1.How much do I need to buy a HDB Resale?
2.How much do I need to buy a Condo?
3.How much do I need to buy a Commercial or Industrial Property?
4.How much can I Loan? (TDSR Effect)
5.How to Get Additional Loan for Condo?
6.How to Calculate Return On Equity (ROE) & Rental Yield (ROI)?
7.How to Increase Value of Your Rental Property?
1. How much do I need to buy a HDB resale?
(1) 20% Downpayment
(a) 5% Cash (includes $1,000 Option Fee + $4,000 OTP)
(b) 15% Cash/CPF
(2) Cash-Over-Value (COV)
(3) Stamp Duty = Purchase Price x3% - $ 5,400 (Cash/CPF)
(4) Stamp Fees = Estimated $ 500 (Cash/CPF)
(5) Agent Fees = Negotiable (Cash)
(6) Legal Fees = Estimated $ 2,500 (Cash/CPF)
Minimum Cash Need = (1a) + (2) + (5)
Total Cash + CPF Need = (1) + (2) + (3) + (4) + (5) + (6)
Loan is subjected to MSR (up to 30% of gross salary).
2. How much do I need to buy a Condo?
(1) 20% Downpayment
(a) 5% Cash (includes 1% Grant OTP + 4% Exercise OTP)
(b) 15% Cash/CPF
(2) Stamp Duty = Purchase Price x3% - $ 5,400 (Cash/CPF)
(3) Stamp Fees = Estimated $ 500 (Cash/CPF)
(4) Legal Fees = Estimated $ 3,000 (Cash/CPF)
Minimum Cash Need = (1a)
Total Cash + CPF Need = (1) + (2) + (3) + (4)
Note:
Loan is subjected to TDSR (up to 60% of gross salary).
For case with existing loan, downpayment should be 50% (LTV 50%).
3. How much do I need to buy a Commercial or Industrial Property?
(1) 20% Downpayment
(2) 7% GST [There are certain condition to get GST refund!]
(3) Stamp Duty = (Purchase Price x 3%) - $ 5,400
(4) Stamp Fees = Estimated $ 500 (Cash/CPF)
(5) Legal Fees = Estimated $ 3,000 (Cash/CPF).
Note:
There is NO ABSD for buying Commercial and Industrial Property.
Minimum Cash Need = (1) + (2) + (3) + (4) + (5)
Loan is subjected to TDSR (up to 60% of gross salary).
For case with existing loan, downpayment should be 50% (LTV 50%).
4. How much can I Loan? (TDSR Effect)
Total Debt Servicing Ratio ( TDSR ) was announced on 29th June 2013 to restrict your total monthly debt based on 60% of your income.
For instance,
Monthly income = $8,000 (A)
Car monthly installment = $1,000 (B)
Total credit card limit = $20,000 (C)
Maximum property monthly installment
= (A) x 60% - (B) - (C)x 3%
= $3,200
If the buyer is below 35 years old, taking a 30 years loan tenure, by using mortgage calculator at 3.5% interest stress test (for Residential property), maximum loan affordability = $ 712,000.
If the buyer has no existing loan, he is able to get 80% Loan-To-Value (LTV).
Note:
This calculation is based on employed person.
For self-employed person, Your maximum property monthly installment = (A) x 60% x 70% - (B) - (C)x 3% .
5. How to Get Additional Loan for Condo?
(1) Tenancy Agreement
If you have existing owned property which collecting rental, you may factor 70% of the monthly rental income into your monthly income subjected to bank approval.
For instance:
Monthly income = (A)
Monthly rental income = (B)
Car monthly installment = (C)
Total credit card limit = (D)
According to TDSR, maximum monthly installment
= (A)x60% + (B)x70% x60% - (C) - (D)x3%
(2)Part Purchase
Most husband and wife are buying property together.
So when they attempt to buy together for their 2nd property, they will be based on 7% ABSD and maximum up to 50% LTV only.
To do part purchase, husband buys over wife’s share of 1st property so that wife can buy 2nd property at 80% LTV without ABSD.
For instance, an existing property purchased at $1.2 million owned by husband and wife.
First, wife bought over husband’s 50% share of existing property, then husband can buy the next property without downpayment and ABSD.
The strategy and details are as shown as below:
(3)Asset Under Management (AUM)
What is AUM?
Assets include Cash in bank and Fix Deposit.
These can be used as additional monthly income to get additional loan.
How much AUM required?
Assets required = Required income x 48 months / 30%
The additional monthly income is still subjected to TDSR.
For instance, if you shortfall of $1,000 income to get your desired Loan To Value (LTV), your assets required
= 1000 x 48 / 30% = $160,000
Therefore, you need to show the bank $160,000 to get your desired LTV.
When do I need to provide proof of assets for the loan?
Show them twice. Once on loan application, another on completion/disbursement.
Why should I use this method to get additional loan as I have such amount of money to pay the bank?
This is suitable for businessman who need huge cash flow every month. Some more the assets do not locked by the bank.
6. How to Calculate Return On Equity (ROE) & Rental Yield (ROI)?
Return on Equity (ROE) means the percentage of annual return over capital invest.
ROE = ((Monthly Rental -Interest -Maintenance -Property Tax) x 12)/(20% Downpayment+Stamp Duty+Legal Fees) x 100%
Monthly Rental = $3,700
Purchase Price = $1.10 million
Interest (use Amortization) = $900 (use mortgage calculator)
Monthly Maintenance = $400
Property Tax = $300
Stamp Duty = $27,600
Legal Fees = $3,000
ROE = 10 %
Rental Yield (ROI) means the percentage of annual rental over purchase price.
ROI = (Annual Rent)/(Purchase Price) x 100% = 4 %
7. How to Increase Value of Your Rental Property?
To increase your rental, other than making your unit clean and neat, you can actually modify your unit into Dual-key or Triple key unit.
To do this, you must engage authorized contractor and renovation works are subjected to approval by Building and Construction Authority (BCA).
However, have to check on your unit floor plan design to determine the suitability to transfer the unit into Dual-key or Triple-Key.
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