In Singapore, about 80% of the population live in Housing Development Board (HDB) flats. New couples who are getting married soon will inevitably have to select and purchase a home which often ends up being a HDB flat in Singapore.
Buying A Home That You Can Afford In Singapore
This course aims to help you budget for your first HDB home using one-time and recurring costs. You will use online calculations that narrow down a possible price range of your property based on your own financial status and CPF Housing Grants. Learn to manage your home loan repayment to reduce interest charges.
This course will elaborate on the six steps that you can take to budget for your first HDB flat:
At the end of this course you will be able to have a better financial plan to purchase your first HDB home.
This video introduces this online module entitled "Buying Your First HDB Home". HDB stands for the Housing Development Board of Singapore.
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Step 1 involves tracking your fixed and variable expenses and determining what is left over each month.
Step 2 involves estimating your future housing expenses such as utility bills and conservancy fees. Do remember to include some money for starting your family as well.
The mortgage servicing ratio sets a limit to the loan amount. A good guideline to use is that we should not be using more than 30% of our gross income to foot monthly home loan instalments.
In the example shown, a combined CPF ordinary account contribution of $1,150 + $270 of cash surplus represents 28.4% of the gross income and is within the 30% MSR guideline.
What if cash surplus + CPF OA contribution is more than 30% of your combined gross income?
For buying a HDB or DBSS flat whether with a HDB Loan or Bank Loan, HDB will still limit the loan to 30% mortgage servicing ratio.
For buying a EC or private property, only a bank loan is applicable and there is a Total Debt Servicing Ratio of 60%.
In this step, we will look at how to use an online calculator to estimate the loan quantum.
This article displays the details in step 3.
Note that CPF Housing Grants can significantly lower the costs of your housing loan.
It is important to work our all the additional cash you require when buying your first HDB home.
The "Our First Home" Calculator can be found at http://www.cpf.gov.sg
We hope that you have enjoyed taking this course. For more, please refer to http://finlit.sg
The MoneySENSE-Singapore Polytechnic Institute for Financial Literacy is a collaboration between MoneySENSE, the national financial education programme in Singapore and Singapore Polytechnic.
MoneySENSE is spearheaded by the public-sector Financial Education Steering Committee which comprises representatives from the Ministry of Health, Ministry of Social and Family Development, Ministry of Education, Ministry of Manpower, Central Provident Fund Board, Monetary Authority of Singapore, National Library Board and People’s Association.
Our financial education courses cover basic money management, financial planning and investment know-how.