Things we wish we knew: Before buying our house (Part 2) Singapore

[@fitriyahzakaria]

such a good sharing for couples who are hunting for resales now! thank you for filming this video and sharing personal input!!

[@BL-wn4cr]

I think have to factor that there is an income cap to hdb loans. Not all are eligible for hdb loan.

[@CT-xy6or]

Interest rate environment so different now than when this video was made. Can make update video? Cash can earn more interest than CPF's 2.5%, so better to use CPF then cash now? 🙃

[@n-animetv1121]

Regarding to the comment 'use cash to repay mortgage and transfer CPF OA to SA' This is another more efficient way. You could still pay the mortgage with OA, then top up cash into SA. The result is still the same with different procedure. However, you do get tax deduction for 7k/year per person for topping up money to SA under retirement sum scheme.

[@minnie6401]

It’s more worth it to get a BTO as resale have lesser than 99 years left and more expensive around 100k. It’s more worth it to bto and get pphs rental and use cash to pay down your house. Transfer OA to SA for 4% to let it compound to FRS

[@stevenheng3336]

Importantly for everyone especially the youngsters to keep their credit record healthy.... Credit Bureau Search... once you tarnish it and no $, don't think of getting your next property... its that real...

[@Kaplantay]

I think the key is to have a healthy habit in saving.Once you have a saving mentality ,you would not worry about the so called credit score.Credit score are for bank to extract profit from ordinary citizen like us.Buy affordable house,take hdb loan,clear off and build a sizable saving,banks will be begging you to take a loan.

[@stevenheng3336]

@@Kaplantay I only hope to be employable till 55 and withdraw my cpf.... 5 more years to go

[@Kaplantay]

@@stevenheng3336 Great.Cpf life is one of the life saving for most singapore.If you been working whole life from 20 plus to 55 at a salary of 3k basic,you be able to easily hit the full retirement sum of monthly 1300 plus.

[@stevenheng3336]

@@Kaplantay i have already met and will pledge my st for another min 80k.... so whatever cpf contributing now is my hard earn $ for 55

[@Kaplantay]

@@stevenheng3336 You mean that you had met the full retirement fund of 181k?Then can try the enhanced of 261k depending on inflation rate.

[@xysg1]

I would suggest against renting out your house to strangers as there are cases of harassment from unlicensed money lenders.

[@pxdkitty]

Good point on this! Thank you!🙏🏻🙏🏻

[@catzeycatsey7449]

Been renting out for 15 years and don’t have such problem at all , you must know how to find good and trustworthy tenants

[@stevenheng3336]

Yes, SA is case to case basis but amount is very small

[@dominic2446]

5:25 why do you want to get back your cpf money?

[@stevenheng3336]

Car loan interest is already built in when loan started

[@stevenheng3336]

Take up rate for buyback lease is very Very very low as most sporeans want to leave for their children

[@pxdkitty]

True~ in our case we plan to just have cats for now, so we haven’t really thought about it yet 🙈

[@Royboy2451]

Your cousin's strategy works if you want to rely on earning money from CPF. However, the downside is you will have very little in your OA, preventing you from doing any property upgrades or property investments in the future. And if your counter-argument is that you do stock investments, please look at your SYFE returns right now hahaha.

[@pyt6631]

Pre-payment/ partial payment penalty charge depends on your loan contract. It's as good as a one-time x% "interest rate" on the prepayment sum $Y. It still makes sense for early pre-payment. What we are paying on the monthly payments is as good as interest rate applied "multiple times" on the same $Y, as interest is always applied to the remaining sum that this $Y is a part of. As for using CPF, yes it is still your money but there are some considerations on meeting minimum sum FRS. As I understand, only those amount above FRS is truly your money (as in up to your wish how you would want to use it). For some cases, set aside BRS will do I think. So it matters whether the accrued interest is above these amounts or not, otherwise you'll still owe yourself money. As for loan duration, get the longest allowable, and the lowest monthly payment possible. Can always do a partial prepayment next time. Monthly payments die die must pay , so cash reserves need to be catered for this too. Borrowing $10K more in the loan just so to keep this amount of cash u already have in your pocket can help with monthly payments for many months.

[@johnchristie1550]

Nice

[@stevenheng3336]

Nah, hdb always n will never be the same speed for legal compared to banks.... its publicity for pap if they repo yr flat

[@AlexTeo]

good to be more financial savvy of what is available - housing bank loan is around 1.5% pa now - savings account earning around 2-3% pa - cash transfer to SA is 4% with tax rebate - >4% you have stocks/bonds - crypto is the trend now for more crazy earning (gambling)

[@dsignerer]

exactly!

