Guide To Purchase A House In Singapore

Well, when it's time for you to step into adulthood, to start planning for your future, and to start a family of your own soon. You start looking for houses in Singapore. However, you are swarmed with the negative comments by people around you telling you various horror stories that you can ever imagine, e.g.: the debts that you got yourself into after getting your first property in Singapore and the tedious process of getting a property in Singapore. 

Guide To Purchase A House In Singapore

The horror of getting into a debt with the bank for at least 2 decades of your life frightens you. You worry about not having enough money for yourself after paying for mortgage loan for your first property in Singapore. If that is the case, you can consider loan refinancing and review your housing loan options carefully. This article will guide you through the process of purchasing a house in Singapore.

1. The help of CPF

The first thought that comes to you when a suggestion of getting your first property in Singapore is the huge debt that you get yourself into. This seems normal to most people as it is a huge sum to deal with after all. However, do remember that you are allowed to use your CPF to make a monthly payment for your property in Singapore and this might help lessen your burden. In addition, most down payments for your property in Singapore will be covered when you use your CPF to make payment.

Not willing to have your CPF deducted to make a monthly payment for your property in Singapore? Fret not, you can opt for HDB loan if you are purchasing an HDB flat. The HDB loan allows it to cover up to 90% of the HDB flat price. The remaining 10% will then come from your CPF. 10% of the remaining HDB flat price coming from your CPF definitely sounds much better than having to pay monthly for your HDB by using your CPF.

2. Choose a house and go for the launch

Location plays an important role as well. You certainly do not want to spend 2 hours daily commuting to work. The same goes for your children’s school. Therefore, you should choose a condominium or apply for a BTO that is near to your workplace so you can save on transportation fares, and also you will have that extra 15 minutes before you prepare for work.

Normally, HDB will post any upcoming launch on the HDB website. Do check from time to time so you do not miss out on anything. You will be able to check out the details such as the location available and types of mini flat. Other than the location and types of units, the rest will have to wait until the next launch. 

In addition, checking out on all these details will allow you to shortlist the type of unit and location that you are interested in applying to as the application is only opened for a week. You do not want to make any rush decision on such an important thing.

3. Sales launch – HDB loan & down payment

If you meet the criteria of applying for a BTO flat, you can now move on to applying for a HDB home loan. In order to be eligible for securing a HDB home loan, these are the few criteria you need to meet. First of all, you are planning to apply for a HDB flat. Secondly, you must be a citizen of Singapore and aged 21 years and above. Your total monthly income should also be lesser than $12,000 or $18,000 if you are applying for a HDB flat for extended families. 

In addition, you must not own or previously owned any properties that are private in the past 30 months prior to the application of HDB loan. You must not have more than a hawker or market stall or industrial property or commercial property, unless you are working in the market or hawker stall yourself.  The total loan amount that will be approved depends on your joint income when your flat is ready.

As a rule of thumb, buy within your means and only what you can afford as you do not want to fall into financial debt. For example, you should not buy a flat that costs more than $300,000 if your monthly income is $5,000. It is suggested that you do not buy a flat with a price that cost more than your gross combined salary of 5 years, although most people would say that their salaries would have increased by then, there is still a risk involved.

4. Schemes available

As for the Additional Housing Grant (AHG), it is a scheme that aims to help Singaporeans with lower income to purchase their first flat with grant ranging from $5,000 to $40,000, subject to the buyer’s income as well. To qualify for an AHG grant, your household income should not exceed $5,000 per month, for a period of 12 months before your application for the flat.

There are also other schemes available such as the Special Housing Grant (SHG) that you can check out on HDB website.

5. Wait patiently for your house to be ready

Once your house is ready, you will then need to start spending money on renovations. Finding and hiring the right HDB interior design Singapore company should be the next thing you should do since inexpensive HDB flats don't usually have outstanding interiors.  You used to think spending $100 on a beautiful ceiling fan is stupid and the worst decision ever. But guess what? You start thinking that it is necessary. The aesthetic value makes you think the ceiling fan is worth it. 

You realize that all the furniture matters and it is necessary to splurge on all those things that you once thought were stupid and a waste of money. Therefore, to prevent yourself from getting caught in the middle of wanting more but not having sufficient money for them, start saving in advance and plan your budget wisely. That will definitely save you a lot of time and a renovation loan with high interest.

In a nutshell, buying a property in Singapore is not so of a nightmare if you plan ahead and do your budget wisely. Moreover, getting a property in Singapore is definitely going to worth your money, time, and effort in the future. However, do your research first before getting buying a property in Singapore. If you are planning to get a BTO, you can read the step by step guide to buying your first BTO flat.