Government Loans For First Time Home Buyers

Government Loans For First Time Home Buyers – Are you looking for your first home? Find out the difference between an HDB loan and a bank loan so you can make an informed decision!

When planning to buy your first home, start by analyzing your financing options: should you choose an HDB loan or a bank loan? Here we present the main differences between both so you can choose the one that suits your needs!

Government Loans For First Time Home Buyers

An HDB loan requires a down payment of at least 10% of the purchase price, which you can pay in full using your savings in your Ordinary Account (OA), cash or a combination of both savings.green and OA. The money saved in OA must be used to purchase a house before HDB approves the remaining money for a home loan. However, you have the flexibility of up to $20,000 in your OA for your future needs. Not only do these savings continue to receive attractive interest rates on your OA, but they also work perfectly for monthly payments if necessary!

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When opting for a bank loan, 20% of the purchase price must be paid as a deposit when signing the lease contract. 5% is paid in cash, the remaining 15% can be paid in cash or savings. Since the maximum amount you can borrow from a financial institution is 75% of the value of the property or the purchase price (whichever is lower), you will still have to pay the remaining 5% of the purchase price in cash or when you pick up the keys. . . for your apartment. You also have the flexibility to withdraw and pay off your home loan in cash.

Bank loan rates fluctuate depending on the market, while HDB loan rates are currently 0.1% higher than the OA rate, i.e. 2.6% per annum. If you want to pay less interest to have more money for retirement, bank loans typically have a lower interest rate than HDB loans. However, be sure to keep an eye on financing options to get the best interest rate.

There is no lock-in period for HDB loans, so there is no penalty if you want to settle the loan early. This also means you have the option to refinance your loan at the bank at any time if you want to take advantage of low interest rates. But once you have repaid the HDB loan in the bank, you cannot go back to HDB loans.

Most banks, on the other hand, have a lock-up period, usually two or three years. If you want to pay off the loan faster during the foreclosure period or pay off the loan at another bank, you will be charged a penalty, which is usually 1.5% of the loan amount. Furthermore, you cannot pay for your house with an HDB loan if you have decided to take out a bank loan for your mortgage.

Buying A Home: Hdb Or Condo?

The type of loan you choose, along with other factors such as the type of property and the remaining term of the lease, will determine the amount of savings you can use to purchase your home.

Find out how much you can save on your home purchase with the home equity calculator.

When planning your finances to buy a home, it is important to remember that your savings are also for retirement. You can choose to pay your home equity in cash to grow your OA savings at an attractive rate of up to 3.5% annually* to support your retirement plans.

Remember that you are not only remembering your current financial situation, but also your future needs!

First Time Homebuyer Programs, Loans And Grants To Know

*Includes additional interest. Members under age 55 pay an additional 1% interest annually on the first $60,000 of their balance. Members age 55 and older pay an additional 2% per year on the first $30,000 and 1% per year on the next $30,000. Terms and Conditions apply. Wondering which HDB flats you can buy individually in Singapore? Here is a list of apartment types and subsidies you can get!

The Housing Board (HDB), under the Ministry of National Development (MND), is Singapore’s housing authority, responsible for planning and constructing affordable housing for Singaporeans. Founded on February 1, 1960, HDB has built more than 1 million houses, housing 80% of the country’s population.

Currently, HDB offers Singaporeans three 99-year lease options, namely Build-to-Order (BTO), Design-Build-Sales Plan (DBSS) and Executive Condominiums (EC), catering to different housing needs and resources. .

HDB announced new measures in September to help first-time homeowners buy and resell new homes. The following measures will apply from September 11, 2019:

What Are First Time Homebuyer Programs?

The monthly household income of first-time HDB buyers aged 35 and above will increase from $6,000 to $7,000. Eligible people can buy new two-bedroom flexible flats or resale flats (up to 5 bedrooms) with Housing Benefit Singles on the open market.

This is good news if you are currently single and your next priority is to get your own HDB apartment. Finally, you can avoid questions from your parents. Or you could have reached the second rung of the #adult ladder.

HDB will also increase the monthly income of households purchasing their new or resale HDB flats for the first time from $12,000 to $14,000.

EHG replaces the two previous schemes, the Additional Housing Grant and the Special Grant. The EHG subsidy is included in your income. The less you earn, the higher the subsidy. Under the Singapore Single Citizen Scheme, the EHG is up to $40,000 for first-time buyers of new or resale homes (eligible household income is up to $4,500) and up to $80,000 for first-time families or singles joining come together to buy a new house or resell it. (eligible family income is up to $4,500 and family income increases up to $9,000).

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To qualify for EHG, applicants or their spouses must have worked continuously for at least 12 months and must have completed other HDB schemes, including Special Housing Allowance.

They also need to buy houses that they can call home up to the age of 95 (based on HDB’s maximum age of 99). Those whose houses do not meet this condition will receive a subsidy according to what the remaining library can pay them until they reach their age.

First, you must be a Singapore citizen and at least 35 years old to apply as single or divorced. The only exception is if you are an orphan and have no siblings; You can apply for housing at the age of 21 under the orphan program.

People above 35 years of age can jointly apply for an HDB apartment and up to 4 people can jointly own an apartment under the Unified Association Law.

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Other eligibility criteria are the Immigration Policy (EIP) and the Singapore Resident Quota (SPR) (used to promote and maintain social ties). However, this is likely to affect your housing location more than your eligibility to apply for housing.

As a buyer, you have two options when it comes to HDB flats: 2-room HDB BTO flex flats in greenfield developments or resale HDB flats. The table below provides a quick overview of the pros and cons of both options.

The best part of purchasing a BTO flat is the financial part: BTOs are cheaper than those available on the market. Although there are many applicants, single people are limited to 2-bedroom flexible apartments* in non-mature housing.

The total area of ​​the 1-bedroom, 1-living room apartments ranges from 35 to 49 square meters.

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Obviously, 2 flats are small, but if you apply for one under the BTO scheme, you will get a new flat that you can renovate to suit your needs. For example, the 36 square meter model now has a sliding partition built into an entire wall, allowing you to experience an open floor plan.

In the November 2020 HDB BTO exercise, there were 2,564 applicants for 2-bedroom Flex units (2.6 applicants per unit) and 23,691 applicants for 3-bedroom or larger units (4.9 applicants per room).

But be prepared for the wait time. Even if you are lucky enough to succeed in the HDB BTO nomination, you will still have to wait 3-4 years for your house before you can move in.

Pro tip: When referring to HDB flats, remember to subtract 1 from the name to determine how many rooms you have. So 3 bedrooms means 2 bedrooms + 1 living room, 4 bedrooms 3 bedrooms + 1 living room,

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