Financing/Payments: resale HDB flat

This research is accurate as at 19 May 2017 (see also the respective dates of the sources). It relates to the Singapore context. (Singapore is an island city-state at the tip of peninsular Malaysia in Southeast Asia).

The list of costs is bewildering. To bring things to life, I shall focus on a hypothetical example from 99.co guides: Everything to know about paying for a resale flat. (20 Sep 2016) by Zareen B. You may also refer to the site for the example of the bank loan model purchase. [For accuracy, I shall indicate cross references as far as possible.]

The case study focuses on a young married couple with total monthly income of $6k (where $1k = $1000). They hold $20k in their CPF accounts; possessing access to a $30k Family Grant. Valuation of their desired 3 room HDB resale equaled the sale price ($400k) therefore no (additional) COV (Cash-over-valuation)^ is needed for payment. The approved HDB Loan would limit its financing to 90% of the purchase price under a 25 year timeframe.

Grant of Option/Booking fee [cash] – $1k

Valuation fee [credit card] – $199.25 (lower price for 1/2 room flats – see Costs and Fees: Resale from HDB, updated 23 Aug 2016.)

Deposit [cash] – $4k (Grant of Option and Deposit total not more than $5k)

Resale application administrative fee [credit card] – $80 (lower price for 1 or 2 room flats – see Costs and Fees: Resale from HDB, updated 23 Aug 2016.)

Initial Payment [CPF] – $40k (10% of purchase price; first payment is higher for bank loan financed purchase)

Stamp duty on option [Cash/CPF] – $6.6k [See Inland Revenue Authority of Singapore (IRAS). Buyer’s Stamp Duty (BSD), updated 18 May 2015.]

Stamp duty on mortgage [Cash/CPF] – $500 [See IRAS. Mortgage Duty, updated 3 Jul 2015.]

Conveyancing fees [Cash/CPF] – $1,009.01

Lease in-escrow registration fees [Cash/CPF] – $38.30

Mortgage in-escrow registration fees [Cash/CPF] – $38.30

Caveat registration fees [Cash/CPF] – $128.90

Title search fees [Cash/CPF] – $10.40

Home protection scheme [Cash/CPF] – $241.56 (annual)

Fire Insurance [Cheque] – $4.50

Balance of purchase price [Loan/CPF/Cash] – $355,000

Total – $408,850.22

Post deduction (of Family Grant + HDB Loan + CPF), the couple still has to fork out $3,850.22 in cash.

Further sites for research/reference:

Buying a home. (7 Dec 2016). http://www.moneysense.gov.sg/Life-Events/Buying-a-Home.aspx. MoneySENSE. Monetary Authority of Singapore.

Ability to Pay. (no date). http://www.hdb.gov.sg/cs/infoweb/residential/financing-a-flat-purchase/step-by-step-guide-to-financial-planning/ability-to-pay. Housing Development Board. Singapore. Having a home property according to the HDB would among other things, entail monthly bills for:

  • Cash payments for housing loan instalments
  • Service & Conservancy Charges
  • Utilities and services bills
  • Insurance premiums

Adam R. (4 May 2016). 3 questions to ask when buying resale HDB for the first time. https://www.99.co/blog/singapore/resale-hdb-for-the-first-time/. 99 Pte Ltd.

[The site lists 9 steps]. Resale HDB flats: How to buy. (27 Jan 2016). https://www.ecitizen.gov.sg/Topics/Pages/Resale-HDB-flats-How-to-buy.aspx. Government of Singapore.

Channelnews Asia. COVs fall to zero for first time since 2006: SRX. (6 Mar 2014). http://www.todayonline.com/singapore/covs-fall-zero-first-time-2006?singlepage=true. TODAY.

^Ong Hwee Hwee. (10 Mar 2014). Singapore Budget 2014: 5 things about cash-over-valuation or COV. http://www.straitstimes.com/singapore/singapore-budget-2014-5-things-about-cash-over-valuation-or-cov. The Straits Times.

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The Learning Brain (2013) – Notes

The said book is authored by Swedish neuroscientist Torkel Klingberg. It was published by Oxford University Press. A selected summary/note record is presented.

Chapter 10 – exercise enhances cognitive performance.

Chapter 1 – A method raised by University of Toronto cognitive neuroscientist Rosemary Tannock involved equipping students afflicted by weaker working (short term) memory with earphones or screentop desks to minimise distractions and excess attention expenditure.  Instructions were kept short (similar to the assistance of dyslexic students).

Chapter 4 – The research of American psychologist Robert Bjork (UCLA, US) on 700 human subjects suggests that the ideal revision interval is 1-4-10 (1st, 4th, then 10th day). [But as Klingberg alluded to, 700 is hardly a massive sample size. He also points to the fact that detailed research has been precluded by the silos and boundaries between psychology, neurobiology and pedagogy. If further study is conducted and applied to education, it may make the learning process more efficient]. ‘Self-testing’ seems to be optimal as opposed to other nonactive methods.

One example of such learning is (Pole) Piotr A. Wozniak. He wrote the computer programme SuperMemo (details on p. 45 of the book, and at the site for Wozniak’s Biodata, last update 2 Jan 2014).

Other references:

Chapter 8 review on Neophyte Writers (WordPress).

Financing a flat (S’pore) – Unemployment strikes!

If you are able to, do read more from https://www.99.co/blog/singapore/, which is a housing/property site for Singapore. There is one interesting post on rental discrimination – Your wife is Indian, landlord won’t rent to you. (28 Jul 2016). The post was earlier referenced on TechinAsia (18 Jul 2016).  (The 99co site is quite beautiful as well if I may add).

Alas, I have to return to the topic. It is the opinion of Ryan Ong (9 Dec 2016) – Unemployment woes: What happens to the HDB flat if you’re out of a job, the best bet is to: “Build your emergency fund, and pay for the mortgage insurance.” The aforementioned fund should minimally be 6 months worth of mortgage repayments. (Gasp!)

If for some reason you are unable to pay, there may be:

  • temporary deferment of mortgage – in some situations this means lengthening the loan payment duration (it seems even the banks desire this step compared to foreclosure)
  • special allowance from the Housing Development Board (HDB) to rent out a room
  • HDB efforts to get you downsized
  • an option where you get your working children to co-own the house so that they can help finance it
  • the operation of the Home Protection Scheme (HPS) when the owner/payee dies or is permanently incapacitated/terminally ill