taking a bank loan, and we ultimately settled on getting an HDB loan. Now that we’ve paid off this flat, we don’t have to worry about a mortgage anymore, and we can focus on planning for retirement.

MS: And what sort of grants did you get for your home?

Mr Ismail: At the start when we got our first place after we got married, we were eligible for a grant for first time buyers, and of course we were aware that we could get $20,000 in Proximity Housing Grant for this flat as we were moving near my parents.

MS: Your home looks really nice and comfortable. Did you have to renovate it a lot, and how much did you spend?

Mr Ismail: We spent about $38,000 on our renovations. We did have to do quite a bit of work, which included your regular maintenance such as repainting the place and redoing the flooring and doors. The main issue with the place was that the wiring wasn’t done properly so we had to redo everything because they were crossed all over the place. The kitchen was also rather old so we gave it a refresh.

MoneySmart Tip: Figuring out what grants you are eligible for is an important part of planning for your home purchase. You can also get more information on financial planning for your home over at HDB’s InfoWEB.

MS: Can you share with us some thoughts around owning a home in Singapore?

Mr Ismail: For me, I never intended to buy a flat to profit from it. I plan to stay here with my wife till we pass on. Some people talk about leases expiring, but my perspective is that you are probably not even going to be alive when that lease expires, so why worry about it? As for my children, they will probably move out and buy a flat of their own, so I am not too worried about what happens with the lease.

There are many things that might change in the future which you have no idea about, so you plan for what you can. Other than that, I feel blessed to be able to say that I own a home, which is more than what many other people in other developed countries can say.

MS: Any other words of advice for homebuyers?

Mr Ismail: Go with what you are comfortable with. At the end of the day, you can overthink, but when you step into a neighbourhood, just ask yourself whether you feel like you belong there . Are you comfortable with the place and its surroundings? Is it a place you feel your children can grow up in?

Convenience is another factor. It might be more important for you to be near a supermarket than an MRT station. Whatever the case, understanding your needs is important. Small inconveniences can become a big deal over the course of a few years.

Source: mynicehome.gov.sg

My Resale Flat Journey: First Property is 30-Year Old Resale Flat

The post ‘My Resale Journey: First Property is a 30-Year Old Resale Flat’ appeared first on the MoneySmart blog

Mr Wong, 32, and his wife, Madam Lai, 31, are on the cusp of moving into a resale flat in Jurong West with their child, as well as Madam Lai’s brother and sister-in-law.

The couple’s 5-room flat has just been renovated, and they are now putting the finishing touches to their new home.

In this second part of a 3-part series in which we present the stories of resale flat buyers, we spoke with Mr Wong on his new home and the process he went through to purchase his resale flat.

About The Flat

Owner: Mr Wong Bin Hao, 32, married with 1 kid

When we visited Mr Wong’s flat at Jurong West Avenue 5, workmen were finishing up their final renovations.

But the flat already looked cosy and inviting, with a comfy couch and a pile of Hello Kitty cushions beckoning us as we entered.

MoneySmart (MS): Mr Wong, how did you and your wife decide to buy a flat in Jurong West?

My wife and I both work in the Jurong area. For a period of time, we rented in nearby neighbourhoods and moved around.

I have been living in Jurong West for about three to four years. I’ve always found this area quite lively and naturally, wanted to buy a home here.

MS: Besides the fact that it’s lively, what else about this place appealed to you?

My two-year-old kid goes to the childcare centre in this block. You can also see the playground from here so it’s perfect and convenient for us. There are some primary schools close by that my child can attend in the future.

There are also two malls nearby, Pioneer Mall and Gek Poh. When the future Jurong Region Line is up, we will be within walking distance to an MRT station, so I think it was worth the buy.

MS: You started out renting a flat. What made you decide to take the plunge and buy your own place?

For me, having that sense of ownership is important.

When you rent, you might need to move from time to time, like what happened to us in the past. I found it tiring to be moving from house to house every year or so.

Some landlords are also not prepared to accept tenants who keep different hours or lifestyles. At the start they may say everything is okay, then suddenly they become fussy and impose curfews on the tenants.

There are uncertainties when you rent a place with friends too – they may need to move elsewhere and you will need to find another flat mate.

