Is the cash over valuation (cov) part of the 25% downpayment when taking bank loan?

If market valuation is lower than the resale price, then the 25% downpayment will be based on the valuation amount. That means you still need to pay 5% of the valuation amount in cash ON TOP OF the COV.

For example (Resale price Market valuation):

Resale price: $550,000

Valuation: $500,000

Downpayment (based on valuation, since it is the lower of the two amounts):

Cash over valuation: $50,000 (in cash)

• 5% of valuation: $25,000 (in cash)

• 20% of valuation: $100,000 (in cash or CPF)

Bank loan amount: $375,000

For example (Resale price < Market valuation):

Resale price: $500,000

Valuation: $550,000

Downpayment (based on resale price, since it is the lower of the two amounts):

Cash over valuation: $0

• 5% of resale price: $25,000 (in cash)

• 20% of resale price: $100,000 (in cash or CPF)

Bank loan amount: $375,000

Hope this clarifies!

The bank will only loan up to 75% of the resale price or valuation of the flat, whichever is lower.

If the valuation is lower, the difference between the valuation and resale price has to be paid in cash since the bank will not loan that amount. Whatever is the 5% cash portion of the resale price will also be in cash.

For example, if the resale price is $120,000 and the valuation is $100,000. Bank will only loan up to $75,000 (assume 75% LTV). The $20,000 difference between resale price and valuation is to be paid in cash. The 5% cash portion of the resale price will be $6,000. So total cash required will be $27,000+, if including other fees.