Best Answer:   Most people will finance their property using a bank loan (mortgage). The amount you can borrow will depend on your own personal financial circumstances plus the bank’s valuation of the property or the actual transaction price (whichever is lower). Singaporeans can usually borrow up to 90% of the value and foreigners usually up to 80%. The bank will take into account your capacity to pay the monthly instalments – for this they will evaluate your income, assets, employment history and your age, and they will also check your credit history for any previous payment problems.
For the deposit you can use your Central Provident Fund (CPF) savings, if you have an account, and the rest has to be in cash. A Singaporean with good CPF savings might not need much cash to pay for a property, but foreigners should expect to have at least 20% in cash (+ fees) at hand to purchase a property.
If you are buying a HDB apartment, you should check the eligibility to get a concession loan from HDB. If you are not entitled to get the loan from HDB, you need to finance it with a normal commercial mortgage.
You should meet with your banker or mortgage broker before you sign any contracts to see whether you can actually secure the financing when you need it. Agents can also refer you to a bank or mortgage broker if you do not already know one.
There are various fees that come on top of the purchase price when the sale is completed, and you should therefore reserve money to pay for them. Fortunately, some of them are borne by the seller. These are summarised below:
Agent's Commission - For private property, the agent’s commission is paid by the seller - unless you have specifically appointed an agent as a representative. The seller typically pays 1-2% commission on the sale. For HDB apartment, the buyer pays typically 1% commission.
Solicitor's Fee - For the buyer, the solicitor’s fees are typically 0.3-0.6% of the transaction value. In addition, there are extra legal fees if CPF is used to pay for the apartment. The seller pays typically 0.15% of the transaction value to his/her solicitor.
Mortgage Fee - The banks typically charge an administration fee and valuation fee for the mortgage. These together are somewhere between S$200-300. In addition, you need to take out on insurance on the property for the bank to give out the mortgage.
Stamp Fee - The stamp fee will be payable to Inland Revenue Authority of Singapore within 14 days upon exercising the Option to Purchase (or signing the Sales and Purchase Agreement when you buy from a property developer). For properties above S$300,000, stamp fee payable will be 3% of the purchase price minus S$5,400. The mortgage stamp fee is up to S$500, which is the amount payable for most mortgages.
Michael · 5 years ago