View Full Version : Home loan queries
linchong84
02-08-09, 22:41
Hi,
Will like to seek the help of experts here for 2 questions:
(1) When applying for a home loan for a private condo, do banks consider both me and my girlfriend's combined earning power or only mine? (we are only planning to get married/ROM only 2 years later, so at the time of applying for the loan, our status will still be single)
(2) I calculated roughly a $700k loan for a condo will mean around loan payment of $2,800/mth. Can my girlfriend's and my CPF be utilised to pay this monthly loan amount or we can only use cash to pay the bank? If can use cpf, how much is the max we can use per month?
Advance thanks for your kind advices!
Alan
1. Need not bother with marital status. Up to 3 co-owner could take up the share of the condo either joint tenancy or in common. NOTE: No doubt both of your earning income could be taken into consideration BUT it vice versa, if your girlfriend have a credit card debt of 100K, it will be taken as liability as well, regardless if she make 20,000 per month. Combine Income = Combine Liability. Above mentioned is not applicable for CPF related or company purchase.
2. Yes. Non-related singles could jointly use their CPF to service their jointly purchase private property provided they are not using CPF for any other property. The max you & your girlfriend could use is up to the max of your OA contribution amount per month. Less when your RA kick in.
Hi Alan, why dont you get married now? It will save some trouble for non-related single to jointly purchase property.
Hi,
Will like to seek the help of experts here for 2 questions:
(1) When applying for a home loan for a private condo, do banks consider both me and my girlfriend's combined earning power or only mine? (we are only planning to get married/ROM only 2 years later, so at the time of applying for the loan, our status will still be single)
(2) I calculated roughly a $700k loan for a condo will mean around loan payment of $2,800/mth. Can my girlfriend's and my CPF be utilised to pay this monthly loan amount or we can only use cash to pay the bank? If can use cpf, how much is the max we can use per month?
Advance thanks for your kind advices!
Alan
Hi,
Will like to seek the help of experts here for 2 questions:
(1) When applying for a home loan for a private condo, do banks consider both me and my girlfriend's combined earning power or only mine? (we are only planning to get married/ROM only 2 years later, so at the time of applying for the loan, our status will still be single)
(2) I calculated roughly a $700k loan for a condo will mean around loan payment of $2,800/mth. Can my girlfriend's and my CPF be utilised to pay this monthly loan amount or we can only use cash to pay the bank? If can use cpf, how much is the max we can use per month?
Advance thanks for your kind advices!
Alan
quick reply..
1) yes, combine or single applicant is up to both of u.. of cos if combine the pty will be joint name right?
2) iirc can wipe out everything in the cpf sans medisave portion .. but best dbl check with others or cpf
quick reply..
1) yes, combine or single applicant is up to both of u.. of cos if combine the pty will be joint name right?
2) iirc can wipe out everything in the cpf sans medisave portion .. but best dbl check with others or cpf
I believe SA cannot be used for housing, correct?
I think he needs to talk to a banker. He sounds too young to borrow 700k and the assumption that interest rate stays at 2% over 30 years is too risky. Forgive me if this is not the case.
I think he needs to talk to a banker. He sounds too young to borrow 700k and the assumption that interest rate stays at 2% over 30 years is too risky. Forgive me if this is not the case.
Thats not his question though.
But what a nice samaritan you are. :)
I believe SA cannot be used for housing, correct?
SA cannot use for housing loan
linchong84
03-08-09, 14:32
I think he needs to talk to a banker. He sounds too young to borrow 700k and the assumption that interest rate stays at 2% over 30 years is too risky. Forgive me if this is not the case.
Definitely will talk to a banker eventually. Just getting some rough sensing and basic calculation first. Thanks.
What difference, married or unmarried? If he is taking his time to sort out his relationship proper rather than purchase a property in those hollywood style marriages.
Anyway it's combined income.
i thought the use of CPF for purchase of housing can only be granted if there is some relationship? i.e. spouse, siblings, parents/sons, etc?
i did ask this question before and the banker told me cannot when i wanted to share a unit with my cousin. if i had wanted to, got to get my parents and her parents and then show that both parents are related by using birth certs. i.e. nucleus.
i could be wrong cos in my context it would be my second property.
Ya u can buy condo with a non related person and upon meeting lawyer he will ask both of u how many % u two each wish to own the house, as for HDB only related one can combine buying a flat.
