Should I apply for my BTO as early as possible? - Seedly
 

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Asked by Anonymous

Asked on 12 Dec 2019

Should I apply for my BTO as early as possible?

Hi, i'm looking to get a bto with my partner, we both just came out of uni and have jobs already. Should we wait to do this- for us to progress a bit further in our careers and get a raise first- to grow our savings a bit more to decrease the financial burden buying a house will have on us? Or should we apply as early as possible? what are some things that we should consider when it comes to this?

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Wallace Chai
Wallace Chai
Level 9. God of Wisdom
Answered on 17 Dec 2019

If you have found the right bto, better to get it earlier. You will be able to get extra grant with a lower salary.

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9

Hi anon,

If you're certain that your partner is the person whom you will want to spend the rest of your life with, take it from someone who waited a little too long to do so: Please apply for your BTO early.

Not only will you have more chances to get a location eventually due to the additional ballots after 2 failed attempts (hopefully not!), you will also be judged based on your income at the time of application which should be lower as you are just starting out.

Don't worry about growing your savings. Assuming your flat arrives 3 years after you start work, and with a median salary of $3K, no salary increment, no bonuses or AWS, (a pretty extreme case), you will still have $26K each in your CPF, or $52K in total, enough to pay off the 10% downpayment on a $500K flat.

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8

Before looking at this financially, make sure that you guys are certain you'll be spending the rest of your lives together. :) if you're certain, then go ahead.

You'll get a higher grant when your income is lower which will settle most if not all of the down-payment required and you'll only need to pay the option fee of 1k or 2k depending on size of flat.

Juat make sure you follow the rule of thumb of having your home cost at max 5-7 X your combined annual income. :)

All the best! ❤️

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Bjorn Ng
Bjorn Ng
Top Contributor

Top Contributor (Jan)

Level 9. God of Wisdom
Answered on 20 Dec 2019

Hey there! Yes, if you found a location you like, just apply for it first, no harm actually. In fact, there wouldn't be much downside initially as your CPF will be used for the downpayment. Me and my fiancee applied BTO once we were straight out of uni, no issues and our downpayment was covered by CPF. As long as you both like the location, go for it!

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Yanisa Koh
Yanisa Koh
Level 6. Master
Answered on 13 Dec 2019

Firstly, are u 2 sure that u are the right ones for each other? The worst thing would be to plunge ahead with booking a BTO before realising u are incompatible and break up.

If you are sure, then I would encourage u to book a BTO early. During your selection, do take the time to make some financial calculations about the price of the flat, amount of loan required, installment amounts and your salary.

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Eveline Lau
Eveline Lau
Level 6. Master
Answered on 13 Dec 2019

Yes, provided:

  1. You're sure you guys want to marry each other
  • this is no brainer but many people are so motivated by owning a house that they did not consider this well and end up forfeiting the house and deposit
  1. Both of you have planned and decided on how the family is going to be like for at least the first 5 years
  • this will set up how much money you need, whether you can be financially stable to have a family. Many couples end up in divorce in the first few years due to financial issues.
  1. Both of you have done a financial projection for the next 5 years
  • Apart from the downpayment required, you are expected to pay stamp duty etc and more importantly in the future, paying the mortgage. Doing a projection of how much money you have and whether you can afford the house (and related renovation costs), and which size of house.

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Firstly, we need to have a complete understanding on our cashflow. Through this process, we will understand our earning ability and spending habit. Here is a guide to help you: https://www.blog.pzl.sg/understanding-your-personal-cash-flow/

Thereafter, decide the size of the BTO that you are going for, e.g. 5 Room at Punggol. Then check out the price as well as the expected delivery date. From there, work backwards to find ou the exact downpayment and monthly instalment required from you today.

Now, ask your partner and yourself if both of you are ready to commit to this long-term liability (liability because both of you will need to service the loan).

Additionally, there are other costs associated with this home, e.g. renovation, utility. All these form part of the costs that both of you must be prepared to spend in the short to long run.

To help you, create a budget that is capable of helping you to plan for the future. The best way to do this is via automation and this is how I do mine: https://www.blog.pzl.sg/how-to-create-a-monthly-budget/

The earlier we start comprehensive financial planning, the earlier we will be confident to commit to this long-term move.

All the best!

