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Thread: 40% Downpayment

  1. #1
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    Default 40% Downpayment

    I have an HDB flat and the current loan balance is about $50,000. So I don't qualify for the 80% bank loan to buy a 2nd property (private property).

    For the sake of constructive discussion, how would you suggest people like me (who are looking to buy a private property) come up with the 40% downpayment? I am sure there are thousands wo are in a similar situation
    and your answers/ideas would benefit.

  2. #2
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    Make more money until u can clear ur first loan or afford e 40% down payment. Other not so good options include going to casino, borrow from ah long, borrow from bank against e value of ur current house.

  3. #3
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    Quote Originally Posted by jbond
    I have an HDB flat and the current loan balance is about $50,000. So I don't qualify for the 80% bank loan to buy a 2nd property (private property).

    For the sake of constructive discussion, how would you suggest people like me (who are looking to buy a private property) come up with the 40% downpayment? I am sure there are thousands wo are in a similar situation
    and your answers/ideas would benefit.
    if you intend to sell yr hdb then there should be some bridging loan available, with a condition you MUST sell your hdb within 6 months or something like that. if you intend to keep your hdb then refer to hyenergix
    proposal.

  4. #4
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    pay up the 50k then buy condo w 20% down lo

  5. #5
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    yeah, 50k doesn't seem like a lot of a loan in pte ppty terms.

    Quote Originally Posted by McKinnon
    pay up the 50k then buy condo w 20% down lo

  6. #6
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    Quote Originally Posted by McKinnon
    pay up the 50k then buy condo w 20% down lo
    Yup, that's the only way.
    Consider selling your car if you have one to raise the funds.

  7. #7
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    buy a new release project under construction? You only need to pay the first 20%. The next 10+10% will only come about 6 months to 1 year later.


  8. #8
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    two scenario:

    1) outstanding HDB loan of $50k and buy another property with 40% down.

    2) Clear outstanding HDB loan before you buy another property with 20% down.

    The delta between the 2 is 20% of your new property. If this 20% is less than $50k, then you should go for option 1. But it is not possible to get a normal property nowadays for lesser than $250k. So i would recommend you to go for option 2.

  9. #9
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    Whether you clear the outstanding 50K or not, it is not advisable to touch private property unless you have in excess of 40% downpayment.

  10. #10
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    Quote Originally Posted by jbond
    I have an HDB flat and the current loan balance is about $50,000. So I don't qualify for the 80% bank loan to buy a 2nd property (private property).

    For the sake of constructive discussion, how would you suggest people like me (who are looking to buy a private property) come up with the 40% downpayment? I am sure there are thousands wo are in a similar situation
    and your answers/ideas would benefit.
    1. Can you pay the condo mortgage at 30 % of your gross monthly income be it 20% or 40% deposit?
    2. Do you have any $ in the CPF?
    3. Do you have cash for 6 month of mortgage if your condo is not rented out?

    If one of the above is no, think you should consider other investment.

  11. #11
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    My situation prettymuch similiar.... would like to hear you out.. (expert out there)

    I have an HDB flat and the current loan balance is about $60,000. So I don't qualify for the 80% bank loan to buy a 2nd property (private property).

    We missed the boat during 2009... went in Feb, suddenly the property market boom like nobody business in Apr 2009... thus force to stop shopping and relook into our finances. Damn...

    We've cash available 200k for the down payment (after redeem our HDB). We did a quick calculation after deducting the 5%+15%+3%(stamp duty)... we could barely afford a new launch unit for family stay... (3+study & above)... sob.. sob...

    What will you do if you're in my shoe?

    1) take the risk and buy ATT? ($1m at least for 3+S), wait till TOP (3 years later) and rent out current HDB
    2) get a resale unit for stay, quicky rent out HDB to earn rental?
    3) wait for market dip... (may or may not)... then enter the market?

    Please give in your opinion for reference... thanks!

  12. #12
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    I have a similar situation. I have a current loan so not enough vit M for 40% downpayment for another 4+1 room pte property. Any expert can advise me?

