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Acquiring property is a vast investment, so one should check out what these tips which Singaporean homeowners should consider before buying property, and learn from these experiences. Therefore, first time homeowners’, chances are they’ll feel both a little nervous and excited about taking the thrust.
1. CPF to pay for your monthly installments might not be the wisest choice
“Most residents use their CPF to pay for their monthly installments but this might not be the wisest choice to pay for your home. By using this to pay for your flat, you will need to return the whole amount and the extra 2.5 percent cost of compounded interest to your CPF account, upon selling it. By means that your cash will be tied up in your CPF account, with negligible liquidity.”
– Hao Ming, 28, purchased a 4-room BTO flat
2. How fast is the progress of your timeline
“When we first in progress viewing flats, things were moving extremely slow. We visualize about 9 units before we found and decided one that we liked much. Once that happened, the whole thing sped up greatly. We made an offer, which was recognized by the owner. After collecting our keys and categorization out the paperwork, we had a 6-month timeframe to register our marriage at the ROM.
For Singaporean residents who desire to have their wedding banquet and ROM synchronously, it will be bit tricky finding a hotel with vacancies, since banquet wait times stretch up to an whole year. Even if you are having your wedding banquet and ROM separately, it’s a bit stressful planning and preparing for your ROM with just 6 months to go.”
– Christina, 26, purchased a 5-room resale flat
3. How HDB grants work
“My partner leave her job when she was a month pregnant. We planned that until she gave birth, she wouldn’t look for another job. Because this agreed with us applying for our grants and flat, we supposed that this meant that we would be appropriate for the highest level of HDB grant since our whole household income comprised of my income alone.
Nevertheless, what we didn’t see was that HDB computes your income based on a 12-month period. Even though she was out of work when we applied for the HDB grant, they still took her previous month’s salary into deliberation. That meant we wound up getting considerably less in grant money.”
– Alex, 29, purchased a 5-room flat BTO flat
4. When purchasing resale flats on rental fees
“I was mindful that people who sell their flats classically request to stay on for an extra 3 months or so after the transaction is finished. However, I didn’t know that purchasers strike up a rental deal with their sellers and charge them a minimal fee for these 3 months. As of this, I lost out on a few thousand dollars’ cost of rental fees from my seller.”
– Chun Kiat, 31, purchased a 4-room resale flat
5. How crucial it is to budget for renovation costs
“When we pass on through all our finances in the arrangement phase, we didn’t consider the renovation costs. We supposed that the place we were buying was new, so we wouldn’t have to make adjustments that would cost a lot. Big mistake – the whole thing ended up being a lot more exclusive than we expected, and though we made many negotiations, we still overspent.”
– Joseph, 29, purchased a 4-room BTO flat
6. How you need to start working on your credit score before buying property
“I didn’t have a routine of using credit cards prior to acquiring my flat, and I didn’t know that this would make the bank see me as an “unknown risk”. As of this, I had a considerably lower loan quantum than what my other groups had, and even though I had primarily wanted to get a 5-room flat, I decided to settle down for a 4-room flat instead.
Lesson learnt – now I tell all my groups who are possibly buying houses to build up their credit score by using credit cards, so that they don’t face similar scenario as I did back then.”
– Jun Hao, 32, purchased a 4-room resale flat
7. How paying monthly instalments can quickly become burdensome
“I and my partner have a take-home pay that is indeed decent, so although our monthly CPF was not sufficient to cover our monthly instalments, we were assured that it wasn’t a problem complementing this with cash.
Unfortunately, soon after we procured our flat, my partner got injured and had to take an unpaid leave of absence from work. Throughout this period, our finances were strained, and I now comprehend why people say that you should only acquire a property which has monthly instalments that can be fully enclosed by your CPF.”
– Mei Qi, 30, purchased a 5-room resale flat