Are you looking for your dream home? Considering moving to another location? or thinking of investing in a real estate now? This is probably going to be one of your biggest assets that you are going to acquire. There are a few factors that you may wish to consider before you act.

To Buy Or To Rent?

Buying and selling cost money. If you potentially have to move in and out in short terms, your profit & proceeding may not be sufficient to cover the costs of selling and buying. A general guideline will be that if you intend to stay in the location for at least 3~4 years, it would justify yourself to purchase a home, otherwise if your intention of residency is only less than 3 years, it is more feasible and cost effective to rent a house instead.

Projecting Your Future Needs

Are you expanding your family in the next 5 years? Do you require a bigger house or more rooms in catering for future family growth? What featues of the house do you need to satisfy your lifestyle now? How about social needs 5 years down the road?

Setting your Budget (Needs vs Wants)

How much are you willing to pay for your dream home? You need to strike a balance between what you love to have (WANTS) and what are the necessities that you must have (NEEDS). Higher floor will command a higher margin as compare to lower floor, nearer to town centre or/and train station will definitely cost more, spectacular & scenic view will post a bigger proce tag than a no view unit, etc. Do you really require high floor? Is close proximity to town centre or train station is a must? It is utmost important that you established a budget and purchase criteria before you engage your gear in house searching, otherwise you could be scouting through the entire Singapore for many months yet unable to secure your dream home

Losing Your Dream Home To Another Competitor Buyer

You may be able to find another cheaper house, but you may not find another dream home. Indecisiveness could cost you significant regret later. Once if you have found a dream home that meet your budget and criteria, do not hesitate and act fast. A decision not made could prove to be a dream lost.

Your Financial Health & Feasibility

How is your financial health? What is your present Total Debt To Income Ratio? A ratio of 40% or below against your income is recommended to maintain a healthy threshold. However, depending on your holding assets, job stability or business potential, and other factors, you may wish to push your threshold higher accordingly.

Restriction of Foreign Ownership

Since 1973, the Singapore Government has imposed restrictions on foreign ownership of private residential property in Singapore. Such ownership is governed by the Residential Property Act that are restricted from purchasing:

• Vacant land
• Landed residential property, such as bungalows, terrace houses, semi-detached houses; and
• Residential property in a building of less than 6 levels.

Other restriction on foreign ownership of properties includes:

• Public Housing of HDB (Housing Development Board), both purchase directly and resale.
• HDB shophouse.
• Executive Condominium of less 10 years in age.

Initial Cost of Private Property Purchase

Below listed are the initial cost outlay that you would require before you purchase a real estate.

1. 5% cash of selling price for the down payment of the property.
2. 15% cash plus/or CPF Ordinary Account amount minimum, in excess of total home loan amount (i.e. 80% of property evaluation value or purchase price, whichever is lower) approved by financial institution.
3. Stamp Duty - S$5,400 plus 3% of purchase price in excess of $360,000 (please refer to Sales & Purchase Procedure for details). Pay cash first then re-imburse with CPF later.
4. Legal Fee of 0.8~1.5% of property purchase price. Cash or CPF eligible.
5. Mortgage Transfer stamp fee of maximum S$500.
6. Cash outlay of difference if your property purchase price is higher than valuation price from financial institution. (e.g. If you bought at $1 mil but bank valuated at only $900k, you need to top up the difference of $100k with cash)
7. Bank Valuation Fee - usually absorbed by financial institution.

Recurring Costs of Maintenance For Private Property

Besides your monthly home loan repayment amount, there are other costs that you need to consider as well.

1. Property Maintenance - For private condominium there will be $200~$1,000 of facilities maintenance charge. Whereas for landed property you will be liable for all upkeeping costs within your land area.
2. Property Tax - 10% of estimated Annual Value of the property. However, down to 4% only if you are owner occupier.
3. Fire Insurance & Mortgage Insurance.

Want to know more about buying procedure? Visit my Sale & Purchase Procedure page now...

All ready? Get set... Go for it!!!

Still have doubt? Not clear? Need further explanation?

Please feel free to contact Ronnie Chong

Written & Edited by Ronnie Chong