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Thread: need advise - upgrade to condo 101

  1. #1
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    Default need advise - upgrade to condo 101

    i am looking at upgrading to a private condo (looking at those TOP soon) from my hdb...will leverage on the cash proceed from my hdb sale to pay the cash portion of the condo...how to time the sale & purchase? What are the good & bad experiences on this...

  2. #2
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    i guess a few questions you have to ask yourself is:

    How long can i wait to get the right price?
    What matters to me most? price , location or amenities?
    Which area am I looking at?
    How much loan can I afford to take?


    Those recently TOP projects has seen an increased in the prices due to the strong sales going on last mth. We have to wait for another market downturn or financial crisis for prices to soften abit again. So far, the mass market condos prices are holding pretty well even in bad times. I guess it just boils down to patience and comfortable level of paying.

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    Quote Originally Posted by coral
    i am looking at upgrading to a private condo (looking at those TOP soon) from my hdb...will leverage on the cash proceed from my hdb sale to pay the cash portion of the condo...how to time the sale & purchase? What are the good & bad experiences on this...
    If that's the case, then you need to sell your place first before committing to buy. Selling HDB (after buyer exercise option) will take 6-10 weeks minimally. The cash portion for the sale proceed will be given to you at the 2nd appointment, which is at the end of the transaction.

    For buying, here's the outlay.
    1% Cash booking fee - when u agree to buy and set the buying price
    4% Cash - When buyer exercise option
    Stamp fee (cash) - within 1 month of buyer exercise option.
    15% Cash or CPF / remaining with bank loan - When completing transaction

    You may want to consider bridging loan. Again to apply, you need to show the bank that you already sold your HDB flat (by producing the sales agreement).

  4. #4
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    oops, sorry didn't read your question well enough. thought you were asking about the factors buying a property.

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    You need to sell your HDB first. Then, use the buyer's exercised OTP (Option to Purchase) to get bridging loan as you will get the cash amount only when HDB sale transaction is completed and for HDB sale, timing is a bit uncertain as you need to fix appointment for 1st appt and 2nd appt etc and can take 3 months or more whereas for private property the latest completion date is always as stated on the OTP unfront (usually 8 or 10 weeks from OTP issue date).

    Quote Originally Posted by coral
    i am looking at upgrading to a private condo (looking at those TOP soon) from my hdb...will leverage on the cash proceed from my hdb sale to pay the cash portion of the condo...how to time the sale & purchase? What are the good & bad experiences on this...

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    Quote Originally Posted by hkching
    If that's the case, then you need to sell your place first before committing to buy. Selling HDB (after buyer exercise option) will take 6-10 weeks minimally. The cash portion for the sale proceed will be given to you at the 2nd appointment, which is at the end of the transaction.

    For buying, here's the outlay.
    1% Cash booking fee - when u agree to buy and set the buying price
    4% Cash - When buyer exercise option
    Stamp fee (cash) - within 1 month of buyer exercise option.
    15% Cash or CPF / remaining with bank loan - When completing transaction

    You may want to consider bridging loan. Again to apply, you need to show the bank that you already sold your HDB flat (by producing the sales agreement).
    stamp fee can be CPF, correct?

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    Heard bridging loan has higher interest rate? Is it really necessary? Why can't he just take a normal bank loan and do partial pre-payment (normally free) once he receives the HDB proceed. What is the advantage of bridging loan?

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    Quote Originally Posted by jonleelk
    stamp fee can be CPF, correct?
    Stamp fee can be CPF but u have to pay cash first then get reimbursed from your CPF

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    So if I am not able to sell my HDB earlier, I should have about 8% (1%+4%+3% stamp fee) cash readily? Can someone tell me how to calculate the "cash" I may take back from selling my HDB? or a spreadsheet?

    Is it, HDB Sold Transaction Price - CPF Used & Interest - Outstanding Loan = Take Back Cash?

    Quote Originally Posted by hkching
    If that's the case, then you need to sell your place first before committing to buy. Selling HDB (after buyer exercise option) will take 6-10 weeks minimally. The cash portion for the sale proceed will be given to you at the 2nd appointment, which is at the end of the transaction.

    For buying, here's the outlay.
    1% Cash booking fee - when u agree to buy and set the buying price
    4% Cash - When buyer exercise option
    Stamp fee (cash) - within 1 month of buyer exercise option.
    15% Cash or CPF / remaining with bank loan - When completing transaction

    You may want to consider bridging loan. Again to apply, you need to show the bank that you already sold your HDB flat (by producing the sales agreement).