Here is everything about me and what I do best.

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Cedric Jamie Soh
Cedric Jamie Soh, Director at Seniorcare.com.sg
Level 8. Wizard
Answered on 20 Dec 2019

Hi congrats!

I am assuming u guys know each other is marriage material and ready for one another for a great partnered life, congratulations!

If its me, I will go ahead with BTO, because there are YEARS to get a ready to move into condition. You need time to find a decent BTO, apply, and then pray u get the ballot. Unless you are choose less popular but far flung BTO. For popular BTO, chances are you are going to fail fail fail until you get lucky.

Once you got it, you got to wait 2 - 3 yrs then its up, and additional renovation and furniture so you probably have 3 - 4 yrs of period to save up for the big move.

3 to 4 yrs to save up is a good period!

  1. if you take HDB loan, good news is no cash deposit needed. Only CPF. (if ur hdb is not big size, and 2 partners CPF for 2-3 yrs is sufficient) great!

  2. hdb loan 2.6%, much higher than current bank loan of 1.8% now

  3. bank loan requires 25% deposit out of which 5% must be in cash.

  4. Best part of applying when you are young? your income is much lower than 5 yrs later or 10 yrs later, so.. you get more GOVT GRANT which is based on your income level.

Thats is what i would do. you can plan with your partner and see if that works out.

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Hwee Kian
Hwee Kian
Level 7. Grand Master
Answered on 14 Dec 2019

Ultimately, you might want to plan ahead first before applying, although applying at an early age certainly give you the most perks in terms of grant, and time. So for you and your partner, you might want to determine your planned marriage age, then work backwards as it will allow you to know "ideally" when you should apply your BTO (assuming BTO takes 3 yrs to fully build).

E.g. if you and your partner thinks that you want to get married 5 to 6 yrs down the road, then it might be a bit too early if you're applying for your BTO now. Take it slow and enjoy your relationship and romance, take time to build up your career then you will know/devise the right action plan accordingly.

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Isabel Wong
Isabel Wong
Level 6. Master
Answered on 14 Dec 2019

As long as you have decided to get married then yes you should get a BTO as early as possible as there are many benefits:

1) More grants due to lower income

2) More chances at trying for mature estates/an area of your choice

3) It takes a while for a BTO to get ready. This allows you to plan ahead.

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Alexander Kay Wah
Alexander Kay Wah
Level 2. Rookie
Answered on 13 Dec 2019

Start looking for the locations u want early! If both of you have stable income it should be fine.

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Dawn Fiona
Dawn Fiona
Level 7. Grand Master
Answered on 13 Dec 2019

My regret was that I didn't apply for my BTO when we were younger and when our paychecks were smaller. For those who are already sure that you wanna get married, I would personally apply as early as possible to maximise the subsidies you'll get!

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JW
jiajing wang
Level 5. Genius
Answered on 13 Dec 2019

Yes but you have to gauge when youwill be getting married.. You mentioned partner but I am unsure if you are married . Take note that you'll need to submit your marriage certificate within three months from your BTO or resale completion date. If you're applying for the CPF Housing Grant, the timeframe is even shorter – you'll need to submit your marriage certificate during your Completion Appointment with HDB.

And also, both of you must come to this consensus if you are still dating that you will marry each other because this will use up your advantage as 1st time applicant..

Lastly getting a BTO while your salary and CPFs are relatively low affects the no. Of room you could apply.. Use the housing calculator to find out.. If you wait till few years where the combined income of and your partner increases, you might not be eligible for the grant HDB provides

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Choon Yuan Chan
Choon Yuan Chan
Top Contributor

Top Contributor (Jan)

Level 9. God of Wisdom
Answered on 13 Dec 2019

Yes, if romance has already been settled in, getting a BTO as early as possible is ideal. This is because you and your partner's salary is not that high yet and this means you will be eligible for a higher quantum of HDB subsidy, This lowers your fianncial burden

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VC
Vicki Chng
Level 6. Master
Answered on 13 Dec 2019

Hi, have you talked to your partner about it? It's important to ensure that both of you are working towards a common goal and that you see each other in your future.

If that is a yes, then I say go ahead and apply. It's not easy to get if you're trying for mature estate, I tried 5 times over 2.5 years before calling it quits and getting a resale, so it's really about luck!

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