The finer details of resale houses and pls shut up.

Disclaimer: Best read on desktop than mobile. House agents probably will hate me after this since they are charging buyers 1% to do all these things. Which I think is okay if you have extra money to throw and you are lazy to do search for your house. But yes, 1% is a A LOT because if the house costs 350k, then the commission you are paying them is SGD3,500+. And that is a lot of money, no? Oh wells. And this is lengthy so you may skip to the end because I have something at the end.

-
FOR BUDGETING PURPOSES
So before buying a resale/BTO, it is always best to check your finances and set a budget on how much you both can afford without paying cash to HDB when collecting your keys. Firstly, check your Housing Loan Eligibility or better know as HLE. Don't worry, you can check a "rough estimation" without having to apply an actual one with HDB. But it is always better to apply for HLE to get the exact amount that both of you are eligible for which some may find it tedious because you need to download 1 year's worth pay slips for the 1st owner and last 3 month's worth of pay slips for second owner to submit. So whichever okay?

For Baobei and I, when we went for our haus hunting in November 2014, we did not apply for HLE at first but we did a "rough calculation" on HDB website (google: HLE calculator). It looks something like this:

For us, Baobei is the first owner and I am the second owner.

So fill this up and it will look something like this:

It is pretty simple. They just need these information which I have just put in so I can generate the HLE for you guys to see. They don't include OT (over time), so don't include them in or else when you do the actual application, it will not be the same amount as when you're calculating currently.

Then when you generate, this will pop up. This is called your HLE. 

What is HLE?

Basically to explain in layman terms, it is how much HDB can loan you based on your income and how much CPF is being contributed monthly. From those given information, they will roughly know how much to loan you. So if you don't earn a lot, it makes sense that they can't loan you a lot too because then you will have a hard time paying you back. For an example, you wouldn't lend someone $100 if she is earning 50 cents an hour right? Not the best example, but I am just showing that it is common sense. So based on the example above, they will deduct a total of $1,800 from both your ORDINARY ACCOUNT(OA). Please remember that when your pay is deducted for CPF, most of the money goes to Ordinary Account but some goes to your Medisave etc. And usually if you borrow the maximum amount of HLE, you may have to top up cash monthly because your monthly contribution to your OA will not be enough. Which is what is happening to Baobei and I. However, HDB does not wipe off your entire OA when you collect your keys which people keep saying they do. In fact these people don't check their CPF statements and realize that HDB leaves about 1-2k balance in their OA. However with bonuses etc, we are not required to top up the cash monthly and still have a balance in our OA up til today. Syukur Alhamdulilah.

But if you want to apply for an actual HLE, you can do so. And you don't have to necessary buy a house once you apply for one, so don't worry okay of the implications of applying just to see the actual amount. It's validity is for 6 months. However, you will need to reapply for another HLE if let's say one of you got a pay raise (not necessary unless you wish to get a bigger amount of loan) or when one of you change your job (different pay slips etc). You can apply by logging in (myhdb) via one of your singpass:

On the sidebar, you can see the HLE link for your to apply. As you can tell, we both applied in December when we were looking at that particular house in Serangoon :D And when we actually had the intention of buying the house, we actually called up the Customer Relations Manager in charge of our case, to fasten the process. She was nice to push our application forward and we got it less than a week.

So what's next after your HLE? To know your budget, you need to check what is amount in your OA when you log into your CPF page here. I don't have an example because this one is not calculator like HLE. Personal ah.

Next, check your eligibility for housing grant.

For TeamBTO, you get to check if you're eligible for Additional Housing Grant/Special Housing Grant. Fill up the questionnaire to check but here's a rough guideline:

For resale people, the only grant you get is if both are first-timers which is $30,000 but if you are buying a resale house near either of your parents, provided none of your siblings or your partner's siblings have not used this, you get an additional $10,000 grant which totals to $40,000. However, staying near parents in HDB terms is within 1km radius. So for us, Serangoon and Bishan is more than 1km so we are only eligible for 30k grant. If only one of you is a first timer, then partial grant is given. But if I am not mistaken, you can also apply for AHG if your combined income does not exceed $5,000. I am not sure about this so just double check with the case manager.

So what is the final budget that you can afford:

HLE + Combined CPF in your OA + AHG/SHG/resale 1st timer grant = Amount you can afford.

-

FOR RESALE ONLY

Here's a zoom on resale because it is a little more complicated. If you're interested in resale houses and want to know your actual budget, you will realize how much of a best friend this page is to you:

This is for those who want to compute for BTO. For resale, it is called Resale Financial Plan.

So if you have not obtained your HLE, you can use the rough estimation that you have calculated. It is better to have applied for one because for Baobei and I, it was higher by 20k than when we did a calculation which gave us more budget. Anyway, without HLE it will look something like this:

This is based on the HLE example I did above.

Okay, I forgot to mention that when you are doing this you should have houses that you are currently eyeing on. My fabbret website to search for resale houses is Property Guru. And if you're interested in buying a 4 room resale which is at least 103-105sqm like ours, it is called 4A. You can refine your search by doing this:

STEPS
1) The price the seller is offering, you put inside "Purchase Price of Resale Flat".
2) For valuation, you can put in any value if you are just checking as this does not affect the outcome. It just for HDB to note how much is your flat valued at as they will calculate based on the condition of the house, the location and what amenities you can find around the house. During my parents' time of buying resale houses, valuation is done before selling so seller knows the value of the house and people use that as a marking to set the price. But now, the tables have turned. Valuation is only done after the signing of the first set of papers when both have agreed on the price. So it is really luck if you get to buy a house below the valuation like we did.

