Opinions about upgrading

[porkfloss]

Hi, I am in my early 40s and I am considered debt free as my current HDB has been paid off and there is no outstanding loan (eg car) to service.
 

Recently I have thoughts about upgrading to a condo to provide a better living environment for my family and young kids. My current house is abit small so the extra space and the facilities would definitely enhance the living experience. 
 

However, I am still reserved as that would imply that I would need to restart the loan again till I retire as it would also mean that all my incoming CPF and a proportion of cash would be used to service the mortgage, which would reduce growing my retirement fund. 
 

Just not sure if I should maintain my current worry-less lifestyle or to have a better living environment at the expense of having debts again.

Opinions?

Edited March 3, 2021 by porkfloss
Edit

[Kumweng]

Hi bro

Nobody know what is happening tomorrow. Maybe kena retruench, sick or someone closest to you hospitalise.

Best is to go debt free. Keep the money for raining day.  Money is forever not enough, Trust my word.

Btw, HDB flat is bigger than a condo.. Cheaper and econ to keep.

[Silverkris]

I have been contemplating about this option too last year.

I stayed in a rather central DBSS already and the unit is about to be fully paid off, though at that time people are saying I am crazy to pay that kind of pricing for a HDB.

But after I have been house-visiting on a few new condos, I feel that by moving into a condo may not be my lifestyle of "upgrading".

Besides the facilities and prestige, most of the rooms can barely fit a single bed, and my current rooms can put in a piano, a study table, wardrobe plus a super single bed for my kid.

I am those that emphasize  "upgrading" by having more space for the whole family instead of cramping together.

But each will have their own definitions of upgrading and I do not know yours.

Besides the size, the idea of taking such a big loan, which I think will never be paid off in a lifetime (people always said to downgrade later) will always weigh in my mind. 

Under HDB, we can still be rest assured that in case anything happens, HPS will be used to paid off the remaining loans and serve no burden to your family. This is not the case in condo and you will have to pay your mortgage insurance (by cash) if you want. Imagine the premium for a $1M loan policy.

So you might need to consider all of these, OR simply living your life stress-free.

Just my humble opinion.

[mersaylee]

Debt free is stress free is priceless ✌️😁

 

[13177]

Lets say you still have loan in your current hdb, it is advisable to sell the current one and buy another hdb? Reason maybe want to change location?!

[Davidklt]

1 hour ago, porkfloss said:

Hi, I am in my early 40s and I am considered debt free as my current HDB has been paid off and there is no outstanding loan (eg car) to service.
 

Recently I have thoughts about upgrading to a condo to provide a better living environment for my family and young kids. My current house is abit small so the extra space and the facilities would definitely enhance the living experience. 
 

However, I am still reserved as that would imply that I would need to restart the loan again till I retire as it would also mean that all my incoming CPF and a proportion of cash would be used to service the mortgage, which would reduce growing my retirement fund. 
 

Just not sure if I should maintain my current worry-less lifestyle or to have a better living environment at the expense of having debts again.

Opinions?

Why not upgrade to a better flat ? Masionette.

[Kopites]

Condo is not an upgrade imo.

Besides size (space) one still need to be contend with neighbours of foreign nationalities if you are lucky.

Also you need to consider freehold or 99 lease?

Landed would be deem an upgrade imo as you do get the privacy/space.

Btw, TS you didn't mention your current hdb capacity (3/4/5?). Your child ages. 

[13177]

2 minutes ago, Kopites said:

Condo is not an upgrade imo.

Besides size (space) one still need to be contend with neighbours of foreign nationalities if you are lucky.

Also you need to consider freehold or 99 lease?

Landed would be deem an upgrade imo as you do get the privacy/space.

Btw, TS you didn't mention your current hdb capacity (3/4/5?). Your child ages. 

Condo consider upgrade as status lo. No matter what is the condo size or if it is 99 or freehold lease, afterall it is still consider as private lo. 😂

[Macrosszero]

1 hour ago, porkfloss said:

Hi, I am in my early 40s and I am considered debt free as my current HDB has been paid off and there is no outstanding loan (eg car) to service.
 

Recently I have thoughts about upgrading to a condo to provide a better living environment for my family and young kids. My current house is abit small so the extra space and the facilities would definitely enhance the living experience. 
 

However, I am still reserved as that would imply that I would need to restart the loan again till I retire as it would also mean that all my incoming CPF and a proportion of cash would be used to service the mortgage, which would reduce growing my retirement fund. 
 

Just not sure if I should maintain my current worry-less lifestyle or to have a better living environment at the expense of having debts again.

