Purchase of FH condo

[pangz]

Hi peepz,

Would like some advice on the above. How do you think a couple earning $8.5k per month would be able to finance a FH 2 room condo at $560k? We are first-time buyers.

The downpayment is alright, I'm more worried about monthly financing...

Your experiences?

[Derek0925]

Bro, it depends on individual. How much are you willing to part with $ in exchange for the luxury as well as comfort.

For FH condo at 560k looks a very good buy. Btw, where is it? Size? 2 room should be around 1000 sq ft. I got a friend who own a FH 980sq ft at the east recently sold for $620k. Bought at 2000 for $440k. The property was more then 20 years old. The scenary is very nice though.....18th storey.

At $560k, assuming u pay up 20% (10 via CPF, 10 via cash)

So you will loan approximately $450k. Base on current interest board rate, your monthly installment should be around 2k+ per mth. This is of cos base on 30 years loan tenure. Assuming total income is $8k (each is 4k) per couple, each will have contribut about $1k to your CPF ordinary account. That excludes the 2.5% interest you will earn in your CPF account as well as the variable bonuses your employer will present to you.

As such, you should be a reasonably healthy level if you were to purchase this property. Both of the CPF account will not exhibit any deficit.....

Good luck bro.

[cyberpig]

Ask OCBC!!!

But seriously, all banks offers quite extensive information about home loans on their website. Why don't U take a look and call them?? E.g. OCBC.

[pangz]

Bro, it depends on individual. How much are you willing to part with $ in exchange for the luxury as well as comfort.

For FH condo at 560k looks a very good buy. Btw, where is it? Size? 2 room should be around 1000 sq ft. I got a friend who own a FH 980sq ft at the east recently sold for $620k. Bought at 2000 for $440k. The property was more then 20 years old. The scenary is very nice though.....18th storey.

At $560k, assuming u pay up 20% (10 via CPF, 10 via cash)

So you will loan approximately $450k. Base on current interest board rate, your monthly installment should be around 2k+ per mth. This is of cos base on 30 years loan tenure. Assuming total income is $8k (each is 4k) per couple, each will have contribut about $1k to your CPF ordinary account. That excludes the 2.5% interest you will earn in your CPF account as well as the variable bonuses your employer will present to you.

As such, you should be a reasonably healthy level if you were to purchase this property. Both of the CPF account will not exhibit any deficit.....

Good luck bro.

Thanks... me sis actually...

was looking around in D12-D13, price is about $600psf - $650psf, near my place mah.

but small lah... dun have 1000sqft.

it's such a big investment, so i tot i should ask around first.

[nakazoru]

It depends on your monthly expenditure and existing loan if any.

It is better to workout a fix household costing and variable costing. Also future expenditure/commitment if you can.

Most cost involve (at least for me):

Car loan ~500-600 + 300 petrol

Electrical ~ 250

Water ~ 50

Food/leisure ~ 800 (husband/wife) Smoker/drinker ~1500

SCV/HP ~ 120 for both

It already comes to S$3000

How abt things like parent maintenance/equipment breakdown/reefing/tour/Insurance/Road Tax...

How abt children...

I dun even dare think abt it if I lose my job... Thunderstorm do happen.

If you are looking at it please do be careful. Bank are always ready to auction ur condo if you cannot pay.

[pangz]

It depends on your monthly expenditure and existing loan if any.

It is better to workout a fix household costing and variable costing. Also future expenditure/commitment if you can.

Most cost involve (at least for me):

Car loan ~500-600 + 300 petrol

Electrical ~ 250

Water ~ 50

Food/leisure ~ 800 (husband/wife) Smoker/drinker ~1500

SCV/HP ~ 120 for both

It already comes to S$3000

How abt things like parent maintenance/equipment breakdown/reefing/tour/Insurance/Road Tax...

How abt children...

I dun even dare think abt it if I lose my job... Thunderstorm do happen.

If you are looking at it please do be careful. Bank are always ready to auction ur condo if you cannot pay.

hmm... you do have a point there....

but at least i got no car/loan for now... so its not so bad. and i'm still in my twenties... hopefully combined pay will increase in the coming years.

To plan for emergencies, I will try to build a saving buffer of 5 mths salaries after my purchase, although i think first year will be pok.

reefing.... hopefully i can keep at 100 plus a month for maintenance.....

[Derek0925]

Thanks... me sis actually...

was looking around in D12-D13, price is about $600psf - $650psf, near my place mah.

but small lah... dun have 1000sqft.

it's such a big investment, so i tot i should ask around first.

sorry it's a SIS

D12 - 13 quite central. Good leh.....

