If you are living in Singapore, and you want to have your very own HDB flat. In fact, these HDB flats are currently home to more than 80 percent of the resident population of Singapore. About 90 percent of these people are now owning their home due to the affordable value of such property. But are these flats really a good buy? Are those families with low income in Singapore able to get a flat?
According to experts, the basics of these HDB flats have remained the same. Young couples who are planning on settling down and having their very own home. Subsidized flats are also gaining more popularity in terms of the housing grants that come with them. But there are some things you may want to know to before you buy one to get a higher value for your dollar. Ideally, you may want to settled down in the flat for at least 5 years, or better yet keep the property for about 20 to as much as 40 years.
Apparently, flat prices come with considerably similar prices in this specific age range. However, the value of an HDB flat goes down once it has reached 64 years old, and there remaining lease period is under 35 years. This is when bank loans become tougher to get. In fact, it may be impossible to use your CPF savings once you have a 69-year old flat, which makes it difficult to finance your mortgages.
This is why experts suggest that if your goal is to buy a resale flat, a practical option would be to consider one that is less than 20 years old. This is what most people do when they want to resell the unit to a competitive rate in the next 10 years. While it may not exactly be a high profit sale, this can still give them some good returns on their investment. Moreover, the price should be relatively stable if the present trends continue in the coming years. Buying an HDB flat between 30 and 40 years old is not a smart move if you are hoping to resell it and make some profit after a decade.
On the other hand, if you only view the flat as a consumption item, then you can buy an old one without any issue. This is what people do when they aim to live in it into their old age. At that point, it should not matter much even if the resale value has gone down since you are not even intending to make profits out of them.
Another practical suggestion from experts is buying a HDB flat that is a bit older than 10 or 20 years, but having it rented out. The yields continue to be quite appealing because of the reasonable purchase price, as compared with how private condos usually cost in Singapore. The areas where these HDB flats are located are usually nearby public transports and amenities that are favorable to people looking for rentals. Thus, the rental fee tends to hike up, as well.
Now that you have the basics when it comes to buying and selling HDB flats, let’s get into details and look into some things to look into before you purchase your very own HDB flat. The following factors can impact not only your purchasing ability, but also how you will be able to manage paying off your loans.
1. Consider the size of the flat
How big or small do you want your own place to be? The size of the HDB flat has a massive impact on the price, which makes this factor an important aspect to look into before buying this type of property. After all, you cannot afford to go too big if your budget is limited, and going for a much smaller place than how you want it to be can be very uncomfortable.
When deciding on the size, you should think about the number of people moving in with you. Are you just planning on staying there by yourself? Or do you want to move in with your spouse and eventually have kids? Consider these questions to determine the size of the area before you buy one right away.
2. Determine your financial situation that may impact your loan repayments.
If you are planning on taking out a personal loan to pay for the flat, then you should examine your current salary, financial obligations, and other factors that could affect your ability to pay your loan off. For single individuals who are not giving any financial support to their parents or loved ones, it would be easier to buy a flat and repay the personal loan at the same time.
But it can get tougher for someone who is the breadwinner in the family and supporting their children’s basic needs. Just be open with your credit score, check your present situation, and these should help you decide if taking out a loan is appropriate at this point. The criteria to take up loans from the banks are pretty strict and low income earners might not be able to get enough loan.
Alternatively, you can consider taking up some loan from a licensed money lender in Singapore and do not worry, these money lender Singapore are fully authorised by the government and it is safe to borrow money from them. You can easily obtain personal loan if in need to solve your cash flow issue. They provide low income loan to low income earners in Singapore and the procedure is quite simple as well.
3. Do some research on the surrounding area or the neighborhood
Since you are intending to stay in your new home for quite a while, then you need to conduct some research on the neighborhood. This can impact your overall experience during your stay while affecting the resale value supposing you want to sell your property in the future. This is why you should choose the environment well and consider basic qualities such as a safe, friendly, and comfortable neighborhood. An area that is located close to the bank, store, public transport, and schools should also be good choices for a location for your HDB flat.
4. Have a professional to help you inspect the place
Just because you have read in an ad or someone recommended a particular HDB flat to you, this does not mean you should go for it right away without checking the area first. This is why if you are serious about buying a place for yourself, then make the time to inspect it yourself, along with a knowledgeable individual to help you. Inspect the home’s facilities, fixtures, and also the surrounding. Everything should be working right, and this could save you a huge amount of money for unnecessary and costly repairs.
5. Know your priorities
It is only natural that you have a list of features on your mind, which you want your HDB to have. These could be facilities and amenities that matter to you such as a nearby pool, proximity to your workplace, and other things that matter to you. But in reality, it is difficult to find everything you need in one place at a certain budget in mind. This is why you should consider ranking this list of facilities you prefer then look at your top priority to help you come up with a wise decision.
6. Know how much the prices of the available HDB flats are
The good news is that HDB flats are becoming more and more affordable. In fact, the Housing and Development Board has reported that the individuals who have purchased a flat and took out a loan to repay it have been using just 19 percent of their monthly income for payments in 2015, as compared to the 24 percent in 2013. There were also buyers who were able to pay off their monthly mortgage using their CPF savings in the past 3 years. This is surely an optimistic revelation that gives more people the hope to invest in their own property, as well.
Of course, the price significantly impacts your chances of paying off the loan at an earlier time. If you want to avoid extending the payment term to more than a decade, then you should consider the cost of the flat. To pay it off quickly, then opt for a reasonable size of a flat, check the facilities included, and decide if it is within your budget. But the worst mistake you can ever make is to opt for the cheapest option that will may compromise the quality of the property.