And Alan, for your case, u and your GF need to have around $8000 combine income to loan 700k but WITHOUT any bad debt and also no car loan and not black listed. The figure is base on my friend work in UOB told me and the loan term is 35 years. Hope the figure can help u do a better calculation. Actually no offence advise ah, why dun u buy a 1st hand HDB since u plan to get married 2 yrs later? after u live there 5 yrs then sell the HDB and make some money by the time the profit from the HDB can help u pay more capital on the condo and of coz this must hope the market that time condo price is not as crazy as Centro at AMK like that anyhow kill people.
linchong84
04-08-09, 22:48
Cos we already exceed hdb income ceiling with no chance for appeal...
So new hdb can't buy, resale we not very interested...
What is the best deal you have from various banks? Just curious whether bank loan interest rates have gone up? Heard DBS no longer offering 1.99% fixed rate locked for 3 years and 2.5% fixed rate locked for 5 years? What about Maybank?
Cos we already exceed hdb income ceiling with no chance for appeal...
So new hdb can't buy, resale we not very interested...
Cos we already exceed hdb income ceiling with no chance for appeal...
So new hdb can't buy, resale we not very interested...
The sandwiched class...good luck bro. First house buy condo is going to be a stretch...especially both of u still have wedding/kids coming in the future.
Do note kids going to private nusury/kindergarten will cost u >$500 per mth. Things only get better when he/she starts primary 1.
Buy condo stretch only if they have combined income <$4k. With >$8k combined income, quite good already, that is why Gov don't allow such family to buy HDBs as they will push up HDB prices. Kids go full-time childcare has $300 rebate, so OK wah if you choose one that costs $800 per mth (before deducting rebate).
The sandwiched class...good luck bro. First house buy condo is going to be a stretch...especially both of u still have wedding/kids coming in the future.
Do note kids going to private nusury/kindergarten will cost u >$500 per mth. Things only get better when he/she starts primary 1.
Buy condo stretch only if they have combined income <$4k. With >$8k combined income, quite good already, that is why Gov don't allow such family to buy HDBs as they will push up HDB prices. Kids go full-time childcare has $300 rebate, so OK wah if you choose one that costs $800 per mth (before deducting rebate).
provided they only let the children go for childcare.
But most of them will let their child attend phonic, dancing, Speak and drama, etc etc etc
The sandwiched class...good luck bro. First house buy condo is going to be a stretch...especially both of u still have wedding/kids coming in the future.
Do note kids going to private nusury/kindergarten will cost u >$500 per mth. Things only get better when he/she starts primary 1.
i agree 8k-10k combined income, better not cheong pte and loan 700k.
resale or new hdb is a better option.
Expenses will only inc at a faster rate then your income once married.
think car, travel, wedding, reno, babies
8k less cpf 1.5k for both = 6.5k
6.5k less car, petrol, carpark etc = 5.5k
5.5k less give both side parents = 4.5k
4.5k less daily exp for both = 3.5k
loan 700k means after deduct cpf need pay cash 1.5 = 2k
2k less groceries, elect bills, insurance misc = 1k
1k less your condo maintenance = 0.7k
no need savings? no need babies? got baby, will get maid?
good luck if TS cheong pte with 700k loan with 8k income! :banghead:
head not so big better dont wear such a big hat lah, unless no car and no give parents $. no give $ to parents because wanna buy condo, then i think deserve to be shot! :hell-hath-no-fury: :tsk-tsk:
CPF has an income ceiling of $4500 for max contribution, ie if your income exceeds $4500, u will still contribute only 20% of $4500 with your employer contributing accordingly (can't remember wat is the % but u can chk CPF website). when this happens, only $1553 will be contributed to your a/c each mth. Of this depending on your age, only abt $900+ (ballpark figure) will go to your OA with the rest going to your SA and Medisave. U can only use the OA for your pty purchase. u can't touch the SA.
this means a total of about $1800 from both yours & your gf's CPF a/cs. u will have to top up in cash the shortfall of $1000 for your $2800 monthly instalment.
assuming u currently are not using your CPF to finance any pty, u can use up all your OA funds for the purchase. but if u are already using it to finance a pty and this is going to be the 2nd pty u will finance with your CPF, u must make sure u have a minimum balance of $58k from both OA & SA combined before u can touch the excess funds.
hope this is not too confusing for u. u can also check the CPF website for more info.
