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2. Next is the option fee. For a 2-room flat, it is S$250 (http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyingNewFlatOptionFee?OpenDocument). This is 25% to a $1,000 per month income earner. For a low income earner, parting with 25% of his monthly income may be something he is unable or unwilling to do.
3. Next is the down payment. If you are taking a housing loan from HDB or not taking any loan (practically not possible for low income earners), the downpayment payable is 10% of the purchase price. Now, we are not quite sure what the purchase price of a subsidized 2-room flat really is. It could be reflected as (i) S$40,000 or (ii) S$100,000 with a subsidy of S$60,000.
The down payment for the former price would be S$4,000 and S$10,000 for the latter. Although it is stated that this downpayment can be deducted wholly from CPF, it is highly doubtful for a low income earner to have such a sum in his CPF ordinary account. I will come to CPF contributions in a while. If the buyer chooses to finance through a bank loan, he will have to pay 5% in cash (either S$2,000 or S$5,000) and 15% in CPF and/or cash combination (S$6,000 or S$15,000).
Now, even before we talk about loans, let us not forget that HDB has an application form called HDB Loan Eligibility (HLE) ... more...
- http://www.tremeritus.com/2012/03/1...00-affording-a-2-room-flat-–-fact-or-fallacy/
3. Next is the down payment. If you are taking a housing loan from HDB or not taking any loan (practically not possible for low income earners), the downpayment payable is 10% of the purchase price. Now, we are not quite sure what the purchase price of a subsidized 2-room flat really is. It could be reflected as (i) S$40,000 or (ii) S$100,000 with a subsidy of S$60,000.
The down payment for the former price would be S$4,000 and S$10,000 for the latter. Although it is stated that this downpayment can be deducted wholly from CPF, it is highly doubtful for a low income earner to have such a sum in his CPF ordinary account. I will come to CPF contributions in a while. If the buyer chooses to finance through a bank loan, he will have to pay 5% in cash (either S$2,000 or S$5,000) and 15% in CPF and/or cash combination (S$6,000 or S$15,000).
Now, even before we talk about loans, let us not forget that HDB has an application form called HDB Loan Eligibility (HLE) ... more...
- http://www.tremeritus.com/2012/03/1...00-affording-a-2-room-flat-–-fact-or-fallacy/
