Source: The Straits Times, 28 Jan 2007
#1 Work out how much you can afford.
Upfront costs include a minimum 5 per cent cash down payment, legal fees of 0.5 to 1 per cent of the loan amount, an agent’s commission of 1 to 2 per cent of the purchase price and a stamp duty of up to about 3 per cent of the purchase price.
Total monthly debt servicing should not exceed 35 per cent of your gross monthly income.
Also take into account such ongoing expenses as property tax, fire insurance, mortgage insurance, and conservancy or maintenance tax.
#2 Choose a suitable home loan and get in-principle approval from your banker on the loan amount.
Decide based on your individual risk appetite and financial situations.
#3 Search for your dream home.
Check to see if approvals have been obtained for any additions or alterations done. Otherwise, the bank will only provide financing subject to the property being restored to its original condition.
#4 Ascertain the market value of the property.
The bank can provide an indicative value if you can provide some details of the property you want to buy.
#5 Appoint a lawyer to coordinate your purchase.
The lawyer will, among other things, conduct a bankruptcy search on the seller.
#6 Make an offer on the property to the seller.
You have to place an option fee of 1 to 10 per cent to make an offer.
#7 Formally apply for the loan.
Once it is approved, you will receive a letter of offer from the bank.
#8 Meet your lawyer.
Your lawyer will help you to exercise your option to buy and apply to the CPF Board for the use of funds for your purchase.Later on, he will go through the CPF, mortgage and other documents with you.
#9 Arrange for the bank’s valuers to carry out a formal valuation.
They will submit their valuation report to the lawyer and the bank.
#10 The lawyer will receive the funds from the bank and the CPF Board to complete the purchase.
Stamp duty and legal fees are payable at this stage. Now you just need to collect the key to your dream home.
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All Singapore citizens and companies can freely buy any type of private residential Property.
However, there are HDB and CPF restrictions that may affect you when you buy a private property.
For flats bought directly from HDB (including flats bought from the open market with CPF Housing Grant)
a) The flats lessees must satisfy the required occupation period for the flat before acquiring the private property
b) The flat lessees must continue to stay in the HDB flat after acquiring the private property.
For flats bought from the open market without CPF Housing Grant There is no need to satisfy the required occupation period for the flat before acquiring the private property.
However, the flat lessees must continue to stay in the HDB flat after acquiring the private property.
Foreigners or foreign companies can buy certain types of residential property. Check under Foreigners/Expatriates Corner
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