Most people have a problem when it comes to the dollars and cents of purchasing a property. With the myriad of rules and regulations to protect the consumer, it is often confusing to navigate this straits.
Before we explore the numbers, the first and foremost thing a buyer must remember is to buy for the long term. Don't get caught up with the euphoria of the moment or what Alan Greenspan, the former US Federal Reserve Chairman, called it "Irrational Exuberance".
Secondly, the buyer must buy within his means. No point stretching to the last dollar and face foreclosure when the chips are down. If the buyer is conservative, he/she may live to tell the tale another day.
Situation as of July 15, 2011
In Singapore, to purchase a resale private property, the buyer needs to pay 1% as deposit when he/she receives the Option to Purchase from the owner. Within 14 days, he/she needs to exercise the Option and pay another 4% cash and 15% from his/her CPF. If the CPF is insufficient, then the 15% may be cash in full or part cash, part CPF. In this case, we are assuming that the buyer will get 80% loan from the bank. To qualify for this 80% loan, it should be his/her first residential home loan.
If the buyer has 1 or more existing residential property loan, the banks will lend only 60%.
In addition, the buyer should park aside 3% (roughly) of his/her CPF (or in cash if CPF is insufficient) for the stamp duty and lawyer's fee.
With this, Happy Buying!
Note : Do check with your home loan officer for the details as different banks may have different requirements and the requirements change often. When using our website, readers agree that we provide no warranty and readers agree to indemnify us from any harm/loss incurred.