View Full Version : First property - EC or BTO 5RM?
CondoSeeker2012
05-12-12, 15:16
Hi all,
As a newly married couple purchasing their first property. Which would you go for?
An OCR EC 3RM($1m) or a BTO 5RM($0.5m)?
Property in question:
Citylife@Tampines VS Jan 2013 BTO
The following conditions to consider:
1) Buying to invest, staying with parents
2) Combined income $7k
3) Currently no children, planning to have in 1-2 years
4) No car loan, not planning to buy car
5) No other loan commitments, not planning to have
6) Low interest rates leading into near future
7) Uncertain global outlook
8) OCR Non-landed private property index overtook RCR
9) HDB Resale index comparatively stable, uptrend
10) Larger quantum = More profit
11) Larger quantum = More risk, more interest to pay if rates go north
Pros of EC:
1) Government 30k CPF grant + Deferred Payment Scheme makes it easy to commit to large quantum purchase for first timer
2) Good location of Citylife@Tampines
Pros of BTO 5RM:
1) Largest quantum of BTO series
2) Heavily subsidised sale price represents large differential of >$100k of nearby 5RM comparables means instant paper-profit upon purchase. My capital appreciation calculation of x%P.A. starts from comparable price and not purchase price.
FYI we have e-apped for Citylife, perhaps when pricing is released, the decision would be easier to make. Appreciate advice from great masters here, hope to hear and learn from you please. I am a young member, benefited from this forum but still much more to learn from you.
Thanks! :)
ikan bilis
05-12-12, 15:19
1) Buying to invest, staying with parents
ummm..... buy private condo lah.... :( :beats-me-man:
is the downpayment for EC and BTO 20% as well for first property?
Hi all,
As a newly married couple purchasing their first property. Which would you go for?
An OCR EC 3RM($1m) or a BTO 5RM($0.5m)?
Thanks! :)Always start with traditional HDB
CondoSeeker2012
05-12-12, 15:21
ummm..... buy private condo lah.... :( :beats-me-man:
no money for downpayment :(
ikan bilis
05-12-12, 15:22
is the downpayment for EC and BTO 20% as well for first property?
EC normally got DPS.... think 5% can liow... but later still got to come out to 20% when TOP... loan max 80%...
CondoSeeker2012
05-12-12, 15:23
is the downpayment for EC and BTO 20% as well for first property?
yes but BTO can be 10% if taking HDB loan
ikan bilis
05-12-12, 15:24
no money for downpayment :(
be nice and sweet talk to parents, and PIL... ;)
CondoSeeker2012
05-12-12, 15:24
Always start with traditional HDB
Thanks for replying! Can I ask why please?
is the initial cash outlay any different for both ?
Thanks for replying! Can I ask why please?lower cash outlay. slowly build up your cash and then after MOP, buy pte.
CondoSeeker2012
05-12-12, 15:26
be nice and sweet talk to parents, and PIL... ;)
Parents will never agree. Want us to stand on own two feet and be down to earth.
Agree with them also, want to do it ourselves. Precious lessons to be learnt will be missed if we take shortcuts I feel. Just my 2 cents, no offence to others who have done so here. Different folks different strokes. =)
what are the main characteristics of HDB Loan? is the interest rate lower ?
yes but BTO can be 10% if taking HDB loan
5rm BTO, lower quantum.
can buy another PC later on
when u save enough $$$:cool:
what is the initial outlay for traditional HDB?
lower cash outlay. slowly build up your cash and then after MOP, buy pte.
FamilyGuy72
05-12-12, 15:33
Yes with the price gap between EC & PC narrowing, it doesn't really look as attractive as before considering all the restrictions that comes with it.
phantom_opera
05-12-12, 15:33
I would get the best location, does not matter EC or HDB
For 1st property, its always good to start with something affordable, affordable in the sense that you could easily afford the monthly mortgage with just CPF and set aside at lease 30% of your cash income as saving..
If you start on the wrong foot, e,g over stretching yourself, it will take a very long time for you to save enough to buy your investment property.
Just remember that your home is not an investment, its a consumption, so the more you consume the less you have for saving.
be nice and sweet talk to parents, and PIL... ;)
Ai Yoh .. You think everyone is a YOWETAN wannabe meh :doh:
For 1st property, its always good to start with something affordable, affordable in the sense that you could easily afford the monthly mortgage with just CPF and set aside at lease 30% of your cash income as saving..
If you start on the wrong foot, e,g over stretching yourself, it will take a very long time for you to safe enough to buy your investment property.
Just remember that your home is not an investment, its a consumption, so the more you consume the less you have for saving.
this is correct. my view is that the first house must be as cheap as possible. faster save up for 2nd ppty. that was how i planned my strategy 2 years after graduation, and after meeting a senior who was pro at investment.
my suggestion - get a 3 room or max 4 room flat with good location and/or amenities. aim to finish MOP. then get a PC either for stay or investment. in the meantime, pray no CM on MOP.
but you are young. got time on your side. one day you will see the lifting of all the CMs FOR SURE. dunno when. make sure when that happens, you got moola to enter the market.
buttercarp
05-12-12, 15:54
For 1st property, its always good to start with something affordable, affordable in the sense that you could easily afford the monthly mortgage with just CPF and set aside at lease 30% of your cash income as saving..
