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

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!

 

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 3 – 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 9 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)