Are you considering purchasing a resale HDB flat in Singapore? With the right guidance, this process can be smooth and rewarding. Here’s a comprehensive step-by-step guide to help you navigate the journey of buying your dream home in 2024.
Step 1: Check Your Eligibility
Before you start your home search, ensure you meet the eligibility criteria. You must be a Singapore citizen or permanent resident, and meet age requirements (at least 35 for unmarried or divorced individuals, and 21 for widowed or orphaned individuals). Additionally, you must fulfill family nucleus requirements and relinquish ownership of any other properties.
Step 2: Calculate Your Affordability
Understanding your financial capacity is crucial. Contact Kaeden Ong for a personalized consultation to understand your specific needs and situation. Kaeden will work with you to develop a financing plan, providing you with a better understanding before you make your next move. This will help you set a realistic budget and buy with prudency.
Step 3: Apply for a HDB Flat Eligibility (HFE) Letter
You can check your eligibility to purchase a BTO or resale HDB flat, access CPF housing grants, and secure a HDB housing loan. The new HFE letter simplifies the process by retrieving your personal information from Myinfo, reducing the need for extensive documentation.
Step 4: Start Your Home Search
Now comes the exciting part of house hunting! While house hunting may be exhilarating, it can also be daunting. Contact Kaeden, a highly experienced professional with an impressive set of credentials that enable him to effectively guide you in finding your next home. With a proven track record of helping clients save money and receiving numerous referrals, Kaeden is well-equipped to assist you with your real estate needs.
Step 5: Decide on a Financing Option
When purchasing an HDB resale flat, it's important to carefully consider the financing options available (HDB Loan or Bank Loan). This decision represents a significant financial commitment, and it's essential to compare the downpayment and interest rates for each option.
Here’s a comparison between HDB loans and bank loans:
HDB Loan:
- Downpayment: 25% of the purchase price, which can be fully covered using CPF Ordinary Account (OA) savings.
- Interest Rates: Set at 0.1% above the OA interest rate.
- Lock-in Period: None, providing more flexibility.
Bank Loan:
- Downpayment: 25% of the purchase price, with a minimum of 5% required in cash.
- Interest Rates: Currently indicative is higher than 2.6% (as of September 2024) but subject to market fluctuations.
- Lock-in Period: Yes, which can limit your refinancing options later.
Before making an offer on a property, make sure to obtain the necessary letters:
- For an HDB loan, secure a valid HLE letter.
- For a bank loan, obtain a bank’s Letter of Offer (LO) prior to exercising the Option to Purchase (OTP).
Keep in mind that cash will be needed for several payments, including:
- A deposit to the seller, capped at $5,000, which is paid in two stages: the Option Fee and the Exercise Fee.
- Any amounts not covered by your CPF funds and the housing loan.
- Cash proceeds if you are selling your previous flat and taking a second HDB loan.
Your CPF OA savings can be utilized for various aspects of the purchase, such as:
- The initial payment, either fully or partially, based on your chosen loan type.
- Ongoing mortgage payments, adhering to the valuation and withdrawal limits.
Additionally, be prepared for extra costs associated with the purchase, including:
- Administrative fees for resale application, which range from $40 to $80.
- Valuation fees around $120.
- Insurance and legal fees, starting from approximately $1,800 with Ohmyhome.
After sorting out your financing and understanding all related costs, you can proceed to make an offer on your desired flat.
Step 6: Make an Offer
Once you’ve found the right flat, you can make an offer. An Option fee (ranging from 1to1to1,000) must be paid to the seller, who will then provide you with the HDB-prescribed Option to Purchase (OTP). You’ll have 21 days to exercise this option.
Step 7: Discuss Temporary Extension of Stay
If the seller needs more time to vacate the property, you can negotiate a Temporary Extension of Stay, allowing them to remain in the flat for up to three months. This can help ensure a smooth transition for both parties.
Step 8: Request for Flat Valuation
If you plan to use CPF funds or a housing loan, submit a ‘Request for Value’ to HDB to determine the loan and CPF amounts you can utilize. This step is essential for understanding your financing options.
Step 9: Exercise the Option
To finalize your purchase, you must sign the acceptance in the OTP and deliver the signed document to the seller, along with the exercise fee. This step solidifies your commitment to the purchase.
Step 10: Complete the Resale Application
Both you and the seller must submit the resale application within seven days of each other, along with the necessary supporting documents. This includes an administrative fee based on the size of the flat.
Step 11: Accept the Terms and Conditions
After submitting your application, you’ll receive an SMS from HDB to accept the terms and conditions. This must be done within six days to proceed with the sale.
Step 12: Make Payment for Resale Fees and Calculate Stamp Duty
Prepare for additional costs, including resale application fees, valuation fees, and stamp duty. You can calculate your stamp duty using the Ohmyhome app, ensuring you budget accordingly.
Step 13: Receive Approval Notification
Once HDB processes your application, you’ll receive a notification regarding the approval status. Arrange a final inspection of the flat before the completion appointment to ensure everything is in order.
Step 14: Resale Completion Appointment
Your appointment with HDB will occur 8-10 weeks after acceptance of the resale application. During this meeting, you’ll sign the transfer document, mortgage agreement, and receive the keys to your new home.
Step 15: Congratulations In Getting New Home!
You now have the knowledge to navigate the process of purchasing a resale HDB flat in Singapore. If you require professional guidance, feel free to contact Kaeden. He is available to assist you at every step, ensuring that you find the perfect home for you and your loved ones. Reach out to Kaeden today for professional support and expert advice on your property journey!
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