If you start on the wrong foot, e,g over stretching yourself, it will take a very long time for you to save enough to buy your investment property.
Just remember that your home is not an investment, its a consumption, so the more you consume the less you have for saving.
Yup agree with Ringo!
I would go for the BTO.
Combined monthly $7k - to buy a 1mil home is over- stretching unless you got someone to pay for your deposit.
BTO ... Goverment gift ma. I want also cannot.:doh:
Isn't it risky for a young couple earning 7K combined per mth getting a $1M EC?
proud owner
05-12-12, 16:06
go for the BTO..
once you go straight into EC or PC ... you lose the ONLY thing that you ever get from this govt thats subsidized
Go for bto with a good location. Pay the premium is fine.
1m ec will eat away at least 1k of your income per month for loan interest based on current interest rate. Imagine if current interest rate is doubled or triple within the 8 years you have to hold e ec, e amount will be 2k n 3k per month.
There are quite a few bto in non-punggol area. Worth taking a look.
Even 2nd timers manage to get a unit at bendemeer light.
I would go for EC. Citylife looks great, you enjoy full condo facilities and still get the grant. Value will usually go up after 5 or 10 years when it becomes privatised. I don't know what your job is, but normally your salary should also rise in 4 years time when you have to pay the full P+I for the whole loan quantum.
wat for go for 1 mil EC....be realistic....after marriage and wen kids come along, u will face the stress, and if ur wife stops work to look after them, ur life will be v tough......Last time EC is half price....now is ridiculous price....buy a hdb and accumulate ur wealth for future purchase
If u can get a very good unit for the BTO, then go for it.
I think location shall carry more weight.
The other consideration, be it BTO or EC, the mortagage payment will kick in much later, and your earning capacity is also bigger.
You should have applied for Nov's BTO Compassvale mast next to Sengkang mrt. Jan's 2013 BTO location all not really that good.
http://www101.hdb.gov.sg/hdbvsf/eampu11p.nsf/0/12NOVBTOSK_page_8931/$file/12NOVBTOSK_map.htm
http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyingNewFlatFlatsonOffer?OpenDocument
Isn't it risky for a young couple earning 7K combined per mth getting a $1M EC?
It is very risky indeed, especially when we do not know what will happen in the near future. Yes, your salary may increase as your career progresses, but on the other hand, there are too many 'what-ifs': retrenchment, health issues, spouse has to stop work to look after the kids etc. It is better to live within your means.
There is a word says, "No risk, no gain". there is always a risk..it depends how you manage it.
bro, combined income $7k ... of course HDB la!
limbei got $300k ,also don't dare touch condo!
:scared-5::scared-5:
get govt grant buy 2 bedder ec:D
Allthepies
05-12-12, 20:36
bro, combined income $7k ... of course HDB la!
limbei got $300k ,also don't dare touch condo!
:scared-5::scared-5:
300K should be good enuff to buy a good 2+S in suburb with good rental yield
bro, combined income $7k ... of course HDB la!
limbei got $300k ,also don't dare touch condo!
:scared-5::scared-5:
wah.. people 7k/mth, even if eat air also can only save 84k/mth incl CPF. your 300k... wah biang. you money laundering?
wah.. people 7k/mth, even if eat air also can only save 84k/mth incl CPF. your 300k... wah biang. you money laundering?
..................
me is do own business :scared-5::ashamed1::ashamed1:
so, income can up & down lor :cheers5:
BTO in e west, best is if u r working n have parents staying in e west.
Sleepyhead
05-12-12, 21:44
I actually think your first property should be the biggest and the best you can afford.
Reason being:
1. you are still young, your earnings will increase many fold in the near future (unlike when you're older, and have reached the peak of your earnings, that is when you should buy smaller). Loan installments that seem big proportion of your earnings now will seem small in the coming years as your earnings grow.
2. being young, you have little commitments. Kids, elderly parents, cars, high insurance costs, topping up pension, medical expenses, expensive shopping and holiday habits, keeping up with the jones', etc... all those will eat away your earnings in your later years... so, with little commitment, you can afford to spend more on property.
3. with inflation and rising house prices, you are unlikely to be able to get this big and this good at this price ever again. unless market really moves in your favour, which of course has happened, but like i said, unlikely.
Just my :2cents:
bakasa2002
05-12-12, 21:50
I agree that location is most impt than ec or bto. Make sure u maximize yr first timer advantage and I think u do get a grant for either one. I personally think citylife has good potential and if a 3br at 11xx sf is likely to be <$900k is quite worthwhile. If that is too high and a 2br at 7xxsqf is good enough for u, it will likely be below 700k.
This is likely to be one of the better ec location u will get due to proximity near the town central, malls and mrt. I suspect nx yr gls will have some plots release near citylife as they have quite a few plots earmarked for high rise residential.
Cyberknight
05-12-12, 22:07
Thanks for replying! Can I ask why please?