  10. #10
    teddybear's Avatar
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    Go to www.cpf.gov.sg website, login using your Singpass, and inside there you can find the amount you need to return to CPF under "CPF used for property". Be careful and don't assume this amount hor.
    Yap, Take Back Cash = HDB Sold Transaction Price - CPF Used & Interest - Outstanding Loan - legal fees

    Quote Originally Posted by coral
    So if I am not able to sell my HDB earlier, I should have about 8% (1%+4%+3% stamp fee) cash readily? Can someone tell me how to calculate the "cash" I may take back from selling my HDB? or a spreadsheet?

    Is it, HDB Sold Transaction Price - CPF Used & Interest - Outstanding Loan = Take Back Cash?

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    I know of that website & know the amounts so that's the amount I need to return back to CPF after sale of my HDB right.

    Quote Originally Posted by teddybear
    Go to www.cpf.gov.sg website, login using your Singpass, and inside there you can find what you want under "CPF used for property".

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    Quote Originally Posted by coral
    Is it, HDB Sold Transaction Price - CPF Used & Interest - Outstanding Loan = Take Back Cash?
    Should be correct.

    Also need to deduct the commission u need to pay the agent for selling ur HDB. Is that still 3% for seller?

    Another option for u to consider is to sell ur HDB now, then rent it back from your buyer for a few months until ur new condo is ready. Save some shifting cost and bridging loan.

  13. #13
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    Quote Originally Posted by coral
    So if I am not able to sell my HDB earlier, I should have about 8% (1%+4%+3% stamp fee) cash readily? Can someone tell me how to calculate the "cash" I may take back from selling my HDB? or a spreadsheet?

    Is it, HDB Sold Transaction Price - CPF Used & Interest - Outstanding Loan = Take Back Cash?
    U can also go to HDB website to calculate the estimated sales proceed. But first you will need some figures from cpf first. If you and your spouse both use cpf to buy the hdb flat, then go to cpf website to check for both.

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    Quote Originally Posted by jitkiat
    Heard bridging loan has higher interest rate? Is it really necessary? Why can't he just take a normal bank loan and do partial pre-payment (normally free) once he receives the HDB proceed. What is the advantage of bridging loan?
    Normally the bank will lend up to 80% of the purchase price for the private property. A bridging loan is required if the buyer needs to loan for the additional cash component, 4% downpayment, etc.. (above the 80% mentioned earlier).

    Example, if I sell my HDB in Feb. I will most likely get my cash proceed in Jun. But since I want to buy a new property in Mar, I need cash in March. If I wait until HDB sales complete before buying, I will not have a place to stay in the meantime... So I need a bridging loan. At least it is cheaper than paying rent and moving twice.

    As you do not have any asset as mortgage, the best you could do is to get an unsecured loan. These loan are very very expensive.

    Alternatively, banks has bridging loan to help buyers tie over a short period before the sale proceeds arrives. Bridging loans has its own criteria:

    1. Loan period not more than 6 months
    2. Buyer must show that they already sold their current property (via sales agreement)
    3. Buyer must exercise the option on the new property

    Interest rate for bridging loan is also quite high, but since loan period is 6 months or less, some people dun really mind.

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    Quote Originally Posted by jitkiat
    Heard bridging loan has higher interest rate? Is it really necessary? Why can't he just take a normal bank loan and do partial pre-payment (normally free) once he receives the HDB proceed. What is the advantage of bridging loan?
    Hi Pal.

    Heard bridging loan has higher interest rate?
    Yes.

    Is it really necessary?
    For some, absolutely.

    Why can't he just take a normal bank loan and do partial pre-payment (normally free) once he receives the HDB proceed.
    How to get secure loan? The HDB cannot pledge out. The intended condo could not be exercise and sign S&P due to a lack of funding for the 20% downpayment. Only can talk & talk and make expressed term but not contractual implied term.

    What is the advantage of bridging loan?
    Leverage. To assist in the 20% downpayment or whatever reason there may be.

  16. #16
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    Quote Originally Posted by boeing777
    Stamp fee can be CPF but u have to pay cash first then get reimbursed from your CPF
    Not mandatory. Conveyancing lawyer has absolutely enough time to get CPF to disburse the stamp duty to IRAS in normal healthy purchase. Same to legal fee.

    Some common scenerios where you need to pay first;

    1. CPF withhold. For whatever reasons, super-negative equity of your flat, own revenue house money, someone file a claim, etc.

    2. Seller is flipping and trying to avoid stamp duty. Thus, some tricks up the sleeve to rush you into exercising the OTP which result short lead-time for CPF to disburse.

    3. Lazy, inefficent lawyer.

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    Thank you for clarification about bridging loan

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