Asked by Anonymous
Im in a situation where my spouse’s cpf is used to finance his parents’ flat due to their outstanding hdb loans. As such we are unable go buy our own flat. His parents could not afford the monthly mortgage and would required the continued use of my spouse’s cpf for mortgage payment. How do we resolve this so that we could buy our own flat.
This is a very tricky and sensitive problem. Since your ultimate goal is to buy your own flat. He will need to be able to stop paying the mortgage, other you might have problem getting a mortgage for your home. As debt servicing will limit to how much loan is available (thus limiting the type of flat u can buy). There are some ways: #1: First you might need to cancel the CPF payment for the mortgage by your spouse. The mortgage will have to be serviced using cash in the name of his parent. (This will have to be kept secret). There after you will be in better debt servicing ratio to apply for a loan for your new flat. For HDB loan, repayment only starts when u receive your keys for the BTO.
After the new flat is ready for move in, the parent's flat could be sold where they can move in with u. Or other solutions as below.. #2: Lease buy back scheme - Sell the tail end lease back to HDB. The owners' age need to be 65. The proceeds, if any, must be used to topup owners' CPF retirement account up to the current full retirement sum. Government will grant a Cash bonus of a $1 for every $3 topped up this way up to $20k. Parents will be able to stay in existing flat this way. #3: Right sizing - More troublesome as u have to sell and buy a smaller unit. A loan can still be taken on the new smaller flat but it will be a smaller amount. If there are any proceeds, it can be used to topup the CPF RA to be eligible for cash bonus of up to $20k from the government. Without details it is really hard to suggest appropriate solutions . Are u currently staying together with his parents? What is the unit type of his parent's flat, how much mortgage left to pay? How Old are the parents? I also assume the flat is in the name of both his parents and they have been living there for more than 5 years? Are there anyone else living in the flat? Does your husband have sibilings? Income levels for both of u?
Let me know if u would like to discuss further.
There is a number of ways depend on your profile and your wife profile. From the question there is limited info to share how to resolve.
Consider downgrading the original flat to buy a new smaller one. That's all I can think of.
If the housing flat and allowance is required, then your finance family is really not doing his own son a favour. Using future money to pay for the present. (opportunity cost).