The process of buying an HDB BTO flat is a crucial part of the adulating process for all individuals living in Singapore. All of this makes asset progression super simple. However, it doesn’t have to be scary. Moreover, the entire process can be completed in around 6 basic steps. Down below, we’ll be elaborating on each step for Singapore real estate investment.
Step 1: Eligibility Check
Here is one major thing to know before applying. Other real estate, whether in the country where you live or elsewhere, is not permitted. Within 30 months of your application, you must sell your other property if you are presently the owner.
There are also some other criteria you must fulfill when it comes to being eligible. The individual applying should be:
Applying Criteria
- Apply with a minimum of one other resident or PR as a joint family, indicating your spouse and any children (if any), your parents and any sibling (if any), or children you have legal custody of.
- If you are asking for an extra or Enhanced CPF Housing Grant or within three months of taking custody of your apartment, be set to declare your wedding before you gain custody of your apartment or within three months of taking control of your apartment.
- Be a 35-year-old or older single person.
- You may be an individual with citizenship with a non-citizen spouse on a visit or work visa. Keep in mind, this only works for 2-room flats in non-mature estates.
- Be a 35-year-old single citizen asking for an apartment with up to three other 35-year-old single citizens. Keep in mind, this only works for 2-room flats in non-mature estates.
Income Criteria
In order to get into the apartment of your dreams, you must make sure that you are not earning too much. Income limits for each kind of apartment are shown below:
- Two-bedroom flexi apartments cost $7,000, or $14,000 for short-term rentals (max 45-year lease)
- Depending on the project you’re balloting for, you may expect to pay between $7,000 and $14,000 for a three-room apartment.
- You’ll pay $14,000 if you’re acquiring a four-bedroom home or $21,000 if you’re buying it as a household.
Step 2: Balloting Process
The balloting process is pretty straightforward. For starters, you’ll need to keep an eye on the HDB website for announcements about impending discounts. HDB announces new BTO projects six months in advance, giving you plenty of time to choose the location of your dreams. You may also sign up to get notified about new HDB developments right here.
In the BTO application box, spend $10 to ballot for an upcoming release in an area of focus to you. Expect to wait three weeks to find out whether or not you’ve been fortunate. For further information on the HDB BTO registration process, please visit the HDB website.
Step 3: Acquiring HDB Loan
An important part of the HDB buying planning includes having a hold on your finances. Fortunately, there are options such as the HDB loan. One can either opt for this loan or a traditional bank loan. Bank loans are usually preferred for all those individuals who’ve got enough savings on hand. Check the Singapore bank interest rates beforehand. The pro here is that of low-interest rates. However, first-timers should avoid the hassle and stick to an HDB loan that doesn’t come with the hassle of a down payment.
It is advised to have all documentation for your desired loan on hand to avoid any complications later.
Step 4: Flat Selection
Flat selection is quite an exciting part of the entire process. After all, you finally get to pick the home of your dreams. At this stage, you’ll apply for your CPF housing grants. Bring the Enhanced CPF Housing Grant application paperwork with you to your apartment booking appointment if you haven’t already done so.
To decide which unit you should choose, you must know your queue number. If your line number is too high, you may not be able to acquire a place and will have to go through the process of balloting again.
All buyers must keep in mind to bring their IC, income papers, and HLE if they’re taking out a housing loan from the HDB when they arrive at HDB Hub to reserve their unit.
You may begin the purchasing process by depositing the choice fee on the spot after you’ve picked your apartment. The Singapore property prices trend will be as follows.
- For a two-bedroom flexi unit, the price is $500.
- For a three-bedroom apartment, you’ll pay $1,000.
- $2000 for a four-bedroom or bigger apartment house for rent in Singapore
Step 5: Lease Signature
Step 5 of the process is when homeowners finally get to sign the lease and hand over the down payment to confirm it. There will also be some legal fees and stamp duties to take care of. Understanding down payment amounts is now easier than ever.
If you’re taking out an HDB or a bank loan, the amount of your down payment varies. You’ll have to deposit 15% of the sales price in cash or CPF if you’re getting an HDB loan.
To get a bank loan, you’ll need to put down 25% of the total amount, with at least 5% of that in cash and the remainder in CPF. CPF funds may only be used as collateral for bank loans if they fall under a specified set of parameters.
Homeowners who are in their 20s and are applying for private property Singapore for the first time can apply for Staggered Down Payment Scheme, with the help of which the down payment can be split into 2. The first payment will be handed over at the time of signing the lease, while the next will be done when the terms of the agreement are signed, and key collection is done.
Step 6: Key Collection
The final step of the process is the key collection. The buyers will be informed as to when they can pick up the keys and begin their new journey. This guide should highlight all the essentials to all those wondering what is asset progression and how to get it done with the HDB process.
Difference Between MSR and TDSR
There is also a lot of confusion regarding the difference between MSR and TDSR, which will be clarified below.
TDSR indicates that the monthly loan debt service obligations cannot consume more than 60% of gross income. Everything from credit card payments and auto payments to student loans and mortgages is included in the loan repayments.
In other words, TDSR isn’t exclusively for private residences. Even if we buy an HDB unit, we will still be liable for this TDSR. It is crucial to remember that the TDSR should be lower or at least equal to 55%.
However, MSR is quite different. Housing loans for HDB flats and new Executive Condominiums via Developers are only eligible for MSR. As a result, it’s not only for HDB apartments. There is a 30-percent limit on how much purchasers may spend on mortgage payments under MSR.
Upcoming BTO
For interested parties, there is going to be a new BTO launch in the August of 2022. Bukit Merah, Ang Mo Kio, and Tampines all have mature estates where three of the condos will be situated, whereas Jurong East, Woodlands, and Choa Chu Kang all have less mature estates where the three condos will be situated. There will be around 4,960 units available in total, with a combination of both mature as well as non-mature units.
The distribution of the units will be as follows: Bukit Merah will have 1650 units, Ang Mo Kio will be 890 units, Jurong East will have 560 units, Tampines will consist of 260 units, Choa Chu Kang will be 980 units, and Woodlands will have 620 units.
If you like to find out more on how you can make money from an HDB BTO Read here.