[@drizzt167]

Hi again, For the 'extra' 1% in OA for 1st 20k (and less than 60k in OA & SA) is meant for those who has less than 40k in SA. Think about this statement. 🤔🤔🤔 (Clue) what happens if my SA has 60k++....eureka... it simply means that the 'extra' 1% earned in SA (for 1st 60k) goes to SA, and OA remains @ 2.5%. If you planned to use HDB loan path for your housing, I can give you my opinion and experience, in layman term (I'm not in finance but an engineer view). 1. Before buying HDB house, do your homework for your CPF like: a. Check how much you need for minimum $ in your OA for initial payment (including min $ of the house, fees, etc) & $20k in OA for future challenges. b. If you have excess $ in OA (after a.), consider if you want to transfer this excess to SA. c. get 25 year loan for smaller monthly payments (as you've mentioned, loan is effective only in short term, whereas long term, gives you flexibility, as your future career is expected to improve [confidence in SG economy]. FYI - You can also increase HDB payment sum in future, or pay a lump sum cash to reduce loan quantum. 2. If you can manage your cash and expenses: I. If you have not reach 60k in SA, make cash top up. (For $7k personal tax rebate & additional $7k to parents, wife, siblings tax rebate) II. make cash top up to MA asap. Due to any additional contribution to MA after max MA, goes to SA instead. III. continue using cash top up or xfer from OA, to SA. IV. optional A, (on my own opinion, for only those daring for higher risk and only after you've reached FRS before 55) you may want to use SRS for better than 2.5% and reducing tax. V. optional B, start reducing your HDB loan sum by using CPF or cash to repay lump sum. (For not so finance savvy or wanting to be free of financial burdens). 3. Some things CPF is not explicit: a. after 55, RA is created, by moving SA 1st and then OA 2nd, up to FRS b. after 55, ERS needs to manually transfer to RA. (from OA👍) do it asap on your 55th Bday. c. after 55, cash withdrawal will start from SA and NOT from OA (only for those have FRS + extra $ in SA). I think CPF rulings for those still needs OA for housing loans. 👎👎👎 Cpf should let people to choose OA or SA to withdraw 1st. 4. think carefully on insurance and their insurance/financial packages. Their returns aren't as good as CPF 4% but they are ok on medical sides. 5. If possible, place seed monies on your kids CPF MA & SA, even OA for education. compound interest is great.

[@shiminfoong]

Hi, thank you for sharing your experience. However I do have a feedback: I realized both of you speak in different volume to the mic or at different distance from it. Hence its really confusing on the ear to hear especially when both of you are speaking at the same time. I was bearing it the whole 20mins because I want to know what you be sharing. Thanks.

[@pxdkitty]

working on it! thanks for the feedback! :)

[@SherBooga]

Very informative!

[@weineng123]

Great points and sharing by the couple. I personally believe that if you have higher risk appetite and looking into stock markets in general. The comment by your cousin to lock in SA for 4% doesn't mean to be worth it. I would rather use OA for CPF investment scheme (CPFIS-OA) to invest in S&P 500 with endowus which gives you 9% return (based on historical return rate of 9.6% from 1990-2022 data then substracting 0.66% admin fees by endowus). You still get the benefits from building your retirement account with additional 5% interest, on top of the flexibility to withdraw your account CPF OA when needed. Hence eliminating the need for an emergency fund to pay off anything with CPF OA in the future. The second point about extending loans as long as possible. A lot of channels covering home loans, always asked everyone to clear as soon as possible without realising the fact that money in the future is gonna worth lesser than now. Imagine 1-2% inflation every year, how much lesser would the initial sum be worth if you were take 25 years loan. (still considering the extra interests accrued that go up to $100,000 and more) By doing so, you are well able to live within your means without struggling to pay off mortgage, therefore minimising any unnecessary stress. At the same time, you need to have another form investment that will earn you much favourable rates than your mortgage interest. Repricing or refinancing to get lower mortgage rate could be another option as well. If you are really worried about home financing 1. Find a property within your means (not incurring more than 200k total loan) 2. Shop for best mortgage rate (lucky if you get during recessionary period like rn to avoid refinacing or repricing in the future) 3. Payment mode. If you are a saver and low risk taker, i would recommend using cash for mortgage since you using OA account to earn min 2.5% interest. Since bank savings doesnt give you any returns. Hope this helps!