Asked on 01 Mar 2019
We’re not rich, given that we have been studying all our lives. we’ve had part time jobs for a while now so there’s enough for initial payments. Just wondering if the early bird gets the worm - does applying early give us a head-start?
Hey there. I was recently reading up on these as my brother was thinking about getting a BTO first as well. Had some brief knowledge after reading tips from seedly posts! Just check out their blog articles and you'll know what I mean.
First of all, as others have mentioned about the amount of money that is actually required is way beyond the upfront 5%/10% down payment. Theres other fees and also renovation cost that you need to factor in as well. But maybe we'll talk about the money later...
Regarding the 'early bird gets the worm' its partially true. Cus usually you wont be so heng to get a flat in your first try. And i believe that if you are a 2nd application onwards applying, you will get extra ballot chances which means that your chance of getting the flat after a few tries is higher. However, if you manage to get a queue number but didnt book a flat your extra ballot chances will be resetted.
Also, another good thing about applying early is that you may get more grants and stuffs because of the lower income, etc. However if I'm not wrong one of you must start working (full time) before collecting the keys for them to calculate your income and also the amount of loans that you guys can take. Given the above scenario, if you guys are damn lucky to get a flat on your first try, you guys may not be able to get your first job before collection of keys.
As for the amount needed for BTO, if im not wrong you need about $40-50k in total before you can collect the keys. (Note, this amount is before renovation cost) Its true that you only need 5% for initial payment and the remaining amount when collecting the keys but as what Farhan mentioned you may not be able to save that remaining amount of money given the fact that both of you are still studying and working part time. So I hope that both your savings currently (including CPF OA) have roughly $40k.
(Erm P.S. I hope you ain't my brother ya? 😂)
Source: (You can read the following blog post for more details)
Ultimate BTO Guide For Undergraduates https://blog.seedly.sg/ultimate-bto-guide-for-undergraduates/
I have the same worries as you, being a second year undergraduate and having a long term relationship.
The biggest question to ask yourself is if you and your boyfriend are financially ready. Although the government has come up with schemes to help younger couples, a BTO is still a huge investment and there are many cases where couples make huge financial mistakes and incur losses.
A brief outlook on finances:
$10 Application Fee
$2000 Flat Selection/Option Fee
$5,000 Stamp Duties
Then construction, which takes 3 years, means you would be in year 4 (if you are doing a 4 year course) and still not having a full time job.
Remaining 5% Downpayment during key collection
$275 Survey Fee
$28.30 Registration Fee
$178.66 Home Protection
$5.50 Fire insurance for 5 years
So if you can't cough out this cash yet, do reconsider buying now. Don't worry about the time - there will be plenty of new BTOs to come, especially in New Towns.
Look at Tengah, Whampoa, Bidadari, Punggol, just to name a few. Your time will come.
If you are confused with any of the above finances, feel free to contact me. Will be more than happy to help you out.
I would really look closely into:
Your current combined savings (which you mention is enough for initial payments)
Your projected future earnings
A detailed look into costs that will come
Consider the following:
5% downpayment in cash if you are using a private bank loan
Stamp duty for Agreement for Lease
Caveat registration fee
Home Insurance premiums
Renovation and furnishing costs
One thing that bothers me a bit is seeing couples rush into marriage to buy a BTO in order to avail certain schemes to help young couples. But what is not often public/reported is how some couples split before they even get the keys, or split a year into marriage. While it might not be directly applicable, I think it makes sense to consider the reasons why you and your boyfriend are looking to buy property as undergrads. You guys probably still have a long way ahead!