Home Loan Repayments can now stretch to 50 years

[Mdm Tang]

Meaning HDB is going to cost 1.5mil very soon.

meaning when the downturn come banks will not

be hit so badly ...

 

[Papsmearer]

What a crispy summary of PAP's modus operandi !

I think I am the only one that see it. Very sad.

 

[Prometheus888]

I think I am the only one that see it. Very sad.

Borther I see that with you as well.

I am not buying anything in sinkieland because come 20 or 50 years from now there may not be a sg anymore....

i am putting my money to work elsewhere with some sustainbility and less bullshit....

 

[Bigfuck]

Actually this has been happening in Japan and Europe. Not a good idea.

Kanina! Go take triple dose of medicine now! It will either alleviated your mental condition or make you not have to worry about being mad anymore! Japan and Europe are different. And more IMPORTANTLY FOR THE KANINA spokesman, SGP will enjoy appreciation of property values like crazy! Singaporeans can die in a million dollar HDB man! You feel rich looking at the property valuation report! Wah lan! Bank account low never mind. Can reverse mortgage your hdb for S$300K! That is still more than you useless old SGPs can generate. Not happy? Go work at macdonald's We will have the most precious commodity in SE Asia and the world. Millions will flock to work in and for Singapore! We will be even richer thant Qatar GDP per capita by 1.5 times! The young lazy SGP grandchildren must work hard as there is no free launch to pay for their precious property asset passed down by their hardworking grandfather. THIS WHAT YOU ARE SUPPOSED TO SAY, KANINA!

 

[gz0707]

Actually, the debt structure is largely irrelevant in singapore. Taking the example of HDB housing, in which most singaporeans live in. U can take 25, 30, 40 year mortgage, it matters not. HDB has no intention of ever fulfilling its 99 year lease to you. In fact, just looking atthe construction quality of the HDB flats, u know they will not last 99 years. The HDB's real intention is to keep u on the hook for the rest of your life. Lets say u buy a new flat and sign a 30 year mortgage. After living in it for 20-30 years, maybe even less, the HDB will come along and say that they want to tear your block down. But they will offer you a new flat at another estate and give u priority choice, but since the new flat is more expensive than your old flat, u must top up money for this flat. Hence, after u have paid off your original flat, u now have to incur a new mortgage for a flat u never wanted in the first place. Hence how long your amortization period is, is irrelevant.

The debt component is relevant to the buyer as a long term loan can add to the overall loan. On a large and long term loan, the first 5 or 10 years are mainly paying off the interest component, unless it is quickly flipped or paid off (highly unlikely). based on the principal amount, this could come up to 20% easily.

The replacement flat comes under SERs as HDB commonly calls it. If its a one to one exchange (same size), the owner only has to come up with renovation fees, esp if its a brand new flat with no furnishings - this is an added burden, esp on retirees. I have seen old ladies with little or no family support living out their remaining years in an old flat - where will they get the extra money? This can easily come up to 20k.

 

[Prometheus888]

Just think about it. If a retired couple have only their 3 room flat to their name and the remaining monies which they had saved many years ago for retirement (which might be fast running out due to the outpacing of inflation vs the real income) and here comes the hdb "upgrading"...they are basically screwed...you can't refuse to "enbloc"... you have to find somewhere to live ... it sounds like what they do to those original hawkers who have no cash to sustain the hawker centre's upgrading and new rental charges so end up "transferring" (which has since been outlawed) the stall for a fee and then hoping to retire with that....

life is harsh... and with heartless types running the govt... might get even harsher

 

[gz0707]

Just think about it. If a retired couple have only their 3 room flat to their name and the remaining monies which they had saved many years ago for retirement (which might be fast running out due to the outpacing of inflation vs the real income) and here comes the hdb "upgrading"...they are basically screwed...you can't refuse to "enbloc"... you have to find somewhere to live ... it sounds like what they do to those original hawkers who have no cash to sustain the hawker centre's upgrading and new rental charges so end up "transferring" (which has since been outlawed) the stall for a fee and then hoping to retire with that....