  13. #13
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    If I owned a HDB flat, I won't sell it unless there I forsee substantial deterioration of the property or environment (e.g. construction of highway, change in safety of neighbourhood, leakages).

    Furthermore, if don't even have enough money for private property down-payment, should focus on making more money, not trying to squeeze money out from a rock.

    不要打肿脸充胖子. He who does this will only bring suffering to himself.

  14. #14
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    Quote Originally Posted by jbond
    I have an HDB flat and the current loan balance is about $50,000. So I don't qualify for the 80% bank loan to buy a 2nd property (private property).

    For the sake of constructive discussion, how would you suggest people like me (who are looking to buy a private property) come up with the 40% downpayment? I am sure there are thousands wo are in a similar situation
    and your answers/ideas would benefit.
    Don't have the 40%, drop the idea, don't even dream of the 2nd property until u have this $, if not u are just stretching...If u have to borrow, imagine bad times hit us, 2nd property empty, party u borrow the $ from ask u to pay up, it will leave u pulling your hair, sleepless nites...

  15. #15
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    Quote Originally Posted by charm
    We missed the boat during 2009... went in Feb,
    "went in" means never buy?
    Think u already weigh ur options, 1) or 2) should be workable.
    1) can start saving bullets after paying ur down for new dev.
    2) just don't over-stretch for resale.

    If i were u I prefer 2), are u confident ur hdb can get tenants quick? Redeem ur hdb first. In the worst scenario let go hdb. Must do ur homework.

  16. #16
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    Quote Originally Posted by maisonjai
    "went in" means never buy?
    Think u already weigh ur options, 1) or 2) should be workable.
    1) can start saving bullets after paying ur down for new dev.
    2) just don't over-stretch for resale.

    If i were u I prefer 2), are u confident ur hdb can get tenants quick? Redeem ur hdb first. In the worst scenario let go hdb. Must do ur homework.
    Paiseh... My "went in" means started to shop for pte condo :P .. but the sudden surge really scared us off... regretted....

    thanks for replying... actually after visited ATT..... kind of know that we will never get a chance to buy new launch liao (this crazy taking up rate has made SimLian increased price )

    I think 2) is the best choice for us now... but hor, the stupid resale market still asking for sky price leh... but now at least can see ppl ads to seel below valuation (not sure how true it is though).... hope and pray hard that it come down abit while we accumulate our

  17. #17
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    Quote Originally Posted by evergreen
    If I owned a HDB flat, I won't sell it unless there I forsee substantial deterioration of the property or environment (e.g. construction of highway, change in safety of neighbourhood, leakages).

    Furthermore, if don't even have enough money for private property down-payment, should focus on making more money, not trying to squeeze money out from a rock.

    不要打肿脸充胖子. He who does this will only bring suffering to himself.
    So agree with your belief by not selling HDB... that's the reason why we still hold on till now... as it will be our passive income generator in future

  18. #18
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    Quote Originally Posted by jbond
    I have an HDB flat and the current loan balance is about $50,000. So I don't qualify for the 80% bank loan to buy a 2nd property (private property).

    For the sake of constructive discussion, how would you suggest people like me (who are looking to buy a private property) come up with the 40% downpayment? I am sure there are thousands wo are in a similar situation
    and your answers/ideas would benefit.

    I tink you already have the answer. You cant afford it.

  19. #19
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    Quote Originally Posted by Jadey
    I tink you already have the answer. You cant afford it.
    he already said he cannot afford it. So he asked fellow forummers on how he can afford the 40% downpayment.

    from his statement, he implies that he can afford 20% DP, but cannot afford 40% DP.
    So my suggestion to him is: pool his money with friends, relatives or the thousands of people in similar situation as him to make up the 20% difference.
    Proverb: A burden shared is a burden lessened.

    rather than wanting to have 100% of nothing ('cos he cannot afford), better to have 20% of something (share property purchase).
    Last edited by hopeful; 21-09-11 at 13:48.

  20. #20
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    since you can afford 20% but not 40% dp, just pay up the $50k loan... use CPF or something... wipe clean your cpf...

