I am looking to apply for my first BTO next month but will be having unstable income next year due to change of employment, how should I budget for my first BTO? - Seedly
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Asked on 31 Oct 2018

I am looking to apply for my first BTO next month but will be having unstable income next year due to change of employment, how should I budget for my first BTO?

Will be self employed, currently have about $50k in my CPF. Looking at applying the new Tengah town.


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Jacob Chong
Jacob Chong, Executive Financial Advisor at PIAS
Level 4. Prodigy
Answered on 02 Nov 2018

I guess that if you are applying for BTO you will be applying as a couple right? So i assume that you be in a dual income family.

For HDB, the government implaced the Mortgage Servicing Ratio (MSR) & Total Debt Servicing Ratio (TDSR) help home seekers manage their finances before commiting to a HUGE DEBT.

In General, ***correct me if i am wrong guys for MSR the monthly mortage payment aka. monthly installment should not exceed 30% of your combine monthly income. for TDSR which is all your servicing debts aka. credit card installment, car installment and the Mortgage should not exceed 60% of your combine monthly income.

To be on a even safer bet for your BTO budget (because as a self employed you will be using cash to pay for the monthly installment) also to work out your monthly expenses as well. Especially those cost that you CANNOT SIAM ONE!!! like of etc. Hp bill, Electric bill because these are not computed to the above calculation. alternatively just allocate another 500 a month for these misc. expenses. (though misc but they are a huge part to your expenses as well) :(

The you reverse compute to what is the budget for your BTO.

I feel you too as an self employed person. So i know the anxiety of it all. But buying a house will be a big commitment so do take that step wisely and be on the safer side of things. When you business picks and you are able to afford bigger, then upgrade. Anyway BTO takes about 3-4 years and MOP is 5 years after you move in so don't over commit. There is always a chance to UPGRADE.

I hope this helps you a little on budgeting your BTO.

Cheers, Congrats and Good LUCK


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Teo See Hwa
Teo See Hwa, MArketing Associate at Propnex
Level 5. Genius
Answered on 05 Nov 2018

You must be able to pay the loan for 5 years. After 5 years you can sell if need to anytime before 5 years you need to return the HDB back.


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Conor Gan
Conor Gan
Level 3. Wonderkid
Answered on 02 Nov 2018

Hi there this is just to add on to jacob's answer. I too am an self employed and this is a very common issue. There are still many variables you have to look into for you to budget for your first BTO. Many couples make the mistake of jumping into a BTO too soon and land themselves in a 30year debt that they will remember forever.

There are alot of things to consider before anyone can give any suggestions on how to budget. Such as are you going to be the one paying for the downpayment and the mortgage? how much loan are you expecting to take? what is the financing like? Do you have any existing loans? Are there ways you can ay off the mortgage if you were to temporarily not be able to work for a few months? These are some of the thoughts i have in mind and i myself have decided to hold off BTO for abit longer for i do not wish to have the house as a liability when bad times hit.

First time commenting trying to give my two cents! do let me know if theres anything i can do better on:)


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