life is harsh... and with heartless types running the govt... might get even harsher

Exactly, now you got it. To the well educated forummers, they do not understand the cash situation that the residents have. They only look at the location, eg Jalan Kukoh, Redhill and see the potential property value, because it is close to city. They do not see the poorer folks who have stayed there for past 30 to 40 years, and now at the bottom of the middle class or have dropped out of it. On top of that, they now have health problems, compounded by lack of children supporting and looking after them.

 

[chonburifc]

Exactly, now you got it. To the well educated forummers, they do not understand the cash situation that the residents have. They only look at the location, eg Jalan Kukoh, Redhill and see the potential property value, because it is close to city. They do not see the poorer folks who have stayed there for past 30 to 40 years, and now at the bottom of the middle class or have dropped out of it. On top of that, they now have health problems, compounded by lack of children supporting and looking after them.

Their children can't even look after themselves. FUCK the PAP!

 

[Papsmearer]

The debt component is relevant to the buyer as a long term loan can add to the overall loan. On a large and long term loan, the first 5 or 10 years are mainly paying off the interest component, unless it is quickly flipped or paid off (highly unlikely). based on the principal amount, this could come up to 20% easily.

The replacement flat comes under SERs as HDB commonly calls it. If its a one to one exchange (same size), the owner only has to come up with renovation fees, esp if its a brand new flat with no furnishings - this is an added burden, esp on retirees. I have seen old ladies with little or no family support living out their remaining years in an old flat - where will they get the extra money? This can easily come up to 20k.

This is wishful thinking. Your SERS compensation information is wrong. HDB will not give you a one for one same size exchange. That was the old policy. Under the old policy, They determined a one for one based on the number of rooms in your flat. In other words, you exchanged your 4 room for another 4 room in a new estate. But most people based their personal choice on actual sq. footage of their flat. In other words, the new 4 room flat they got exchanged for could be 10% smaller than their old 4 room flat. SO, they end up opting to get a 5 room flat to stay in the same sq footage they are used to. That's when the HDB will ask them to pay more because a 5 room cause more than a 4 room. Plus reno costs will not be $20K that you mentioned. At least $50K is minimum, with many people I know paying $100K and more.

The new policy of the HDB is to pay you "market value" for your flat went they take it back. U are at their mercy what this "market valaution" will be. Than you are supposed to use their compensation to buy another flat. They will give you first choice of the new flat, or BTO. Given the sharp rise in prices for new flats, the money they compensate you with may not buy the flat that you want. HDB freely admits this and advices people to take out a new bank loan. In fact, they recommend seniors to buy a studio if available. Than of course, there is the reno costs mentioned above. In the end, there is no surprise if you borrow $100-$200K for another new flat. mortgage.

Therefore, going back to my original argument. If you had bought a flat for $150K 20 years ago, maybe you have 5 years left on the original mortgage. Guess what? After SERs, you now have a new mortgage for $100-$200K, with another new 25 year amortization. Therefore, the original mortgage you have regardless of whether its 25, 30, 40 years is irrelevant. U will never get to pay it off. The only way to solve this is tru penalty free partial capital repayment.

 

[Jumong]

HDB freely admits this and advices people to take out a new bank loan.

should be 'advises'; 'advice' is a noun.

Some serious thinking. If your HDB flat is fully paid and you have the option to live overseas, would you sell your HDB flat ? Or would you prefer to keep and rent out your HDB flat for some passive income ?

 

[Prometheus888]

should be 'advises'; 'advice' is a noun.

Some serious thinking. If your HDB flat is fully paid and you have the option to live overseas, would you sell your HDB flat ? Or would you prefer to keep and rent out your HDB flat for some passive income ?