  21. #21
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    Quote Originally Posted by hopeful
    he already said he cannot afford it. So he asked fellow forummers on how he can afford the 40% downpayment.

    from his statement, he implies that he can afford 20% DP, but cannot afford 40% DP.
    So my suggestion to him is: pool his money with friends, relatives or the thousands of people in similar situation as him to make up the 20% difference.
    Proverb: A burden shared is a burden lessened.

    rather than wanting to have 100% of nothing ('cos he cannot afford), better to have 20% of something (share property purchase).
    you will need to engage a good lawyer to draft out an agreement for this sort of buying arrangement. things to consider.

    1) What if one wish to sell, who get to buy, who will pay for stamp duties.

    2) How you split the rental income is assuming its rented or who get to live there, who is going to manage it? Will he be paid to manage it?

    3) Who to decide how to renovate the house or how much to pay, which ID to use etc?

    4) If someone fall behind on mortgage payment, how are you going to deal with such situation.

    IMO, if you want to invest in property, do it yourself rather than getting friends and relatives to get involve. When it comes to money, things always end up very messy

  22. #22
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    Quote Originally Posted by Jadey
    you will need to engage a good lawyer to draft out an agreement for this sort of buying arrangement. things to consider.

    1) What if one wish to sell, who get to buy, who will pay for stamp duties.

    2) How you split the rental income is assuming its rented or who get to live there, who is going to manage it? Will he be paid to manage it?

    3) Who to decide how to renovate the house or how much to pay, which ID to use etc?

    4) If someone fall behind on mortgage payment, how are you going to deal with such situation.

    IMO, if you want to invest in property, do it yourself rather than getting friends and relatives to get involve. When it comes to money, things always end up very messy
    Good pointers. Most of the times, parties will share-share, end of the day, who is the one doing all the "dirty" admin work sorting reno, rental, agent. If bad times hit, 1 or more party delay their contribution/mortgage payment, then jialat, who is going to be the "policeman"...Agree with you, could end up messy...

  23. #23
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    Quote Originally Posted by Jadey
    you will need to engage a good lawyer to draft out an agreement for this sort of buying arrangement. things to consider.

    ............
    your points are valid. They have to be trashed out by the investors themselves.

    I think there is this guy who run a property investment company and conduct seminars. He invites the participants to chip in their money to buy some commercial properties.

    So perhap use that template?

  24. #24
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    Quote Originally Posted by hopeful
    your points are valid. They have to be trashed out by the investors themselves.

    I think there is this guy who run a property investment company and conduct seminars. He invites the participants to chip in their money to buy some commercial properties.

    So perhap use that template?
    the sort of structure always end up benefiting the investment company because as investors, you have almost have no control abot how they invest and what they invest.

    can play with investor money, but dont play with relative and friends money lah.

  25. #25
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    I think the biggest problem would be the exit time, ie, when to sell and how much to sell.

    If one party wants to sell and the rest not willing or no money to buy over his share, then how?

  26. #26
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    sell away your HDB, go for duo key private condo and rent one one unit... EC units if you can find and utalised all the grants if you can get.

    Practially will not be strained by 2 loans and perhaps your cash work harder for you.

  27. #27
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    Quote Originally Posted by rattydrama
    sell away your HDB, go for duo key private condo and rent one one unit... EC units if you can find and utalised all the grants if you can get.

    Practially will not be strained by 2 loans and perhaps your cash work harder for you.
    Yup agree, this is a good option. However dual-key units tend to be very popular and hard to find in market nowadays...

  28. #28
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    Is the 40% down payment applicable if you pay off your HDB. I was under the impression that once you pay off your current property, your loan eligibility is reset back to 20% down payment for the next one .

  29. #29
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    Quote Originally Posted by Santro
    Is the 40% down payment applicable if you pay off your HDB. I was under the impression that once you pay off your current property, your loan eligibility is reset back to 20% down payment for the next one .
    yes you are right

  30. #30
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    ah..Thanks.
    Jbond - Just pay off the hdb loan and go for the next one with 80% loan. You can use CPF as well if save or already meet the minimum sum requirement.

    Quote Originally Posted by 1000g
    yes you are right

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