I’ve been asked by many people (okay, it was three) about my homebuying journey, and it’s been something I wanted to talk about for the longest time!
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The process of buying a resale condo
|Get approval-in-principle loan (maximum 75% of property purchase price)||–||–|
|Make an offer to buy (i.e. Booking Fee)||1% of property price||Cash|
|Seller accepts, and buyer exercises the offer to buy (i.e. Option Fee)||4% of property price||Cash|
|Hire a conveyancing lawyer||$2,000 to $3,000||Cash or CPF|
|Pay Buyer’s Stamp Duty (and Additional Buyer’s Stamp Duty if applicable)||1% on first $180,000|
2% on first $180,000
3% on next $640,000
4% on amounts above $1 million
|Cash or CPF|
|Balance of downpayment||20% of property price||Cash or CPF|
My advice for homebuyers
Get an approval-in-principle (AIP) loan
An AIP loan is checking with a bank whether you are eligible to take out a mortgage. If you make an offer to buy a property and subsequently can’t secure a mortgage for your loan, you have to forfeit your booking fee. 1% of a $1 million property is $10,000!
Use a comparison mortgage tool
Get the best mortgage package by comparing rate with a mortgage comparison tool. I have tied up with Redbrick to offer you homebuyers a free mortgage consultation.
They would even advise you on property matters beyond just mortgage comparison, which could be a useful second opinion to your property agent.
View multiple units
This probably goes without saying, but it takes a lot of effort and time especially if you are like me and aren’t that excited for property viewings.
I’m glad to have persisted and viewed enough units until I found something that I was happy with.
Stick to a budget
It’s easy to get carried away since buying an apartment is an exciting stage of life, but starting your new life in a new place wouldn’t be as enjoyable if you are beset with a crippling mortgage.
Don’t forget you will have more bills and expenses to take care of once you move out, so set a sensible budget and try to keep with it. I would generally recommend keeping your monthly mortgage within one-third of your income.
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