facebookWhat are the financial considerations to make in wanting to upgrade from a 4-room BTO to an EC/condo after 5 years. Approx how much savings does one need and the joint household income level. ? - Seedly

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          Anonymous

          18 Apr 2019

          Events

          What are the financial considerations to make in wanting to upgrade from a 4-room BTO to an EC/condo after 5 years. Approx how much savings does one need and the joint household income level. ?

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              Jim Tay

              Jim Tay

              05 Mar 2019

              Level 3·Director at Jimtay.com

              Hey! It's hard to advise for your question without understanding your specific financial position.

              However, when it comes to property affordability, consider the 3-3-5 rule and you will be very safe.

              3 - Your monthly mortgage should not exceed 30% of your monthly income

              3 - Your initial capital should be at least 30% of the purchase price

              5 - Purchase price should not exceed 5 times of annual income

              I have created a property upgrading blueprint which would be useful for owners just like you who are getting started. If you'd like one, you can get it for FREE here.

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                  Zuhdy Farhan

                  Zuhdy Farhan

                  03 Mar 2019

                  Level 4·Real Estate at National University of Singapore

                  1. Calculate the amount of cash proceeds you have from the sale of your BTO.

                  Cash Proceeds = Sale of BTO - Outstanding Loan - CPF used - CPF Accrued Interest.

                  BTOs in the market today experience decent capital appreciation right after MOP, i.e. Buangkok Vale owners have profited over $100K

                  This makes it easier for them to upgrade to a condo without tapping on their savings. Simply because,

                  Purchase of condo:

                  75% loan -- 25% Downpayment

                  Buyer's Stamp Duty

                  Additional Buyer's Stamp Duty

                  Conveyancing Fees

                  Can be covered with the Cash/CPF proceeds.

                  What's important also is your future mortgage payments, which can be calculated through the TDSR (which is limited to 60% of your income) and lastly,

                  how long you can survive in your property assuming that you lose your job and use mainly your CPF to cover the remaining mortgage.

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