Asked by Anonymous

We are a couple in the talks of settling down and we are at lost when it comes to housing. How can we afford a condominium? How should we go about the savings?

One of us has a condominium under the name (actually the parents' property) so we are out of the running for BTO and EC. We are left we no choice but to look at private properties.

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  • Julie Tan
    Julie Tan
    Level 3. Wonderkid
    Answered on 22 Jan 2019
    1. You will need to talk to the banks on how much $ you can borrow.

    a) If one of you is holding the property in name AND the housing loan, this is going to affect your TDSR of 60%, there will be a limit to what the bank can lend. Talk to a few banks, they can advise you on your combined borrowing power as a couple.

    b) If one of you is holding the property in name BUT no housing loan, good news, less restrictions, you can borrow more $, you might even be able to leverage on any rental income this property is generating to borrow more $. Just that, the killer is the ABSD.

    With this information, then you can set a budget and decide on what type of private property you can afford.

    • The total property price - bank loan = more than 25% of the property price, this is what you need to pay in cash to afford your private property + 12% ABSD, (3% +1% stamp duty)

    • if, The total property price - bank loan = less than 25% of the property price, you will need to have at least 25% of the total property price in cash for downpayment + 12% ABSD, (3% +1% stamp duty)

    All these require some math and if the sum is too large for your combined savings to handle, then this plan may not work out as other costs e.g. renovations (will need cash upfront), wedding, furnishings require cash.

    After these extensive calculations, you might want to speak to both sets of parents to see if they are willing to lend you all some $.

    1. With your budget, check on property guru/engage a property agent and discuss with your partner on:

    an older but larger unit

    OR newer but shoebox size to 1-2 bedroom unit

    There are small condominiums ~1 bedroom going at 500-700K.

    In areas that are cheaper, older 2 bedroom condos can be ~800K.

    If the above does not work out, probably have to consider other alternatives: (a) live with either set of parents

    (b) sell this private property to get your own private/BTO/EC/Resale

    (c) negotiate to stay in this property in the meantime

    (d) offer to buy over the current private property

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  • Loh Tat Tian
    Loh Tat Tian, Ex-Financial Advisor, Founder at Singapore Insurance Value Finding
    Level 6. Master
    Answered on 02 Jan 2019

    There are a few queries required before anyone can help. You might want to update the following first

    1) What is your TDSR (total debt servicing ratio)?

    2) Does the 1st property have any outstanding loan or fully paid up?

    3) For Condos, the budget range is from 800k (small 2 room apartment) to 1.2mil (for 3 room etc at pasir ris more ulu kind) ro even 3 mil (CBD area).

    4) Most loans are pegged to 10X your salary based on the borrowing figure allowed. And repayment is tagged to TDSR.

    Finally, I can't help much as I am not a property agent, hence did not deal with private Condos (I bought HDB). I am asking more so that the professionals can help answer.

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  • Gabriel Tham
    Gabriel Tham, Kenichi Tag Team Member at Tag Team
    Top Contributor

    Top Contributor (Apr)

    Level 8. Wizard
    Answered on 02 Jan 2019

    Perhaps the one who has the property under the name can "sell" the property back to the parents. Meaning, the parents will take full ownership of that property.

    Then, you both can qualify for BTO after a cooling period.

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    • Question Poster
      By transferring the ownership back to the parents, they'll incur the heavy stamp duty. And the cooling period is 2 years, meaning we'll only get to have the BTO itself 7 years later (assuming we win the ballot on the first try), which is too long. As mentioned, we are left with no choice but to look at private properties and are looking for advice on how we can go about it through savings / investing (e.g. how much should we be saving, how can we maximise our money now).
      02 Jan 2019
    • Gabriel Tham
      If private is really the ONLY choice, then you have to pay the ABSD likely 12% of the property purchase price. And at least 10% of the price in downpayment. So if you are getting a $1mil property, its roughly $220 in cash. Aside from that, you need to check the TDSR and how much banks can loan to you.
      02 Jan 2019
  • Yixiong Chang
    Yixiong Chang
    Level 5. Genius
    Answered on 22 Jan 2019

    There is no other way but to discuss this issue with the parents first since it is theirs property. The fact that they got into this arrangement without considering the consquence, they should be 'partly' responsible. =D I believe they did this property for investment to avoid the absd?

    It will be best if the parents are willing to sell the property. Thereafter u can get a hdb resale instead since the waiting period to get a new hdb is too long for u.

    Or unless the parents are willing to support (financially) in purchasing the property. And allow the property to be held in your/spouse name (the other person without property to his/her name).

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