Hi anon,
Actually a combined salary of that amount is great for a BTO. A very general rule of thumb for flat affordability is that your combined annual income make 10% of the total cost of the flat, not taking the grants into account.
I think for starters, you need to decide which flat you're looking at. A BTO is great because its cheap and have maximum lease (99yrs) but you have limited choice for location/flat level and whether you even get a chance to get it is entirely luck And you'll have to wait for completion too. A resale would be more expensive but they typically come with more grants and allow you to choose your location.
Once you've decided, you can decide how you'll finance the flat. You can decide either to go through CPF or bank loan to finance the flat. CPF bank loan allows you to pay your down payment (10% of the flat price) through your CPF-OA while bank loan may require a larger cash outlay on the onset. If you're currently cash strapped, you may want to consider financing your house through CPF loan. CPF loan rates are higher than bank loan rates now but do note that if you opt for bank loan financing, you wont be able to switch back to CPF loan financing after.
Don't be in a rush to pay off your housing too. Housing loan is considered as a "good" debt. Have an open discussion with your partner to evaluate the best course of action.
Financial planning is an integral part of life. You can reach me here to find out more.
Hi anon,
Actually a combined salary of that amount is great for a BTO. A very general rule of thumb for flat affordability is that your combined annual income make 10% of the total cost of the flat, not taking the grants into account.
I think for starters, you need to decide which flat you're looking at. A BTO is great because its cheap and have maximum lease (99yrs) but you have limited choice for location/flat level and whether you even get a chance to get it is entirely luck And you'll have to wait for completion too. A resale would be more expensive but they typically come with more grants and allow you to choose your location.
Once you've decided, you can decide how you'll finance the flat. You can decide either to go through CPF or bank loan to finance the flat. CPF bank loan allows you to pay your down payment (10% of the flat price) through your CPF-OA while bank loan may require a larger cash outlay on the onset. If you're currently cash strapped, you may want to consider financing your house through CPF loan. CPF loan rates are higher than bank loan rates now but do note that if you opt for bank loan financing, you wont be able to switch back to CPF loan financing after.
Don't be in a rush to pay off your housing too. Housing loan is considered as a "good" debt. Have an open discussion with your partner to evaluate the best course of action.
Financial planning is an integral part of life. You can reach me here to find out more.