It's a good thing u didn't owe a car. To me, i think a car is a liability. House at least might turn out to be a asset if you happen to buy the right place at the right time. U can treat it as a investment.

I believe your maintenance should be around $200 la. But if u stay at HDB, after deducting those micellanceous fee, it is only around $100+ la. In return u have security guard, swimming and many other amenities.

Good luck to you sis

[nakazoru]

Hi Sis;

In my opinion, property today is an asset for sure (Still). I'm looking at it as a primary reason where it is a place to live in where you feel comfortable. We spend 24 hrs a day, approx 10hrs out working/leisure, and the remaining at home to feel comfortable where 8 hrs is on sleep. So it is good to pamper urself for those rest hour. In my opinion, you should really not spend more than 20% of the total income on properties, allowing you a balance lifestyle. Otherwise you may become a slave of the property, thus it becomes a liability before being an asset.

On the idea of property as investment. Selling price for private condo has already peak out. Meaning Price of property has infated more 100% to 300% for the last 20-30 years. While the average income increase per white collar household maintain at 30%-50%. Thus the household income and properties price are not in line. Meaning property prices are out of reach of many people, so not many people will buy ur property as only few are able to afford. So I advise against property as investment. I hope I still have the figures right.

I in the 30s, have see many married friends average income 6-10K per month, but without much saving, many less than 10K in bank at anytime. Reason is that they were made slave by banks, serving 7-30 years of indebtness (Car loan, renovation loan,home loan... credit Cards). Since you mention you are 20s, if you complete the payment, you will be 50s, and please pray 30 yrs w/o mishap...

If you chose to stay in a 4rm apt for example central Singapore town direct from HDB at 240K, paying majority with CPF... monthly installment comes to abt 300-1000 depending on CPF. Imagine the amount of hard cash on hand ... There is no financial lockdown... live carefree, invest money elsewhere with better returns.

Juz my opinon...

[jervismun]

Shouldn't be a problem without a car. Anyway if both of you are working, the CPF alone can cover most of the monthly installments.

Where is the location? Seems a bit expensive to me.

2 years ago, we bought a private brand new condo (by Centrepoint Properties) 2 room, 1050 sq. ft. in Woodlands for $450K only. That time property price was quite rock bottom lah. No scenery, 4th floor. But full facilities (4 swimming pools!!!) That time we bought fully-built units some more, less than 1 month moved in already. So if you gotto wait 3 years for the project... $560k is way too much unless in central locations (or opposite MRT stations).

You may wanna consider private condos instead (I assume FH is developed by HDB)

[jervismun]

Oh it sorta struck me... FH is Freehold. Haha... a bit slow lately.

The condo I bought was LH (Leasehold). So a good location Freehold (2 room) is around that price $550k (minimum).

Personally, I wouldn't care too much if it is LH or FH. Location is the deciding factor (but most good locations are usually FH).

Here's my take on a condo.

No matter if it is FH or LH, the condo will not be able to last more than 30 years. Look at a building from the 70s... you think someone will pay a lot for it? If the difference is $150K (after 30 years repayment = $300K) and that makes a huge difference in your monthly installments especially at this initial stage since you said you were in your 20s. I bought my condo at 27 and I know how it feels... better not over commit something that you will have difficulty later... who knows... another major recession could be around the corner... it happens every 3 to 5 years anyway.

And a condo is not an investment... a landed property is. Look at those condos from the 80s... do you want to swim in their swimming pool? Their lift smells and walls/floor tiles cracking already... so definitely you will have heartache if you sacrifice too much of your lifestyle for it.

In the end of the day... it is just a "nest" for us to rest in... reality bites

All the best to you SIS (and BRO)

[nakazoru]

Shouldn't be a problem without a car. Anyway if both of you are working, the CPF alone can cover most of the monthly installments.

Where is the location? Seems a bit expensive to me.

2 years ago, we bought a private brand new condo (by Centrepoint Properties) 2 room, 1050 sq. ft. in Woodlands for $450K only. That time property price was quite rock bottom lah. No scenery, 4th floor. But full facilities (4 swimming pools!!!) That time we bought fully-built units some more, less than 1 month moved in already. So if you gotto wait 3 years for the project... $560k is way too much unless in central locations (or opposite MRT stations).

You may wanna consider private condos instead (I assume FH is developed by HDB)

FH mean Freehold tenure.

