View Question & Answers

Financial / Legal Matters

Search Just Ask

  • :
  • :

Ask a Question
Q

I would like to upgrade from my current flat to a condo. I was advised to purchase the condo first before selling off my flat to prevent the hassle of looking for a temporary lodging area. Is it risky to do so? and I have less than 100k cash would I be able to afford?

Total 2 Answers

  • A

  • Answered on 25 May, 2012 at 2:36PM

    Dear Jason,

    As you stated that you are currently having a HDB flat but you have less than 100k cash on hand, you may want to take note of the followings in your decision-making:

    ( The following points are made in the assumption that you have fulfilled the HDB MOP ( minimum occupation period ) ruling and you are eligible to sell your flat or buy a pte property. )

    1) Scenario (A) --- You are still servicing the mortgage loan for your current flat:

    Under the 14 Jan 2011 property cooling measures announced by MND, assuming you are a Singapore citizen ( otherwise if you are a PR, the latest ABSD ruling also applies for purchase of 2nd property ), the LTV for your 2nd property is 60% ( of the purchase price or valuation whichever is lower ) with at least 10% cash and balance 30% CPF.

    Assuming the condo is S$1mil, your cash on hand will not be sufficient for the cash component of the downpayment assuming you have at least S$300,000 ( usable ) in your CPF ordinary account for the balance cpf component of the downpayment.

    You also have to set aside for the legal fees and stamp duty ( about 3% ).

    2) Scenario (B) --- You have fully paid off your HDB flat:

    Under the 14 Jan 2011 ruling, the LTV is 80% comprising at least 5% cash and balance 15% CPF.

    3) Basically, selling your flat first will qualify you under scenario (b) situation in terms of the financing for the condo purchase.

    Nonetheless, besides the above-mentioned, there are quite a number of other important factors that you may like to consider before making your purchase as for most people, buying a condo is a big ticket item and you would want to get things right in a few critical areas before you take the plunge.

    I have written and posted a number of relevant articles in these areas in my blog and you may want to read more on them @ investmentpassivesutra.blogspot.com

    Best Regards,
    Edmund Lim
    Mobile: 93823222
    Email: edmundlim.sg@gmail.com
    Blog: investmentpassivesutra.blogspot.com Report Abuse
  • A

  • Answered on 25 May, 2012 at 1:26PM

    Hi Jason,

    If you are able to afford the down payment for the condo. yes you don't need a temporary lodging. There's many other factors which you need to take note also.

    Please drop me a call & we can further discuss regards to your question.

    Shuhandy OrangeTee
    +65 9776 9956 / shuhandy@orangetee.com Report Abuse

Post an Answer

Please login to answer this question