Deciding to buy an HDB BTO flat is one of the most important things that just about any Singaporean out there can do in life. If you have decided to buy one of these flats, then it is pretty safe to say that you have made a great decision because it means that you have started thinking like an adult for real this time. With this in mind, here are some of the CPF changes to buying HDB that you need to know if you would like to obtain a successful BTO application and buy your very first HDB BTO flat in Singapore!
Check Your Eligibility
If you are 100% sure that you want to buy an HDB flat in Singapore, the very first thing that you need to do is check whether or not you are allowed to do it. To buy an HDB flat, you have to be a citizen who is applying with at least one other citizen or PR as a family nucleus. What this means is that you should apply with both your spouse and your kids (if you have any), your parents and siblings (once again, if you have any), or children who fall under your legal custody (but only if you are a widowed or divorced applicant).
You can also apply with your fiancé, but if you are planning on doing it this way, then you should be prepared to register your marriage before moving into your flat if you are applying for additional housing grants or if you are going to apply within three months of taking possession of your HDB flat. Also, it is possible for you to apply if you are at least 35 years old, but this regulation only works if you are applying for a 2-room flat that is located in a non-mature estate. You can also be a single citizen who is at least 35 years old and who is applying for a flat with a maximum number of three other co-applicants. Once again, this regulation only works with 2-room flats that are located in non-mature estates.
And on top of that, it is also important for you to ensure that you are not making too much money to qualify for that BTO flat that you have always been dreaming of. In addition to all of this, you also shouldn’t own any other property in any part of the world.
Ballot For Your HDB Flat
Once you have made sure that you are eligible for an HDB flat in Singapore, the next step is to ballot for it online. When you stumble upon something that seems particularly interesting to you, you can ballot for it by paying a small fee of just $10. You need to wait for about three weeks to find out whether or not your balloting attempt was a successful one.
Obtain an HDB Loan
Now that you have found an HDB flat that you would like to have, it is a great time to start looking for someone who could lend you some money to finance it. There are two different options for you to choose between here — you can either go for a bank loan or for an HDB loan. Keep in mind that if you decide to go for a bank loan, your best move would be to try and get approval in principle from your bank. However, if you decide to go for an HDB loan, make sure to apply for an HDB Loan Eligibility letter.
Choose Your HDB Flat and Pay the Option Fee
Your queue number is what determines your priority when it comes to choosing your flat unit. That being said, if your queue number is way out there, there is a good chance that you won’t be able to get your hands on that HDB flat that you have always dreamt of, which means that you will have to ballot once again.
When it comes to showing up at HDB Hub to book your HDB flat, make sure to bring both your IC and your income documents with you. If you have decided to take your housing loan from the HDB, then you should also bring your HLE with you. Once you have decided which type of HDB flat you want, feel free to start the purchase process by paying an option fee right there and then. This option fee is worth $2,000 for 4-room or larger flats, $1,000 for smaller, 3-room flats, and $500 for 2-room flats.
Sign the Lease Agreement
Signing the lease agreement should always be done within four months of booking an HDB flat. Once you have signed the lease agreement, you will then need to take care of all the downpayment, stamp duties, and legal fees, and you should do it on the exact same day you signed the lease agreement. If you have opted for an HDB loan, you will have to pay 10% of the original purchase price. But if you have decided to go for a bank loan, you will have to pay a 25% downpayment.
Legal Fees and Stamp Duties
You can take care of all the legal fees and stamp duties by using both cash and CPF. The stamp duty rates stand at 1% for the first $180,000, 2% for the next $180,000, and 3% for the remaining amount.
Staggered Downpayment Scheme
You might also end up being allowed to pay half the price of the downpayment after signing the lease agreement and the other half after taking care of the Terms of Agreement and receiving the keys to your flat. This is what the Staggered Downpayment Scheme is all about. Now, all that is left for you to do is wait until your flat has been completely built, which will probably take about two or three years.
At some point, you will be able to pick up the keys to your HDB unit. These are the most important things that you need to know about buying an HDB flat in Singapore!