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Thread: Pay less cash upfront for small BTO flats

  1. #1
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    Default Pay less cash upfront for small BTO flats

    http://www.straitstimes.com/archive/...flats-20140925

    Pay less cash upfront for small BTO flats

    Published on Sep 25, 2014 1:00 AM

    By Janice Heng


    EXISTING Housing Board flat owners who move to small new flats can choose to pay half of the required down payment upfront, and the rest later.

    This staggered down payment option is only for those looking to buy new two- or three-room flats in non-mature estates. They must be able to "unlock net sales proceeds" by doing this, meaning that their new flats must be cheaper than their existing ones.

    For buyers of such flats who do not meet this criterion but have trouble making the full down payment, their cases will be assessed on a case-by-case basis by the HDB.

    The change takes effect from this month's Build-To-Order (BTO) exercise, which began yesterday. The move aims to help flat owners who wish to "right size" to a new unit but have their funds tied up in their existing flats, said the HDB.

    Those who are not taking a bank loan, or who are taking an HDB loan, need to pay only 5 per cent in down payment when they sign the Agreement for Lease, instead of the current 10 per cent.

    Those taking loans from financial institutions need to pay only 10 per cent upfront, instead of the current 20 per cent.

    The other half of the down payment needs to be paid only when the buyer collects the keys to the new flat.

    In a blog post, National Development Minister Khaw Boon Wan noted that at his Meet-The-People sessions, he sometimes meets elderly people who want a smaller flat but have cash-flow problems.

    Last year, 47 elderly people cancelled their new flat bookings because they were unable to raise the down payment, he noted.

    To be eligible for the scheme, buyers should not have completed the sale of their existing flats when applying for the new ones.

    Applying for the scheme is not required, as the HDB will extend it to those who are eligible.

    The move was announced at yesterday's BTO launch of 4,630 new flats, across five projects in the non-mature towns of Bukit Batok, Hougang and Jurong West and one project in the mature estate of Kallang Whampoa.

    Flats range from 36 sq m and 45 sq m two-room units to five-room units of up to 112 sq m and 115 sq m Three Generation flats.

    Analysts expect a good response for the Kallang Whampoa project. It is in a mature estate and also close to Boon Keng MRT station, noted ERA Realty key executive officer Eugene Lim.

    But pastor Chua Hock Lim, 71, is trying for a three- or four-room unit in Bukit Batok instead, as it is "cheaper than Whampoa" and closer to town than Jurong West.

    As of 5pm yesterday, two-room flats in Hougang and four-room units in Kallang Whampoa were the most popular. Both had 1.3 applicants per unit, with singles accounting for most of the demand for the two-room flats.

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  2. #2
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    Is there something I don't understand about going for smaller flat.

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