Private comes in 99yrs, 999yrs and Freehold-Forever.

[jervismun]

FH mean Freehold tenure.

Private comes in 99yrs, 999yrs and Freehold-Forever.

I know bro... I originally thought FH Condo is another funky name HDB came up with

[gunzo]

Hi Sis;

In my opinion, property today is an asset for sure (Still). I'm looking at it as a primary reason where it is a place to live in where you feel comfortable. We spend 24 hrs a day, approx 10hrs out working/leisure, and the remaining at home to feel comfortable where 8 hrs is on sleep. So it is good to pamper urself for those rest hour. In my opinion, you should really not spend more than 20% of the total income on properties, allowing you a balance lifestyle. Otherwise you may become a slave of the property, thus it becomes a liability before being an asset.

On the idea of property as investment. Selling price for private condo has already peak out. Meaning Price of property has infated more 100% to 300% for the last 20-30 years. While the average income increase per white collar household maintain at 30%-50%. Thus the household income and properties price are not in line. Meaning property prices are out of reach of many people, so not many people will buy ur property as only few are able to afford. So I advise against property as investment. I hope I still have the figures right.

I in the 30s, have see many married friends average income 6-10K per month, but without much saving, many less than 10K in bank at anytime. Reason is that they were made slave by banks, serving 7-30 years of indebtness (Car loan, renovation loan,home loan... credit Cards). Since you mention you are 20s, if you complete the payment, you will be 50s, and please pray 30 yrs w/o mishap...

If you chose to stay in a 4rm apt for example central Singapore town direct from HDB at 240K, paying majority with CPF... monthly installment comes to abt 300-1000 depending on CPF. Imagine the amount of hard cash on hand ... There is no financial lockdown... live carefree, invest money elsewhere with better returns.

Juz my opinon...

cool man .. voice of a calculative person !! man after my own heart :lol:

Is HDB really that bad ?? Their recent year projects are actually quite good

Do you need the services / amenities ??

What is enticing you to these FH(M?? ) properties ?

I assume you're still DiNKy's and what Nakazoru say is quite true.. there's other outlays that you may not have factor in yet .. like kids

Your income will allow you to stay in a HDB (take full advantage of the offers / benefits that comes with it) comfortably, be owning your flat in probably 5-10years .. and yet still enjoy a lavish lifestyle

I'm considered lucky as I was able to get a new HDB before I exceeded the requirements .. and right now .. I don't have to worry about not having a roof over my head since it's fully paid up if I lose my job or something else ..

It really boils down to needs and wants if you tell me

you only need a place to call your own .. but you want something nicer .. kekeke

just like reefing ..

[Melvyn Tan]

Listen to nakazoru.

[madmac]

Hi peepz,

Would like some advice on the above. How do you think a couple earning $8.5k per month would be able to finance a FH 2 room condo at $560k? We are first-time buyers.

The downpayment is alright, I'm more worried about monthly financing...

Your experiences?

8.5k for two is tight. Unless :

• you don't plan for kids

• you can pay 70% of the cost

• Both u and your partner are junior doctors or something that don't need to worry job loss ever

• you're in some business that can really generate enough huge income sometimes

• you plan on working for the next 15 to 20 years of your good life.

But if you still want to go for it, all the best to you both. Private property prices IMHO, won't go much lower from where it is, so your downside is protected for the next 5 odd years.

[nakazoru]

cool man .. voice of a calculative person !! man after my own heart :lol:

Pinaz... Calculative? I never take note of money issue when in the 20s... At 30s, after experience on 2 cycle of economic downturn, you juz get smarter. Anyway, we on same boat.

3 kind of people:

1. Learn from others mistake.

2. Learn from own mistake.

3. never learn from mistake.

The best part is we are all composite in different portion of the 3 type of people.

I have a friend that work in Citibank, thru him I get quite a few bank sales of private housing. I even went to one that I like the location at D10, 1200sqft for 650K. My head swell at the idea of living at D10 with those multi-millionaire at a tender age of 32. Look closely... "head swell". Meaning can afford but not comfortably. My idea then is that I can cut down on my expenses to own one.

Cutting down to me means -

1. Quit smoking - Saving 300SGD/mth

2. Quit drinking - Saving 300SGD/mth

3. Quit dining out - Saving 300SGD/mth

4. Quit shopping/movie - 150/mth

5. Quit SCV - 45SGD/mth

6. Quit using Aircon - 100SGD/mth

7. Quit reefing - 100SGD/mth...

Selling of:

1. Shares

2. 1 of my 2 cars which is fully paid

3. Golf clubs

4. Surfing equipment

Essentially it mean that I will be reduced to a begger to be "with" the millionaire. But am I really there?

