Need Advice: Should I pay off my HDB loan with by CPF?

[peterlth]

Took a 30 years loan when I buy my HDB resale.

Realised that I still have S$100K loan outstanding. When I check my CPF and my wife's CPF, we now just nice have combined 100K in our ordinary account.

Should I simply pay off the HDB loan with our CPF monies?

Or just keep in CPF to learn interest? But I also need to pay interest for my HDB loan.

 

[erection2015]

Do the math la. What kind of interest do you earn and compare that to your cost of borrowing. If your interest earned is greater then dont repay the loan yet.

Took a 30 years loan when I buy my HDB resale.

Realised that I still have S$100K loan outstanding. When I check my CPF and my wife's CPF, we now just nice have combined 100K in our ordinary account.

Should I simply pay off the HDB loan with our CPF monies?

Or just keep in CPF to learn interest? But I also need to pay interest for my HDB loan.

 

[chonburifc]

Took a 30 years loan when I buy my HDB resale.

Realised that I still have S$100K loan outstanding. When I check my CPF and my wife's CPF, we now just nice have combined 100K in our ordinary account.

Should I simply pay off the HDB loan with our CPF monies?

Or just keep in CPF to learn interest? But I also need to pay interest for my HDB loan.

Money not in your pocket is not your money, and that include CPF money? What can you do with your CPF money other than paying for your HDB flat?

You are fortunate to be able pay off your HDB loans as not many people can do it. Do take note there are accrued interest. Basically, it means the amount of interest that could be earned if the CPF money remained in CPF and not used for HDB. And also, you cannot remortgage a HDB flat even if it's fully paid.

I fully paid for my HDB flat in 2005 using my CPF. The first few years feel like shit. After deducting for 3 years, the loan figure like never move. Subsequently, I made a few lump sum CPF payments and the figure start to go down until become zero and go to HDB to collect a piece of old paper (Don't know what the paper called). The document list the previous owners, how long they own, and how much they paid.

In a nutshell, it's not your money or your money but cannot touch, and only can use for HDB, why not repay everything and let this case close. Unless you plan to use it for your kid's education.

 

[middaydog]

don't want to sound too morbid but I heard of couples who try to get the longest loan period they can get in case one of them die then the surviving one will benefit from insurance

 

[Unrepented]

How you pay for the HDB loan interest? Every month pay cash?

What is the interest rate payable?

What is the cpf interest rate?

 

[Khun Ying Pojaman]

go to HDB to collect a piece of old paper (Don't know what the paper called). The document list the previous owners, how long they own, and how much they paid.

It's called the Lease, and it's forms part of your title deeds.

 

[chonburifc]

Not sure about this tactic. How does the surviving one benefit from the insurance? Does it mean that if me and my partner bought a HDB flat with maximum loan period and one of us surrender IC, the survivor will own the whole flat via insurance?

 

[Khun Ying Pojaman]

Not sure about this tactic. How does the surviving one benefit from the insurance? Does it mean that if me and my partner bought a HDB flat with maximum loan period and one of us surrender IC, the survivor will own the whole flat via insurance?

The answer is YES. The insurance will pay off the loan.

 

[chonburifc]

haha, Thanks for the information.

Me really Sua Ku (mountain tortise). Anyway, for what I know, you cannot do anything with this lease. Cannot re-mortgage. This taught me a very important lesson, the HDB doesn't belong to me even if I have paid in full. It still belong to HDB. But I still paid in full as I want to get out of this HDB/home ownership bullshit.

The only thing I can benefit from this HDB pigeonhole is to rent out at at a nice price.

 

[Unrepented]

Can pls tell; What is the name of the insurance policy? Who is the insurer?

The answer is YES. The insurance will pay off the loan.

 

[sta1100]

Pls pay off ASAP, $$$ in CPF you cannot control, please note even you pay off your loan hdb will charge you 2-3 month of your monthly loan amount for Settement

 

[Khun Ying Pojaman]

haha, Thanks for the information.

Me really Sua Ku (mountain tortise). Anyway, for what I know, you cannot do anything with this lease. Cannot re-mortgage. This taught me a very important lesson, the HDB doesn't belong to me even if I have paid in full. It still belong to HDB. But I still paid in full as I want to get out of this HDB/home ownership bullshit.

The only thing I can benefit from this HDB pigeonhole is to rent out at at a nice price.

There are few issues relating to your post.

If I remember correctly, you're not yet 50. You may have used your CPF funds to pay off your HDB loan, which means your HDB flat is charged to CPF Board for the amount "you still owe" CPF Board. Like money owing to a Bank, you cannot deal with the HDB property without consent from the CPF Board.

