Start On New Launch Condo
1. Start your financial planning
Based on your salary, age, and loan commitments, determine the maximum house loan amount and property purchase price you can comfortably afford.
Total Debt Servicing Ratio (TDSR) – As part of the property cooling measures, the TDSR was introduced. Its goal is to keep borrowers from becoming overly reliant on their debts. The current TDSR is 60%, which means you can’t utilize more than 60% of your gross monthly income to pay off all of your debts. Car loans, mortgage loans, and even credit cards fall under this category.
Loan-to-Value (LTV) Ratio — With a bank loan, you can get up to a 75 percent LTV ratio for your first home. When it comes to the second housing loan, however, the LTV is dramatically decreased.
The LTV maximum is 45 percent if you have any outstanding house loans that you haven’t paid off and you’re still trying to buy your second home. The LTV restriction is 35 percent if you are purchasing your third property.
Before they can use the extra savings in their Ordinary Account for a second or subsequent property, owners who are utilizing CPF for an existing property must set aside half of the current CPF Minimum Sum. Half of the prevailing Minimum Sum can be met by using savings in the Special Account (including the amount used for investments) and Ordinary Account.
The amount you need to set aside will be adjusted each year because the CPF Minimum Sum is raised in July. You can find the most up-to-date CPF minimum sum online.
It’s best to get an approval-in-principle (AIP) from a bank at this point.
Oh my home features in-house mortgage experts who can help you compare home loan packages from various institutions. We’ll find you the greatest deal based on your requirements, completely free of charge.
2.Make a list of new condominiums to visit and set up appointments to see show apartments.
Here are some things to look for to see if you’re making the right decision before being swayed by the developer’s flashy marketing strategy:
the location (accessibility and amenities)
Dimensions of the facilities
The condo’s interior
Appreciation of capital (based on upcoming developments)
Situation on the market now
the natural world (i.e. noise level)
Track record as a developer
Once you’ve narrowed down your favorites, it’s time to start looking for a good agent to help you with your purchase. Due to the COVID-19 pandemic, appointments are now required, and the government has tightened social-discrimination policies.
3. Pay the reservation money for your new condo unit at the launch.
When purchasing a new launch condo apartment in Singapore, you must pay 5% in cash at the time of booking and sign an Option to Purchase (OTP) to legally reserve the property. If you cancel the purchase, you’ll lose a percentage of your booking cost (typically 25 percent).
You can finalize your loan for the new launch apartment once you obtain a copy of the OTP. The Letter of Offer – the official name for the document containing the terms of the bank that is providing you a loan – will be issued by the bank from which you are accepting the loan.
4.Contract of Sale & Purchase
- As soon as the developer receives the OTP, he will deliver the Sales & Purchase Agreement.
- You will need to sign the S&P and exercise the OTP within three weeks of receiving the S&P.
- You will have to pay the remaining 15% (cash or CPF) down payment (aka exercise fee) within eight weeks of signing OTP.
- The Buyer’s Stamp Duty (BSD) is due within two weeks of signing the S&P.
BSD is a tax that every home buyer has to pay when they purchase property. The BSD amount depends on the property price. The more expensive the property, the higher the tax.
The following charges apply to residential properties:
- The first $180,000 will be taxed at 1%
- while the next $180,000 will be taxed at 2%
- while the next $640,000 will be taxed at 3%
- for the remaining $640,000
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