When I rented a place, I had to pay the landlord rent in cash every month, and could not make use of my CPF savings. Now, I can pay my housing loan instalments using CPF, so I don’t really need to fork out cash. For all these reasons, I feel it is good to have my own flat.

MoneySmart Tip: You can use this service to work out an estimated financial plan for the purchase of a resale flat if you are taking an HDB loan.

MS: We understand that your flat is about 30 years old. Was its age a concern for you?

One reason why I bought a resale flat is that it is more spacious for my family. This flat is about 120 sqm and the kids have more space to run around. Sometimes my parents or my wife’s parents will visit. So it’s better to have more space.

We still have 69 years left on the lease which is good enough for us. Our children and future generations are likely to buy their own homes anyway, so we don’t need to worry about leaving this flat for them. As we are planning to use this flat as a home, I think it’s good enough. For the next generation, you don’t need to bother as the kids will buy their own homes.

Although this is an old estate, the area is well taken care of by the Town Council and HDB also carries out upgrading of the flats.

MoneySmart Tip: Use this online map service to get lease information, resale prices, and even season parking information for each housing block. You can filter through nearby amenities to see where to dine and shop.

MS: Do you see your flat as an investment?

When we were weighing the pros and cons of buying a 30-year-old flat compared to a newer one, we did think about this issue. However, we feel that a house is for the long-term and one that would see us through our old age. Instead of hoping to make a profit from moving houses, we would rather stay in one flat and finish paying our housing loan sooner, so that we can free up our finances for other things.

MS: How was the purchase process? Did you go through an agent or DIY?

We initially tried to DIY by using a property website, but later on we received calls from estate agents offering their services and we engaged an agent eventually. He asked us what sort of attributes we wanted in a flat, and helped us to look for suitable flats that were within our budget.

Everyone has different interests and needs, so it’s important to know what your own needs are, before you decide whether to engage an estate agent for your resale transaction.

MoneySmart Tip: We asked Mr Wong if he knows about HDB’s Resale Portal, and he says he doesn’t. The HDB Resale Portal could have guided him in the buying journey. It takes buyers and sellers through the buying and selling process in a step-by-step manner online and allows them to DIY their transaction if they choose not to engage an estate agent.

MS: How is your flat being financed?

We went for an HDB loan as we found it less complicated than going for a bank loan. For bank loans, the interest rate is a bit uncertain.

Although the HDB loan interest rate is currently higher than for bank loans, the difference is not that much after you do the math.

Initially we indicated that we wanted to settle the loan in 10 years. Then HDB called us to ask whether we wanted to reconsider. Based on our salary, they recommended an 18-year loan tenure so that we can buffer for things like employment changes or if we suddenly need cash for urgent reasons. They explained that we can make partial capital repayment or even redeem the loan earlier if our finances permit. We found the advice useful. My wife and I are planning to settle the loan earlier to incur less interest and save more for retirement.

MoneySmart Tip: Find out how you can make partial capital repayment or fully redeem your HDB loan and save on housing loan interest.

MS: Did you get to enjoy any grant?

We got the housing grant for first-time buyers, which was a really attractive sum. We initially set aside a bigger budget as we thought we would not be eligible for grants. So for us, getting the grant was a bonus.

MoneySmart Tip: Find out what grants you qualify for, so you can plan your finances for your new HDB home.

MS: How has the renovation process been like?

We spent about $35,000 on renovations, mainly for works in the kitchen and for furnishings around the house. This includes $16,000 paid to our contractor, who was flexible to work with.

We did not hire interior design firms as we found their prices quite high. Since we wanted to save money, we thought it was better to work directly with contractors. For example, the rewiring cost quoted by the contractor was cheaper than market rate!

MS: Any advice for aspiring homebuyers?

You don’t really need to look for flats with fanciful fittings, because you will probably have to do your own renovations anyway. For example, even if the flat comes with nice flooring, the colour of the tiles may be uneven after the previous flat owner has removed all their furniture. So you might still need to replace the floor tiles.

MoneySmartTip: Planning your renovations for your HDB flat? Know what’s important to note and familiarise yourself with the guidelines.

Source: mynicehome.gov.sg