As for ownership, there are different levels of ownership. A Lease is a form of ownership, but not absolute ownership. You may not have absolute ownership, but you do enjoy some important ownership rights which are not available to the ordinary tenant in a Landlord and tenant relationship. If price of your HDB price appreciates, you're entitled to the profits if you sell the Lease. Even a freehold property in Singapore cannot be deemed absolute ownership because of the prevalence of Land Acquisition Act.

 

[peterlth]

How you pay for the HDB loan interest? Every month pay cash?

What is the interest rate payable?

What is the cpf interest rate?

HDB loan pay by CPF deduction every month. Pay around $700 every month, me and wife combined.

Don't know about the interest rates though.

 

[peterlth]

Pls pay off ASAP, $$$ in CPF you cannot control, please note even you pay off your loan hdb will charge you 2-3 month of your monthly loan amount for Settement

You mean after I pay off the 100K loan with my CPF, I still need to pay a few thousand dollars more for 'settlement'? What is this settlement for? Can I use my CPF to pay this 'settlement'?

 

[Ramseth]

Can pls tell; What is the name of the insurance policy? Who is the insurer?

The policy is called Home Protection Scheme. CPF is the default captive insurer (just like Medishield), but you can choose private insurance companies too. Whichever case, the maximum sum assured is 100% of the outstanding mortgage. You can choose 100% on any one owner or split it any ratio between between co-owners within 100% coverage.

 

[Unrepented]

Thank you for the info.

The policy is called Home Protection Scheme. CPF is the default captive insurer (just like Medishield), but you can choose private insurance companies too. Whichever case, the maximum sum assured is 100% of the outstanding mortgage. You can choose 100% on any one owner or split it any ratio between between co-owners within 100% coverage.

 

[Unrepented]

Depends on many factors i.e. cashflow situation or do you plan to sell and downgrade to smaller flat or pass down to children. Then again, depends on age of the flat etc. etc.

Not forgetting it is a 99 year lease:o And that there is restriction on cpf draw down after retirement age.:o

You just ask one question like that very difficult to answer one:o

Also, are you self employed bo? Your $100k cpf is all inclusive of medisave, srs bo?

HDB loan pay by CPF deduction every month. Pay around $700 every month, me and wife combined.

Don't know about the interest rates though.

 

[chonburifc]

There are few issues relating to your post.

If I remember correctly, you're not yet 50. You may have used your CPF funds to pay off your HDB loan, which means your HDB flat is charged to CPF Board for the amount "you still owe" CPF Board. Like money owing to a Bank, you cannot deal with the HDB property without consent from the CPF Board.

As for ownership, there are different levels of ownership. A Lease is a form of ownership, but not absolute ownership. You may not have absolute ownership, but you do enjoy some important ownership rights which are not available to the ordinary tenant in a Landlord and tenant relationship. If price of your HDB price appreciates, you're entitled to the profits if you sell the Lease. Even a freehold property in Singapore cannot be deemed absolute ownership because of the prevalence of Land Acquisition Act.

Thanks KYP, Correct, I am not yet 50.

The money owed to CPF is known as accrued interest, which means the interest that the CPF account would have earned if the money has stayed in CPF instead of HDB. This mean, unless you don't used a single cent from CPF, anyone who used CPF to pay for HDB will need to pay this accrued interest to CPF. This is what many Singaporeans don't know. Meaning, the more you withdraw from CPF for your HDB flat, the more you need to pay for the accrued interest. And when you sell the flat, the accrued interest will be debited back to the CPF.

The price of my HDB flat is now 3.5 times the value I purchased. I have rented it out but recently, friends suggested me to sell away this property and apply for a new one and then rent out the new one. Still considering.

 

[Khun Ying Pojaman]

T
The money owed to CPF is known as accrued interest, which means the interest that the CPF account would have earned if the money has stayed in CPF instead of HDB. This mean, unless you don't used a single cent from CPF, anyone who used CPF to pay for HDB will need to pay this accrued interest to CPF. This is what many Singaporeans don't know. Meaning, the more you withdraw from CPF for your HDB flat, the more you need to pay for the accrued interest. And when you sell the flat, the accrued interest will be debited back to the CPF.

No, I'm not referring to accrued interest. I'm referring to the Principal taken out from your CPF account to pay off HDB. You must owe them a principal amount before accrued interest can come into the picture.

If you're past retirement age, and you still have enough in your CPF account to satisfy the minimum sum, your CPF charge will be removed from your Lease document.

 

[krafty]

my personal preference will be to pay up and forget about monthly instalment.Anyway, CPF ordinary account is meant for housing purpose.