Are you planning to visit new launch showflat anytime soon? It is vital that you weigh your financial muscles before you embark on that trip. Remember your ability to purchase is determined by both your level of income and the number of properties you own today. Furthermore, the bank will use the sum of your financial obligations to determine your borrowing limit. Here are some of the factors you need to; look into before visiting that show gallery.
1. Find out how much CPF you can spend
If you understand that to purchase a property you must use your CPF, then I hope that you already have it. It is wise to know the exact amount you are capable of spending on the property purchase. For a first time buyer, your CPF limit is equal to the amount in your Ordinary Account. However, if you have purchased any property before then, you will need a sum of $75000 in your ordinary account and special account before buying a second property.
2. Secure your bank loan
Remember the saying on counting your chics only after they are hatched? Many property buyers often fail to apply this. You should be confident of the bank’s willingness and ability to lend you the funds you require. Apply for a loan Approval –in – principle(AIP). This will cost you no money. However, it should be done in good time for it takes the bank approximately three days to process the request. With your AIP, you can now prepare your property purchase budget.
3. Know Your Stamp Duty Obligations
In today’s’ property market, you ought to know to which Additional Buyer Stamp Duty(ABSD) bracket you belong to. Permanent residents are charged a 5% tax for the first purchase while subsequent purchases will attract a 10% tax on the property transactewd price. The case is however different for Singaporeans.
They enjoy a zero tax on the first purchase while the second gets a 7% tax and the third gets a 10% tax. If you are a foreigner, then woe unto you for you will be slapped with a whopping 15% tax on the transaction price.
4. Find Out How The Normal Progressive Payment Scheme Operates
Today, the Normal Progressive Scheme (NPS) is used as the universal payment scheme in every new launch condos. Understanding the flow of payments is crucial in planning your property purchase cashflows before visiting that show suite. After confirming your property of choice, you will
I) Make a 5% cash payment to the developer before receiving an option to purchase(OTP)
II) In two weeks, you will receive the Sales and Purchases Agreement(S&P).
III) You will be given 21 days from the date you receive the (S&P) to exercise the contract at your solicitor’s office. In case the contract is not exercised within the stipulated time, you will be refunded 75% of the initial Option Fee.
IV) The stamp duty and the ABSD are payable within 14 days should the contract be exercised successfully.
V) The 15% balance of the down payment should be paid in 8 weeks counting from the OTP date.
5. Know the balloting process
Most developers often conduct a pre-launch some days before the official launch day.
The buyers get an opportunity to preview the condo show flat. On the real launch day, the registered buyers get invited to the showflat site where they engage in a balloting process and choose units of their preference with discounts offered on a first-come-first-served –basis. You are required to produce the following documents before registering for the balloting.
- Copy of the registrant’s NRIC
- A cheque written to the developer’s account
- An expression of interest form which is duly filled and signed
All these documents are returned to you should you fail to purchase any unit on the set launch date. a