Nobody dives straight into applying for a new Build-To-Order (BTO) flat without checking out their finances. It is not only commonsensical to do so, but also makes for good money sense in the long run.
Check out this quick guide to see how much you would need and other expenses to factor in, so that you are well prepared.
1. Price of the BTO flat and housing grants
If you want a better chance of getting a flat, consider applying for a flat in a non-mature estate. Flats in non-mature estates are generally lower priced than those in mature estates, and buyers may be eligible for more housing grants.
For instance, in the February 2018 BTO exercise, the typical price of a 4-room flat in Choa Chu Kang is $295,000. A young couple who earns a total income of $4,400, can enjoy an Additional Housing Grant of $10,000, as well as a Special Housing Grant of $40,000. They will not be able to enjoy this grant if they had applied for a bigger flat or a flat in the mature estate.
Together, these grants bring the price of the flat down by about 17% to $245,000.
The typical price of a 4-room flat at Teck Whye View is $295,000
2. Downpayment and housing loan for the balance purchase price
You will also need to set aside CPF and cash savings to make the downpayment for the flat.
If you choose to take an HDB Concessionary Housing Loan, you will need to make a down payment of 10% of the purchase price. For those who are using a bank loan, you will need to pay a down payment of 20% of the purchase price, of which, at least 5% must be in cash. Do note that the Option fee (ranges from $500 to $2,000) that you pay upon booking of flat, will form part of the down payment too.
In the case of a 4-room flat in Choa Chu Kang, assuming that the young couple took up an HDB Housing Loan, they will need to pay a 10% down payment of $29,500. Taking into account the housing grants and down payment, the remaining $215,500 can be financed via the HDB Housing Loan. This will work out to a monthly instalment of about $978, which the couple can pay using their CPF monthly contribution, without cash outlay.
Taking into account the income, savings, housing grants and eligible housing loan, the couple can service the monthly instalments of the flat without any cash
3. Legal fees and stamp duties to complete the flat purchase
As every home purchase involves legal processes and paperwork for property ownership, there are other fees payable to complete the flat purchase. These include:
- Stamp duties on Agreement for Lease and Deed of Assignment. These fees are payable to Inland Revenue Authority of Singapore.
- Caveat registration fee of $64.45, which is payable to Singapore Land Authority to protect your interest in the flat
- Legal fees. If you appoint HDB to act for you, the estimated legal fees can be calculated here
- Survey and registration fees during key collection
Fees are required for legal processes and paperwork to complete your flat purchase
4. Renovation and home insurance
The amount to spend on renovation and furnishing depends on your preferences and budget. But, if you wish to save on some renovation costs, check out these tips!
To protect your home, you should also consider getting home insurance policies. These include fire insurance, as well as the Home Protection Scheme if you are servicing your monthly instalments with your CPF monthly contributions.
Costs of renovation and home insurance are some additional aspects to consider when you work out your home budget.