IMPORTANT:

The red box is what you need to take note of. This is something all buyers have to pay to HDB. When we compute our Resale Finances Plan, we set aside this as part of our budget because if you don't include it, high chance this is the amount that you will need to top up that amount when collecting keys.

The blue indicates how much you need to pay HDB upon key collection. Meaning to say, after totaling up your HLE, combined CPF and grants, it is still not enough to cover the cost of the house you're buying plus the component in the red box. If you don't pay the one circled in blue upon key collection (second appointment), you will not get your keys.

The green indicates how much monthly you have to top up cash. This happens when both your OA does not cover the monthly repayment needed to make for your HLE.

So what is the actual budget for resale:

HLE + Combined CPF in OA for both + grant (30k/40k) + 10k (the red box) = Your budget

If you choose to purchase a flat above your budget, then you will see it reflected in the blue circle. This is okay for some because they have saved money prior to this. HDB has no issues if you're buying something above your budget just as long as you make the payment when collecting your keys.

What is the timeline/needed for resale?

1) When both seller and buyer have agreed on the price, the seller's agent will pass you a bunch of documents to sign which the agent will ask you to take photos of the pages you will need to submit to HDB online when applying for valuation. Also, seller will ask for a deposit to secure the unit. Deposit range from $1-1,000. For us, we deposited $1,000. Once you have signed and deposit, the paper work will be valid for 21 days. Meaning during this 21 days of the signing of the first batch of papers, seller is not allowed to let anyone view the house while you do your paperwork as a buyer. If seller backs out, you can take your deposit back. If the buyer backs out, your deposit will be forfeited. 

2) After signing the first set of papers and taking the photos of the signed documents, you will have to log into the HDB website (myhdb) via either of your singpass to request for valuation to be done at the flat you are purchasing.

You need to pay an amount, I think slightly more than $100 for the valuation report to be done depending if you're buying 2/3/4/5 room flat. Put the seller's agent as the person to contact because the person who is doing the valuation needs to liaise with the agent for someone to be home for the valuation to be done. Just ask the seller's agent to keep you in the loop. This is done within the next few days and the valuation report will be updated on myhdb webpage when you log into either of your account via singpass within a week.

IMPORTANT: The seller is not allowed to increase the price of the house if the valuation is higher than the agreed price. If both are still agreeable, then the seller's agent will meet up with you to sign the second set of papers and will request for the second deposit. Your first and second deposit cannot exceed $5,000. This has to be declared on the papers when you both sign. So if your first deposit if $1,000, your seller can ask $4,000 as the second deposit. However, remember this will offset what you have to pay later on (refer above where you have the deposit column to declare). An example if the house is sold at $350,000 and you have already deposited $5,000 then they will calculate the rest based on your balance which is $345,000. Once this is done and submitted to HDB, both of you can log in to choose a date and time for the first appointment. Note that first appointments are Monday to Fridays and morning slots only. If anyone backs out at this stage, you can actually sue the other party.

For us, all the paper work were completed in February and our first appointment was only on the 27th of March. That was a 4 week gap.

What happens during the first appointment?

A lot of signing of papers for the buyers. Also, your case manager will ensure that you are applying for a house you can afford so basically checking your finances. If you need to pay cash if you happen to buy a flat that is outside your budget, then he/she will inform you of what you need to pay on second appointment. You will also need to bring documents like CPF letters/pay slips, marriage cert, IC which they will let you know via letter. After this is completed, both you and the seller's agent will decide on the second appointment date where is the handover of keys. The fastest is 4 weeks and the longest you can stretch is 8 weeks. For us, we took the 8 weeks because no rush for us and the seller's daughter wanted to celebrate her birthday there for the last time.

What happens during the second appointment?

Not much signing of papers. You will hear "Congratulations on your flat," at the end of it. You will also have to pay property tax to the seller's representative which is usually a lawyer that costs less than $100. You will also need to apply for house insurance which is less than $100 if you want the minimum coverage. What we did is to cancel to PUB bill of our house and ensure no outstanding payments due. We also set an account for our house to ensure electricity and water are running at our house. This switch will take about 5 working days. And yes, you will get your keys.

So yes, buying a resale house can be tedious in terms of looking for potential houses and setting up appointments. At the same time, the amount of paper work you have to do on our own can be taxing. But we saved ourselves more than $4,000 just doing this. And you know what's funny? The seller's agent made us think that we were not capable of doing this because he kept saying, "You sure you know how to do? Cannot do wrongly you know. You want my agent friend to represent you?" Please brotha. Only once when we were not sure how to submit that we went down to HDB itself and the person at the customer service booth helped us. So make full use of all these options instead of paying people to do it. If not, you email me lah. I can do it for $500. Hahah. Put it in my BabyRKM fund.

-

Just to clarify one thing: Your BTO is not the only BTO that is 92sqm.

And I have something for human beings out there that are sensitive nak mampos

(image from Google)

Instructions to use product above: Put all over your face. Let it soak in your skin and hopefully brains. With a ray of hope that uolls understand that as you grow older, the overly sensitip has got to go as well.

But what does it tell if you hate me so much but you read into everything I post/say/do? Heh. Know that I will never apologise for having a backbone.