18 Apr 2019
I make 180k a month, 300k currently in a mid term bond, 150k CPF OA, and 700k cash on hand from recent sale of first home. Looking at properties ranging from 1.7-1.8m or renting at about 3k a month. Which is better? Should I cash out my 300k bond?
Hey! Thanks for sharing with us! I would not cash out the bonds. But before we get there, there are a few things we should look at first, your CPF balance, the downpayment, additional stamp duty (ADSD).
Your CPF - I’m assuming it is your second property, therefore you will need to set aside the Basic Retirement Sum (presently that’s $85,500) in your OA and SA before you can use the excess savings in your OA.
The downpayment - You are also required to pay about 20% of your property in fees and costs aka your downpayment (you can use your CPF for this). In your case, that would be 360,000 if you are looking at a 1.8M property.
Additional Stamp Duty - Not forgetting ADSD for 2nd property and subsequent property. If you are a Singaporean citizen, that's 7% for your second house and 10% for your third and subsequent property. That’s ranging about 126K-180K.
That amount up to approximately 540K minus your CPF balance. With your current cash at hand, you are able to set aside this amount without cashing out your midterm bond. Also if I were you, I would not rent because it would take up a substantial amount from your pay.
Although not mandatory, hiring a property agent that you can trust will be helpful in guiding you through the whole process.
I hope this helps and I wish you all the best :)
You can play that 700K I. Many different ways. For me, I would use it to buy multiple properties and...
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