It is a known fact that most people aim to have the 5Cs while living in Singapore. While some Cs may not be so important such as having a credit card or car, having a condo is still a goal of many Singaporeans.
However, if you are going to buy a condo as your 1st property, here are three key ‘C’ considerations to ensure you are fully aware of the commitment you need for the next few years:
1. Combined Income
Your income or combined income must be comfortable enough to make the monthly repayments. If you are buying a condo at $1.45 million and getting a bank loan for your mortgage, there is a Loan-To-Value (LTV) limit of 75% (subject to credit assessment); meaning, you can borrow up to 75% of the property value from the bank and come up with the remaining 25% in cash and CPF. With the current bank rate of an average of 4% and a mortgage of 25 years, you may be looking at paying about $5K + a month.
2. CPF Sum Upfront
The minimum CPF needed to buy a condominium is 20%. Since this is your first property, ensure that you have a comfortable sum in your CPF for the purchase. If you have more than 20% CPF, you can choose to pay more upfront and then reduce your loan payment monthly. You also need to put aside some CPF to pay for stamping and legal fees unless you want to pay for them in cash.
3. 5% Cash Upfront
A minimum of 5% cash of the value of the condominium is needed upfront. Assuming the house is worth $ 1 million, you need at least $50K in cash. Do you have enough cash for this? Don’t forget that you need more cash for other purposes like legal fees, agent commission, renovation, furniture, electronics and etc.
If you’re looking for a property agent to help you rent, buy or sell, let me know. My team and I will be happy to assist you!
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