Yup, I do agree that those with combined income of $9k (assuming BF and GF each earning $4.5k per month) is the sandwiched class. Cannot buy new HDB, and pte condo will be too stretch when it comes to the monthly payment. High chance the newly wedded will have "no life" as after deducting all essential expenditure and a car, balance all goto monthly payment for the condo.
Not much $$$ left to go for holiday, shopping, etc... When baby comes, lagi siong.
Resale HDB is the better choice. Upgrade to condo when your child is just about to enter primary 1.
KarenK has given quite a comprehensive illustration liao mah ... the theory fr teddybear about the 4K vs. 8K thingy doesn't come quite clear to me leh ..
9K still not so bad lah ... perhaps it all depends all disposal & a couple's lifestyle ... for a mature couple who has paid off the first home (HDB), perhaps a loan of 700K+++ is still not so bad?
KarenK has given quite a comprehensive illustration liao mah ... the theory fr teddybear about the 4K vs. 8K thingy doesn't come quite clear to me leh ..
9K still not so bad lah ... perhaps it all depends all disposal & a couple's lifestyle ... for a mature couple who has paid off the first home (HDB), perhaps a loan of 700K+++ is still not so bad?
thanks for the compliments, heh heh. this is based on my recent personal experience so the memory is still quite fresh in my ageing mind..... :D
KarenK has given quite a comprehensive illustration liao mah ... the theory fr teddybear about the 4K vs. 8K thingy doesn't come quite clear to me leh ..
9K still not so bad lah ... perhaps it all depends all disposal & a couple's lifestyle ... for a mature couple who has paid off the first home (HDB), perhaps a loan of 700K+++ is still not so bad?
Actually a loan of $700k+++ less 20% downpayment is a good figure.
Which means HDB upgraders who had paid up their first home could possibly afford a home in the 700k to 900k range (before less 20% downpayment - using CPF and cash) without selling their existing HDB. If so, they can still live comfortably till TOP if both remain gainfully employed.
Yup ... best of both worlds ;)
Actually a loan of $700k+++ less 20% downpayment is a good figure.
Which means HDB upgraders who had paid up their first home could possibly afford a home in the 700k to 900k range (before less 20% downpayment - using CPF and cash) without selling their existing HDB. If so, they can still live comfortably till TOP if both remain gainfully employed.
Just to clarify, the amount going into your OA is 1035SGD max per month.
Not that it is going to make a significantly material difference to what you have already analysed. I thought I just want to point it out.
CPF has an income ceiling of $4500 for max contribution, ie if your income exceeds $4500, u will still contribute only 20% of $4500 with your employer contributing accordingly (can't remember wat is the % but u can chk CPF website). when this happens, only $1553 will be contributed to your a/c each mth. Of this depending on your age, only abt $900+ (ballpark figure) will go to your OA with the rest going to your SA and Medisave. U can only use the OA for your pty purchase. u can't touch the SA.
this means a total of about $1800 from both yours & your gf's CPF a/cs. u will have to top up in cash the shortfall of $1000 for your $2800 monthly instalment.
assuming u currently are not using your CPF to finance any pty, u can use up all your OA funds for the purchase. but if u are already using it to finance a pty and this is going to be the 2nd pty u will finance with your CPF, u must make sure u have a minimum balance of $58k from both OA & SA combined before u can touch the excess funds.
hope this is not too confusing for u. u can also check the CPF website for more info.
Just to clarify, the amount going into your OA is 1035SGD max per month.
Not that it is going to make a significantly material difference to what you have already analysed. I thought I just want to point it out.
Bro, how to get $1035 OA per month? From what I have seen, it is about $945 (excluding months where bonus is being paid).
Bro, how to get $1035 OA per month? From what I have seen, it is about $945 (excluding months where bonus is being paid).
depending on yr age. the older u r, the higher the pct of yr cpf contribution goes into yr special and medisave account, thus yr OA account gets lesser contribution.
DW's calcuation of $1035 is base on the max contribution to OA account by a relatively young income earner of $4500 and above.
depending on yr age. the older u r, the higher the pct of yr cpf contribution goes into yr special and medisave account, thus yr OA account gets lesser contribution.
