There are 3 Types of Finances.
Must Know Your Finance.
In order to finance the new launch condo in Singapore, it is important to plan your finance before making any purchase of the property. There are 3 types of finances : Cash, CPF & Loan to be used for the property purchase.
1) Cash.
To make a purchase of a new launch property, it is mandatory to come out with 5% as booking fee. It can be only in the form of Cheques, Cashier’s Order or Telegraphic Transfer. This amount will be addressed to developer’s project account.
2) CPF OA Fund.
CPF fund refers to The Central Provident Fund. It is a compulsory comprehensive savings and pension plan for working Singaporean and Permanent residents primarily to fund their retirement, healthcare, and housing needs in Singapore.
CPF contributions go into 3 accounts:
-Ordinary Account (OA): For housing, insurance, investment and education
-Special Account (SA): For retirement income and retirement-related investments
-Medisave (MA): For hospitalisation expenses, approved outpatient medical care, and approved medical insurance.
Among the 3 accounts, only Ordinary Account (OA) fund can be used for part of the downpayment in the property purchase. In order to finance the new launch condo using the CPF, the purchasers will need to have the loan approval ready.
3) Loan.
It is important to know that the maximum Loan-To-Value is 75%. This means the maximum loan that the purchases are able to obtained is 75% of the property price.
The loan tenure is maximum until 65 years old, if the purchasers are going to get up to 75% of the loan.
Whether the purchases are able to get the maximum of 75% loan, this depends on their income level.
Usually we will advice customer to get an IPA (in-principle approval) from the bank, so that they know how much the bank will loan to them.This IPA is free and it will last for a validly of 3 months.
Contact
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