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99.co guides: Everything to know about paying for a resale flat

September 20, 2016
Fret not, knowing what, and when to pay for the resale flat you desire doesn't have to be difficult

Fret not, knowing what, and when to pay for the resale flat you desire doesn’t have to be difficult

Resale flats are back in vogue.

Since the government’s implementation of property cooling measures, cash-over-valuation (COV) has been effectively eradicated, and property buyers are flocking back to purchasing resale flats once more.

But while COVs are out, it doesn’t automatically mean a resale flat is the best bet for you financially; you still need to make sure that your purchase is one that you can afford on your budget.

To help you determine that, we’ve come up with a little cheat sheet so you can see what your financial obligations will be like when buying a resale flat, and when they kick in!

A step-to-step guide to paying for your resale flat

A step-to-step guide to paying for your resale flat

 

Fee payable / stage purchase Approximate timeframe % purchase price / fees payable

Source of funds

Grant of option 

(Booking fee)

$1 – $1,000

Cash

Valuation fee

1 / 2 – room flat

$140.40

– room and bigger

$199.25

Credit card

(If via e-resale service)

or

GIRO

(If via estate agent toolkit)

Deposit

Within 21 days*

$4,000 – $4,999**

Cash

Application fee Within timeline agreed between parties 1 / 2 – room flat
$40
3– room and bigger$80

Credit card

(If via e-resale service)

or

GIRO

(If via estate agent toolkit)

Initial payment (HDB loan) + using CPF to pay for initial payment

~ 6 – 8 weeks

(at first appointment)

10% of purchase price CPF

Initial payment

(if taking bank loan)

~ 6 – 8 weeks

(at first appointment)^

20% of purchase price^^ 5% cash + 15% CPF/cash

Stamp duty on option

1st $180,000
1%

2nd $180,000
2%

Remainder of purchase price
3%
Cash/CPF

Stamp duty on mortgage

0.4% of loan∈

Cash/CPF

Additional Buyer’s Stamp Duty (ABSD)Ω

5% of purchase price OR market valuation (whichever is higher)

Cash/CPF

Conveyancing legal fees Conveyancing legal feesΨ

1ST $30,000
13.50 cents per $100 or part thereof 

2ND $30,000
10.80 cents per $100 or part thereof

Remainder of purchase price
cents per $100 or part thereof

Cash/CPF

Legal fees†
~ $2,300

Cash/CPF

Caveat registration fees Buyer’s caveat††
$64.45
Mortgagee’s caveat‡
$64.45
Cash/CPF
Registration feesΦ Lease in-escrow
$38.30Mortgage in-escrow
$38.30

Cash/CPF

Title search fees» $10.40

Cash/CPF

Cash-over-valuation Valuation less purchase price Cash
Initial payment (HDB loan + cash to make inital payment) ~ 6 – 10 weeks 10% of purchase price Cash
Home protection scheme« Dependant on gender, loan amount, type and duration.

Calculator available here

Cash/CPF

Fire insurance ~ $1.50 – $7.50 for 5 years Cheque

Balance of purchase price

Purchase price less initial payment, option fee & deposit

 

Loan / CPF/ Cash

* Or within timeline agreed in Option

** Booking fee + deposit cannot exceed $5,000 in total

Payment timing dependant on bank’s payment schedule

^^ Based on an 80% loan ceiling

∈ Subject to maximum cap of $500

Ω Only applicable to Singapore Permanent Resident households

Ψ Payable if HDB solicitors are acting for you. Same rate applies for both transfer and mortgage. Subject to GST.

† Payable if external solicitors are acting for you

†† Payable if HDB solicitors are acting for you

‡ Payable only if you take a loan from HDB

Φ Payable if you take a loan from HDB, and are using HDB’s solicitors to act for you

» Does not apply if you take a bank loan and have external solicitors act for you

« Payable only if you intend to use your CPF to service your monthly loans

HDB Resale Flat (HDB Loan) (Illustration)

Let’s take the example of newlywed couple David and Anna, who are both Singapore Citizens in their early 20s.

They are first-timer applicants with a combined income of $6,000/month looking to purchase a 3-Room Resale Flat, with a purchase price of $400,000. They have $20,000 in their CPF accounts, and find that they qualify for a Family Grant totaling $30,000.

According to the Valuation Report, the flat is valued at $400,000, so no COV is payable.

They will be financing their purchase with an HDB Loan which will cover up to 90% of the purchase price, for a term of 25 years, and have been asked to pay $1000 as a Booking Fee for the Option. They also intend to service their loan instalments using their CPF.

Fee payable / Stage purchase

% purchase price / fees payable Source of funds

Grant of option

(Booking fee)

 $1,000

Cash

Valuation fee

$199.25

Credit card

Deposit $4,000

Cash

Application fee

$80

Credit card

Initial payment $40,000

CPF

Stamp duty on option

$6,600 Cash/CPF

Stamp duty on mortgage

$500

Cash/CPF

Conveyancing fees

$1,009.01

($405.53 + $603.48)

Cash/CPF

Lease in-escrow registration fees

$38.30

Cash/CPF

Mortgage in-escrow registration fees

$38.30

Cash/CPF

Caveat registration fees

$128.90

Cash/CPF

Title search fees

$10.40

Cash/CPF

Home protection scheme $241.56

(Yearly premium)

Cash/CPF

Fire insurance $4.50

Cheque

Balance of purchase price

$355,000

Loan/CPF/Cash

Total

$408,850.22

Assuming they wish to utilise the entire HDB loan, here’s what their financial obligation would look like:  

HDB Loan                 : $355,000

CPF                             : $50,000

Cash                           : $3,850.22 ($408, 850.22 – $50,000 – $355,000)

*HDB loan will wipe out CPF Savings first, then finance the balance

HDB Resale Flat (Bank Loan) (Illustration)

Now let’s see how the finances work out if David and Anna decide to get a loan from a bank instead.

Since this is their first and only loan, they would be entitled to a bank loan covering 80 percent of their total purchase price. They have also decided to go with external lawyers to help them through the transaction, and will be paying them $2500 for their services.

Fee payable / Stage purchase

% purchase price / fees payable

Source of funds

Grant of option

(Booking fee)

$1,000

Cash

Valuation fee

$199.25

Credit card

Deposit

$4,000

Cash

Application fee

$80

Credit card

Initial payment

$20,000 (Cash) $45,000(CPF)

$15,000 (Cash)

5% cash +

15% CPF / Cash

Stamp duty on option

$6,600

Cash

Stamp duty on mortgage

$500

Cash

Legal fees

$2,500

Cash

Home protection scheme

$241.56

(Yearly premium)

Cash/CPF

Balance of purchase price

$315,000

Loan

Total

$410,120.81

Here’s what their financial obligation would look like:  

Bank Loan                 : $315,000

CPF                               : $50,000

Cash                              : $45,120.81 ($410,120.81 – $315,000 – $50,000)

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