Amenties at condo - Swimming pool, tennis court, gym, recreation room.

Do I have the mood to enjoy when I need to work even harder to make ends meet. My wife hate swimming as it darken/age her fair skin. Since I'm reduced to 1 car, the rest of the family needs to take public transport out of D10, which is only a handful and MRT is far far away. Nearest supermarket is coldstorage some 800m away.

Took 2 hard knock on my head, I'm back to the ground. Saint again We are all in a rat race, wanting to do well and lavish ourself with the best if possible. Show off to buddies if possible. What have I become?

Taking a step back, I got a 5 rm at Toa Payoh, MRT/Interchange/NTUC/HDB Hub at doorstep. Orchard 10 mins away by MRT etc etc.

Result - Better financial stability, essential amnenties, life is better w/o cutting anything. Investment is more secure as I bought at 380K from HDB and open market valued approx 480K now. I were lucky to get the ballot from HDB anyway...

[asg]

Hi peepz,

Would like some advice on the above. How do you think a couple earning $8.5k per month would be able to finance a FH 2 room condo at $560k? We are first-time buyers.

The downpayment is alright, I'm more worried about monthly financing...

Your experiences?

Hi! there are a few things to consider before making the decisions:

1) what industry are both of you in? is it sun-set industry where the $$$ will becoming harder and harder to earn or are both you in some up and coming industry (as good as ever) where the $$$ will more or less flows in? getting a long term loan is... hmm... long term... not only the present earning capabilty has to be considered, futures earning has to be consider as well

2) how is the total asset portfollo like for both of you? do you have any FD, unit trust, stock, that can help tide over a period of 3~6 months (raining days)? house is NOT an asset unless it is fully paid for. so long as it is still under loan, the bank owns it, not the persons staying in it owns it. just take a look at those aunctions by bank on housing and you shall have a better idea. asset rich, cash poor is only slightly better than asset poor, cash poor

3) what is the life's planning in 5, 10, 15 years time? planning to have kids? futhering studying? overseas posting? do you mind staying in the same house for 5,10, 15 years?

4) and one last question is: what do you want in life? does buying it make you a happier person?

IMO, condo shall be brought in the tune of buying a toy: you know that you are spending "unrecoverable" money but you get a kick out of it AND enjoy it. (it shall not degrade your current lifestyle)

let me end by sharing this from robert kiyosaki:

anything that put money in your pocket is asset; anything that remove money from your pocket is liability; know what you are buying

[[PrinCesS (",)]]

Taking a step back, I got a 5 rm at Toa Payoh, MRT/Interchange/NTUC/HDB Hub at doorstep. Orchard 10 mins away by MRT etc

I think I 'm staying very near you

[Jameshong]

Hi bro,

I dun encourage or discourage you to purchase a Condo ! I know this is a dream to most Singaporean younger nowadays . First, you must know your financial well, and ask yourself some questions ?

1. How much cash do I have after deducted from both of our expenses? (includes condo maintenance fee)

2. CPF and personnel saving account; - is it more than enough to cover 2 to 3 years installment and current expenses, if both of us lost job(Bank changes board rate depend on market)? The estimated monthly installment at current rate is about S$1.8K~2.4K of 20% down payment with 80% bank loan.

IMHO, Life is no gain, no pain so is it depend on what’s you want ? Do you and your family feel happy after getting a Condo ? If yes, Work harder if it is your dream !

IMHO,So long you can overcome the above financial question, I dun think why you can’t get a condo?

"Different people have different lifestyle, so depend wat you want"

bro..work harder....towards your dream

cheers.

[nakazoru]

,Aug 19 2006, 12:09 PM]

I think I 'm staying very near you

Aiyo PrinCess;

Found someone in my neighbourhood.

Adorable angel u have there. My little devil is 1 year old. Maybe they can become childhood friend.

Hi Jameshong;

Its Sis not Bro.

Life is a beauty as there is dreams. We all have, most are within reach as we get the better of our working life.

We set targets before committing something as big as 1/2 mil. Do a calculation how many years to save that kinda money. approx 40 year if one manage to save 2K a mth. I guess I really dun see many that can actually own one. 2K saving/mth is already dream for many.

Using my future 30 years on juz one dream. Which I have many. For me I will have to have assets of 1/2 mil on hand before I even consider. I have too many priorities and Condo is not the first.