HDB is a citizen entitlement. Always get it. In e event one cannot pay e monthly installment, how many cases have we heard HDB repossessing the unit?
Very few. The last publicized case, hdb took 10years before repossessing the unit.
And if you have fully repaid the hdb. Even if you are declare bankrupt for whatever reason. The banks and creditors cannot go after your hdb, you still have a roof to stay.
And if you are going to invest, go for dual key EC units. Stay one to fulfill the MOP, rent out the other unit for cash floe.
I would suggest go for HDB first, assuming you are still in yr 20s. Place more focus and effort on your family and career building first and don't stress yrself unnecessarily with heavy mortgage loans. Once you are more established in your career, you can then confidently chiong for PCs.
Both EC and BTO are ok as you enjoy 10-15% discount off the market selling prices... so you get to enjoy both the subsidies. EC implied subsidy will defintely be higher as its applied on S$1m instead of $500k. And dont assume that if you get HDB, you can buy a PC to stay and rent out HDB in future.. rules may change so dont bet on it
From the subsidy standpoint, EC is defintely better
HOWEVER, u mentioned your combined income is S$7k... this will change my recommendation to you to get a BTO instead...
To the TS, my vote is for EC.
buttercarp
06-12-12, 07:44
HOWEVER, u mentioned your combined income is S$7k... this will change my recommendation to you to get a BTO instead...
Yup, wise words!
Btw if his combined income is $7k per month and gets the 1 mil EC, will the bank lend him 800K, assuming he takes the max LTV?
If intention is for this to be the one and only property for you, buy EC.
If not, hoot BTO.
BTO in e west, best is if u r working n have parents staying in e west.
if got , i might consider la..
And if you have fully repaid the hdb. Even if you are declare bankrupt for whatever reason. The banks and creditors cannot go after your hdb, you still have a roof to stay.
bro, is this true? anywhere on HDB website is it stated?
Yup, wise words!
Btw if his combined income is $7k per month and gets the 1 mil EC, will the bank lend him 800K, assuming he takes the max LTV?
last i checked, bank DSR is max 50% for 80% LTV.
buttercarp
06-12-12, 08:23
last i checked, bank DSR is max 50% for 80% LTV.
http://www.standardchartered.com.sg/personal-banking/mortgages/learn-more/home-loan-glossary/sub/en/
Debt Service Ratio (DSR)
Debt Service Ratio is the ratio of debt over take home income, expressed in percentage. The lower the ratio, the healthier is your finances. Depending on the type of property, employment and income level, the loan will be rejected if the DSR is too high. The DSR recommended by the CPF Board is 35%.
http://www.standardchartered.com.sg/personal-banking/mortgages/learn-more/home-loan-glossary/sub/en/_images/forumula.gif
Can you tell me how to calculate, please :) ?
Take home income is per month or per annum?
TIA.
For 1mil ppty at 80% LTV, loan=800k. Assuming loan 30 years:
Interest rate | Instalment
1% | $2573
2% | $2957
4% | $3819
I personally think using DSR of gross income is more accurate than take home income, coz the diff goes to CPF which can be used to pay for the house.
50% DSR of 7k income = $3500
35% DSR of 7k income = $2450
from here it is obvious that if we flex for 4% interest rate, they have burst even the bank's aggressive DSR. so the loan will not go thru unless higher downpayment.
anyway for a couple with 2 kids, $3500 left for daily expenses is quite tight. assuming no car somemore. very tough lah.
unless they have high future income potential
Can you tell me how to calculate, please :) ?
Take home income is per month or per annum?
TIA.
a) Aggregate all monthly installments in cash i.e. car loans, housing loan nett of CPF contributions, reno loan, study loan, term loans etc
b) Take home income is nett of CPF contributions (includes rental income, dividend and other sources)
Take a) and divide it by b) and you get the DSR. :D
Parents will never agree. Want us to stand on own two feet and be down to earth.
Agree with them also, want to do it ourselves. Precious lessons to be learnt will be missed if we take shortcuts I feel. Just my 2 cents, no offence to others who have done so here. Different folks different strokes. =)
no info on how much money u have for down payment?
bakasa2002
06-12-12, 10:45
actually the age-range of the couple also quite impt in determine the risk profile and future income upside. ;)
ikan bilis
06-12-12, 12:26
For 1mil ppty at 80% LTV, loan=800k. Assuming loan 30 years:
Interest rate | Instalment
1% | $2573
2% | $2957
4% | $3819
I personally think using DSR of gross income is more accurate than take home income, coz the diff goes to CPF which can be used to pay for the house.
50% DSR of 7k income = $3500
35% DSR of 7k income = $2450
from here it is obvious that if we flex for 4% interest rate, they have burst even the bank's aggressive DSR. so the loan will not go thru unless higher downpayment.
anyway for a couple with 2 kids, $3500 left for daily expenses is quite tight. assuming no car somemore. very tough lah.
unless they have high future income potential
TS "1) Buying to invest, staying with parents"... so might have a condo or parent's hdb for rental... ;) :cheers4:
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