DW's calcuation of $1035 is base on the max contribution to OA account by a relatively young income earner of $4500 and above.
gotcha...tks. :)
see table a in this link on cpf allocation to OA, Special and Medisave account according to your age.
http://mycpf.cpf.gov.sg/Members/Gen-Info/Con-Rates/ContriRa.htm
DW has assumed that the person in question is below 35 years old and earning $4500 and above.:)
see table a in this link on cpf allocation to OA, Special and Medisave account according to your age.
http://mycpf.cpf.gov.sg/Members/Gen-Info/Con-Rates/ContriRa.htm
DW has assumed that the person in question is below 35 years old and earning $4500 and above.:)
exactly. the figures I quoted are based on my personal experience and I am in the >35yrs old category. also another point to note: if your Medisave balance has already hit the ceiling, whatever surplus contribution meant for Medisave will go to your SA and not your OA. sighz....:2cents:
Frankly, it's disturbing some times to see people who just jump into a property commitment without bothering to research on these info. It can be suicidal!:scared-1:
Banks usually will calculate your 'affordablity' in servicing your mortgage loan with a max of 35% of your monthly income. However, if you have many other commitments like an outstanding reno loan, study loan, car loan, over draft and etc, you can be sure that the mortgage loan amount they are willing to offer will be lowered.
On the other hand, if you have a very clean record (i.e. no loans and overdraft outstanding at all; good credit ratings - good repayment records), you will find that they are willing to provide more than 1 mortgage loan at 80% for each property if necessary. ;)
Bro, how to get $1035 OA per month? From what I have seen, it is about $945 (excluding months where bonus is being paid).
CPF max contribution amount is basedon SGD4500 cap.
Employer = 14.5%
Employee = 20%
Total = 34.5%
Therefore
(1) Total CPF contribution (max) allowable per month (Exc bonus) = 34.5% x 4500 = SGD1553.
(2) Of the 1553, 2/3 goes to the OA each month = 2/3 x 1553 = SGD1035.40
(3) The remaining 1/3 of the 1553 is split up between SA and MA.
You can easily verify (1), (2) and (3) by logging into CPF website using your SingPass.
I saw your comment on income levels and just want to share some views of mine. I appreciate this might be entirely related but just some of my personal views.
There has been quite a fair bit of argument that income levels (across the board) in Singapore has not really risen that much over the years but why has home affordability appear to have increase by such scale??
Following from your comment, here are my simple views. Assume some broad numbers:-
1. 80% of population stays in HDB.
2. 20% of population stays in private condos.
3. Of the 20%, 10% is in mass market (conservatively).
4. The remaining 10% is in mid to high end market.
I am seeing a lot of professionals and executives already hitting 4500SGD limit pretty easily, and a significant number of them achieves that within the 1st year of their career. That is, say, 26yrs old (for guys with NS) and 23 yrs old for girls. And honestly, these are not the top tier. A fairly ok job at the front office in a foreign bank will get you easily inthe range of 7 - 8K/mth. AND, banks are not the ones that is the biggest/best pay master (as you can already see whats happening the market now) now, so I am not talking about the highest band numbers.
Often, people talk about Singaore gross GDP growth or spread spectrum income growth has not increased by the corresponding increase in property prices... but it is also important to note it might be the top 20% income population that is buying the top 20% property assets (this is a broad generalisation that HDB forms the next 80% entirely, which in itself is a separate discussion altogether). Thus, unless your income analysis is done based on these top 20% (not forgetting foreign investors), it is hard to say income has not caught up with property price levels.
My feel is that most professional executives pay scale has risen by than 20-30% p.a. basis. During the boom years, from 2006-2009(early) most experience some (at least) 20-30% jumps in salary scales for EACH jump from each firm. Thus, it is not unimagineable the affordability of these 20% group have certainly increased significantly during the previous boom. Whilst the question is always about so what happens now?? Are those salary increases going to be sustainable - chances are no... but those who still remain with their jobs, will be keep in place and will continue to invest.
My simple views.
depending on yr age. the older u r, the higher the pct of yr cpf contribution goes into yr special and medisave account, thus yr OA account gets lesser contribution.
DW's calcuation of $1035 is base on the max contribution to OA account by a relatively young income earner of $4500 and above.
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