PFF Panel 3
Seedly PFF 2019
Asked by Anonymous
Asked on 02 Mar 2019
Hey! It's hard to advise for your question without understanding your specific financial position.
However, when it comes to property affordability, consider the 3-3-5 rule and you will be very safe.
3 - Your monthly mortgage should not exceed 30% of your monthly income
3 - Your initial capital should be at least 30% of the purchase price
5 - Purchase price should not exceed 5 times of annual income
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Cash Proceeds = Sale of BTO - Outstanding Loan - CPF used - CPF Accrued Interest.
BTOs in the market today experience decent capital appreciation right after MOP, i.e. Buangkok Vale owners have profited over $100K
This makes it easier for them to upgrade to a condo without tapping on their savings. Simply because,
Purchase of condo:
75% loan -- 25% Downpayment
Buyer's Stamp Duty
Additional Buyer's Stamp Duty
Can be covered with the Cash/CPF proceeds.
What's important also is your future mortgage payments, which can be calculated through the TDSR (which is limited to 60% of your income) and lastly,
how long you can survive in your property assuming that you lose your job and use mainly your CPF to cover the remaining mortgage.