Keep it to rent out because your CPF 9which is as good as gone) could at least be put to some use and you can still use the flat to recover back some of it.....

 

[chonburifc]

Keep it to rent out because your CPF 9which is as good as gone) could at least be put to some use and you can still use the flat to recover back some of it.....

Good advice and probably the only way to recover some cash from the CPF ponzi scheme.

Will probably take another decade to recover back all but at least this is real cash and I feel rich looking at the BANK statement, not the CPF statement.

 

[Prometheus888]

Good advice and probably the only way to recover some cash from the CPF ponzi scheme.

Will probably take another decade to recover back all but at least this is real cash and I feel rich looking at the BANK statement, not the CPF statement.

I would only be afraid that they pull their enbloc dirty trick and force you to pay for a more expensive new one then this plan haywire.

 

[chonburifc]

I would only be afraid that they pull their enbloc dirty trick and force you to pay for a more expensive new one then this plan haywire.

Hehehe. Enbloc even better, Will sell to those will are willing to pay a premium for the location. Cash out all the money component and reapply for another flat using CPF. And rent the new flat out again.

 

[chonburifc]

Hehehe. Enbloc even better, Will sell to those will are willing to pay a premium for the location. Cash out all the money component and reapply for another flat using CPF. And rent the new flat out again.

Disclaimer: Above only work if you are debt free and have no outstanding loans to whatsoever.

 

[neddy]

Japan was the first country to offer "generation" loans whose liability payments are passed to whoever inherits the property or the bank simply seizes the property. No need insurance. The loan to value ratio will be based on forecast and there will be a buffer. The Japanese had to do it because Tokyo prices was just too high.

Unfortunately such loans allow people to buy bigger property and become debt laden. The only consolation is that property prices generally trends upwards. Feel sad for the young. Till today the US is a model for home ownership where a decent home with land in good suburbs are affordable for new starts and the interest is tax deductible to encourage home ownership. The sub-prime did not screw home owners, it screwed those who held the instruments and held stocks in banks. There were a few greedy ones who got screwed with trying to game the market by signing on honeymoon rates.

Malaysians too can afford decent homes.

Wee Cho Yaw has always made good money from his housing portfolio.

It is difficult to get out of the debt trap, Japan is unable to bootstrap itself out of their debt trouble.
For once, the govt is doing something that they should have done 5 years ago, acknowledging that they are going to be the next Greece.

Sooner or later, they will have to raise taxes. See who dare to bell this tax tiger!

Australia is heading for the same debt crisis, the only consolation is that they are able to devalue their currency. Or they can follow the UK into the same debt abyss* by dropping interest rate.

* Check Singapore property prices, central monetary bank interest rates and inflation rates.

 

[Jumong]

I would only be afraid that they pull their enbloc dirty trick and force you to pay for a more expensive new one then this plan haywire.

This is precisely where I'm coming from. My flat is 21 years old.

 

[Jumong]

Hehehe. Enbloc even better, Will sell to those will are willing to pay a premium for the location. Cash out all the money component and reapply for another flat using CPF. And rent the new flat out again.

I think you may have mixed up HDB enbloc with private condo enbloc. HDB enbloc there is no "premium" to speak of. HDB will pay you "market value" and guess who is the valuation agent ?

 

[chonburifc]

I think you may have mixed up HDB enbloc with private condo enbloc. HDB enbloc there is no "premium" to speak of. HDB will pay you "market value" and guess who is the valuation agent ?

Not from hdb. From buyer

 

[Jumong]

Not from hdb. From buyer

Understand. But in the case of private condos the prices offered by the incoming developer can be negotiated, and more often than not, the prices offered would be higher. With such expectations, opportunistic buyers will rush to purchase your soon-to-be enbloc private condo, i.e. buy low sell high. But with HDB, and knowing HDB would only pay you their own valuation of the market price of your HDB flat, I doubt if there is any incentive for opportunistic buyers to make the rush.