Loan quantum puts flat beyond reach

[Latka]

ST Forum

Jul 29, 2011

 

Loan quantum puts flat beyond reach

 

MY WIFE and I heeded the Government's call to have more babies and have more than reproduced ourselves with three wonderful children.

 

With a growing family, an elderly parent and a maid, my family of seven was badly in need of a bigger living space.

 

We decided to make use of our second and final chance to apply for new build-to-order (BTO) subsidised public housing.

 

After close to a year of unsuccessful applications, we were overjoyed to be finally invited to select a BTO flat. But our joy proved to be short-lived.

 

The subsidised public housing we selected costs close to half a million dollars. Our combined income of more than $7,000 is at the high end of the Housing Board's income ceiling.

 

Yet when we applied for an HDB loan, we were surprised that the board required a downpayment of 60 per cent - more than a quarter of a million dollars - on the purchase price.

 

The HDB offered a maximum loan of only $188,000 on a half-million-dollar public flat.

 

I truly wonder if public housing is affordable any more if citizens, like my family who have heeded the Government's call to have more children, have to find more than a quarter of a million dollars to make the downpayment on a subsidised public flat.

 

Shi Weilong

 

[Latka]

The current policy really screwed up alot of people.

[Kelfinity]

Question,

 

1) with almost $8K of income, why are they not allowed 80% HDB loan? Unless they are already very old?

2) how come they need so much loan when they can sell existing flat to make up part of purchase price? Unless existing flat in negative equity?

 

[Mockngbrd]

Cannot be helped... Walk away la

[Icedbs]

can always take bank loan right?

 

BTW, does the author means he is trying to own 2 HDB flats?

[Latka]

Question,

 

1) with almost $8K of income, why are they not allowed 80% HDB loan? Unless they are already very old?

2) how come they need so much loan when they can sell existing flat to make up part of purchase price? Unless existing flat in negative equity?

 

B'cos existing rule states that if u currently servicing housing loan, the next loan can take 60% only. Which is a really dumb assed rule where HDB flats are concerned.

Firstly, when they buy HDB, they must sell existing one. Knowing this, why can't HDB grant 80% loan for next flat knowing full well they have to sell existing one?

[SimonTan]

First statement already mention government.....intention to blame is clear.

 

Funny.....sell existing house should return back money to their CPF to fund the 60% downpayment easily.

Could be one party is old age....cannot get long term loan?

 

Anyway....this is a special case...one off.

If this is very common...then the HDB would not be able to sell so many flats at inflated price for the past 10 years!!

 

I mean there is no fundamental wrong in the housing loan policy.

Just that the couple has not enough cash savings....like this also want to blame the gov?

 

[Latka]

First statement already mention government.....intention to blame is clear.

 

Funny.....sell existing house should return back money to their CPF to fund the 60% downpayment easily.

Could be one party is old age....cannot get long term loan?

 

Anyway....this is a special case...one off.

If this is very common...then the HDB would not be able to sell so many flats at inflated price for the past 10 years!!

 

I mean there is no fundamental wrong in the housing loan policy.

Just that the couple has not enough cash savings....like this also want to blame the gov?

 

Problem is they haven't sell. Perhaps they shud sell first, stay somewhere then collect keys to new flat once funds go back to CPF a/c.

[Gizmore]

First statement already mention government.....intention to blame is clear.

 

Funny.....sell existing house should return back money to their CPF to fund the 60% downpayment easily.

Could be one party is old age....cannot get long term loan?

 

Anyway....this is a special case...one off.

If this is very common...then the HDB would not be able to sell so many flats at inflated price for the past 10 years!!

 

I mean there is no fundamental wrong in the housing loan policy.

Just that the couple has not enough cash savings....like this also want to blame the gov?

 

You have a very warped sense of reality.

[marwing]

KNN, make babies so shiok, never compliment gahment. Now nest exploding, blame gahment.

 

This guy doesn't worth our pity. {Unless he did not tell a complete story on why his current flat does not worth any money}

 

 

[Sk65]

Question,

 

1) with almost $8K of income, why are they not allowed 80% HDB loan? Unless they are already very old?

2) how come they need so much loan when they can sell existing flat to make up part of purchase price? Unless existing flat in negative equity?

 

 

my guess on (1)

same as u,

the working life of the adults is left with the few (say 10) years,

thus bank will not want to loan them for 30 yrs.

 

(2)

i dunno liao

can it be stay private?

but 2BR type

 

[Gukubird]

This guy is poor leh, must be gene not good (Not my logic) why reproduce so many?

 

Remember Singapore's future rest on the shoulder of Foreigner and not Singaporean la

[Watwheels]

I think Shi Weilong has problem expressing what he wants to say lah. If HDB wants 60% or 250k upfront he would have to sell his current flat to cover it. But dan he & his family will have no place to stay for 5 years until the BTO flat is ready.

 

He will either have to take a loan of 250k from bank and pay the interest or rent a place for the next 5 years. This will end up costing him more and a lot of hassle. I dun think it's about affordability. It's the loan which is not flexible enough for him to upgrade to a bigger unit for his family.

 

Is it true HDB wants 60% downpayment? I'm not sure about this.

Edited July 29, 2011 by Watwheels

[Maroon5]

can always take bank loan right?

 

BTW, does the author means he is trying to own 2 HDB flats?

 

[Maroon5]

i jus feel some of these complaints are sob stories without 100% of facts...i thk 1 tat i can rem is how this lady wrote in to the ST abt how she is marginalised in her flat selection, afterwhich self pawned when hdb replied abt how she rejected certain projects and only wanted premium like dawson, pinnacle...sigh pple haha

[Windwaver]

Aiya, why have kids? 50% of my married friends all no kids. They can use the money and 'export' themselves to a nice home in Malaysia when they feel like to

[Redmouthfish]

Did he vote for PAP? If he did, then he cannot complain !

[Sosaria]

B'cos existing rule states that if u currently servicing housing loan, the next loan can take 60% only. Which is a really dumb assed rule where HDB flats are concerned.

Firstly, when they buy HDB, they must sell existing one. Knowing this, why can't HDB grant 80% loan for next flat knowing full well they have to sell existing one?

 

Yes, but this rule introduced last year was intended to curb speculation and an attempt to bring down prices - which is what people wanted anyway! So, in a way, we have brought this situation on ourselves??

 

If scrap this rule now, for sure, the couple can take 80% loan and purchase their BTO... but so will other people who intend to purchase flats for speculative and money-making purposes. Overall, prices will go up again.

 

Granted, this rule was badly implemented and is a crude way of regulating prices. Many genuine upgraders like this couple were inconvenienced.

 

Yes, they could consider giving the couple the usual loan percentage (70-80%) on condition that the couple dispose of their current flat within certain period of time. But if they are unable to? What then? Sure they will appeal and cow-peh, cow-boo again... no win situation! Luckily I'm not policy-maker...

 

I also agree with another poster here that says many of these sob stories are really a bit too much nowadays. Want to change all the laws and rules to fit your unique situation?? Just because you have 3 kids is great ah?? I also have 2, but planned my situation around these rules, how?

 

It's just like a football match... if you want to stay in the game, then play by the rules!

Edited July 29, 2011 by Sosaria