Back to 8.5K monthly income for the condo, I think it is the lower band of the income bracket for condo. So it is a high risk thing to do.

[Melvyn Tan]

Condo have low, mid and high end ratings. If you have stability for S$8.5k (confidently) combine for the next 10 years then go buy since you are living in it.

If a condo is desired, then go get the EC (Executive Condo) or lower end condo which one can finance comfortably, range from S$350k to S$500k.

If you have S$100-S$200k cash at hand, you can safely buy or with your S$8.5k combine salary (is it take home at S$8.5k?) it is ok too.

Have bbq invite me can? hehhehe..

Note:

If you have paid taxes (both of you) then above S$8k salary scale cannot buy HDB flats hehehehe

[Jameshong]

Cutting down to me means -

1. Quit smoking - Saving 300SGD/mth

2. Quit drinking - Saving 300SGD/mth

3. Quit dining out - Saving 300SGD/mth

4. Quit shopping/movie - 150/mth

5. Quit SCV - 45SGD/mth

6. Quit using Aircon - 100SGD/mth

7. Quit reefing - 100SGD/mth...

Selling of:

1. Shares

2. 1 of my 2 cars which is fully paid

3. Golf clubs

4. Surfing equipment

Hi bro nakazoru,

She may not have the type of expenses like you do !

IMHO, all Lady/woman like to have their sweet owned "HOME" so first piroty is house instead spend more than 1.3k for undesired expenses or thing wat ?

If you quit all, there will no problem save up to 1/2 million after 30 year lei ~

In singapore, currently how many people can earn a salary of 8.5K at the age of below 30?

(not includes OT or allowance, only basic salary). They are consider as mid range couple already.. !

cheers.

[nakazoru]

Hi bro nakazoru,

She may not have the type of expenses like you do !

IMHO, all Lady/woman like to have their sweet owned "HOME" so first piroty is house instead spend more than 1.3k for undesired expenses or thing wat ?

If you quit all, there will no problem save up to 1/2 million after 30 year lei ~

In singapore, currently how many people can earn a salary of 8.5K at the age of below 30?

(not includes OT or allowance, only basic salary). They are consider as mid range couple already.. !

cheers.

Bro James;

You are right that she may not have the expenses of mine. Those are my expenses as of the time when I comtemplate buying a condo. With the arrival of my son, I quit quite abit of those stuff.

Most gals alike believe that the "prince charming" will come. Most gals alike wants their home to be tip-top condition. Ideally, I love to stay at 6th Ave. Sadly gals alike have their sweet dreams woken by the reality of life. I'm trying urge her to exercise caution not totally giving up on dreams.

30 years to have 1/2 mil? I'm mentally exhausted already to hear that.

8.5K combine salary, yes quite a handful of the people I know. Thus I pass statement like 6-10K income bracket but bank less than 10K. Friends that are lower than that never pop the question abt private residence.

If our sis and husband here are money disciplined people like accountant/auditor/bankers/financial Consultant. I believe quite strongly they can make the condo happen with 8.5K as these people are much more money-wise compare to many people.

[Jameshong]

If our sis and husband here are money disciplined people like accountant/auditor/bankers/financial Consultant. I believe quite strongly they can make the condo happen with 8.5K as these people are much more money-wise compare to many people.

Yalor..hopefully they are well disciplined with strong determination ###### full commitment ppl la !

Cheers.

[pangz]

Hi guys!

Thanks for all your kind advice and comments. It's a risk that I'm going to take, but I think I'm still young and can work hard. In my industry, having roughed it out for 4 yrs, I think should be able to earn more in the future.

Anyway, I've thought of the pros and cons of this decision and I've bought a new FH 3 rm place that I really like in D8 (not really the top-end luxurious type of place, but somewhere comfortable and quiet).

I agree with pple that HDB is always the safest, but as a young couple looking for a new HDB flat in mature estates (near my parents), i find this to be a nightmare. Month after month I have been visiting the HDB websites looking for a flat but those available via WIS, are usually snapped up quickly. What's left is the BTO Fernvale selection which is due in too long a period. Anyway, after our last increment, kind of cannot buy new flats already.

I was thinking, since I'm still young, why not just bia? Take it as forced savings. Furthermore, it's not a million dollar house that's gonna be really beyond my reach. At some point in time, I think this investment is gonna pay off. That's my humble two cents, pitfall is that if i have kids, cannot go shopping too much lor....

anyway.