Property Fees and Financing

Property Fees

Property buyers have to be prepared for 5 types of standard fees upon deciding to buy a property. They are:

  • Legal fees
  • Stamp fees (Purchase + Mortgage)
  • Valuation fees
  • Mortgage Reducing Term Insurance (MTRI) / Home Protection Insurance (HPIS)
  • Fire Insurance

Once the document is executed, it must be stamped within 14 days (if executed in Singapore) or within 30 days from the date of the receipt of the document in Singapore if document is executed overseas.

 

Property Financing

Always make sure that you obtain an in-principal housing loan approval before you commit to any purchase. If you intend to take up a housing loan from a financial institution in Singapore, you need to ask yourself several questions, such as:

  • Do you meet credit guidelines set out by the financial institution to qualify for the loan?
  • What is the up-front cash you'll be able to set aside as initial downpayment?
  • What savings do you have at your disposal in your CPF? (we shall touch more on this in a while)
  • What is the monthly installment that you can comfortably afford?

There are three types of CPF limits on mortgage repayment that you should be aware of - Valuation Limit, Available Housing Withdrawal Limit and Withdrawal Limit.

This is how they will affect you as a home buyer:

You will reach the Valuation Limit when the CPF savings used for mortgage repayment are equal to the purchase price or the valuation of the property, whichever is lower.

When you have reached Valuation Limit, you can still use your CPF savings to pay for the loan, and the amount you can use is known as the Available Housing Withdrawal Limit (AHWL).

To calculate your AHWL, you first have to put aside half of the Minimum Sum in your CPF account. Whatever balance is left becomes the AHWL.

The AHWL is subject to a cap, which is the Withdrawal Limit. It is set at 120 percent.