Opinions?

Not enough information to go on, these are relevant to the decision:

• How much liquid assets do you have
• How many kids and what age
• Any aged parents to take care of
• Nature of job/job security
• Spouse employment and financial status
• Location/value of current flat vs. intended condo

Make no mistake, if you want to upgrade from your current flat to a larger condo, unless you are moving from a prime location (e.g. Queenstown) HDB to a OCR or further condo, you will definitely need to stump out some cash. 

[Jamesc]

That's what people said about the nice City View DBSS.

I don't stay there but I think they made an excellent decision.

1 hour ago, Silverkris said:

I have been contemplating about this option too last year.

I stayed in a rather central DBSS already and the unit is about to be fully paid off, though at that time people are saying I am crazy to pay that kind of pricing for a HDB.

But after I have been house-visiting on a few new condos, I feel that by moving into a condo may not be my lifestyle of "upgrading".

Besides the facilities and prestige, most of the rooms can barely fit a single bed, and my current rooms can put in a piano, a study table, wardrobe plus a super single bed for my kid.

I am those that emphasize  "upgrading" by having more space for the whole family instead of cramping together.

But each will have their own definitions of upgrading and I do not know yours.

Besides the size, the idea of taking such a big loan, which I think will never be paid off in a lifetime (people always said to downgrade later) will always weigh in my mind. 

Under HDB, we can still be rest assured that in case anything happens, HPS will be used to paid off the remaining loans and serve no burden to your family. This is not the case in condo and you will have to pay your mortgage insurance (by cash) if you want. Imagine the premium for a $1M loan policy.

So you might need to consider all of these, OR simply living your life stress-free.

Just my humble opinion.

 

[Voodooman]

How secure is your job and do you have a skill set that will continue to be in demand for next 20 years? 

Are you planning to downgrade to raise retirement funds when you retire?

[Jamesc]

Instead of spending the money upgrading

spend the money on holidays is what I would do.

Do you like Japan?

 

[Jamesc]

I believe in fate and I always let fate decide the next course of action.

Buy $1 toto for 2 draws every week.

If strike first prize then upgrade.

 

[Weez911]

TS, this is a very personal decision and probably only you and your wife have the answer after weighing your finances, future job/career prospect and how you value quality of life.

To me, early 40s is alright if you are comfortable with your career/industry. Of course, no one knows our future but if you are a double-income family then I think still ok. Having a controllable debt is not a bad thing as I personally find it motivating. Also, housing is not an expense but an asset. A wise man once told me to drive the cheapest car possible but buy the biggest house you can ever afford..

Hope this helps. 👍

Edited March 3, 2021 by Weez911

[Volvobrick]

Most condo dwellers don't use the facilities and are subsidizing the small % that overuse the facilities. Which group are you in? 

And definitely the new condos are so small, smaller than HDBs.  Unless you camp in the clubhouse, you will have less living space.  Maybe buy a bigger HDB near one of the Safra/Home Team clubhouses and walk over to use on the cheap.

Interest rates are at historical lows now, but who know when they will go back to 5, 6% when I took my first mortgage.  That will drastically change all cash flow projections.  But if you income situation and potential is good with enough reserves, yes, it's existing to do house hunting! 

Edited March 3, 2021 by Volvobrick

[Kklee]

1 hour ago, porkfloss said:

Hi, I am in my early 40s and I am considered debt free as my current HDB has been paid off and there is no outstanding loan (eg car) to service.
 

Recently I have thoughts about upgrading to a condo to provide a better living environment for my family and young kids. My current house is abit small so the extra space and the facilities would definitely enhance the living experience. 
 

However, I am still reserved as that would imply that I would need to restart the loan again till I retire as it would also mean that all my incoming CPF and a proportion of cash would be used to service the mortgage, which would reduce growing my retirement fund. 
 

Just not sure if I should maintain my current worry-less lifestyle or to have a better living environment at the expense of having debts again.

Opinions?

IMHO.
The important question would be,  if you remain status-quo, will you continue to be debt-free  years from now ? 
E.g. you have no outstanding car loans now,  after the COE expire, will you need to loan again ? 
With young kids, there will be monetary commitment for years.  
While better living environment would be a plus for now,  kids will eventually grow and go to school, which takes up most of their time.
All these needs to be taken into consideration.

P.S.   Every night I occupy about 2m x 1.5m space for 5 hours.   Condo cost more,  HDB cost less. 

 

 

[Jamesc]

When I was young I was very good looking and had many gfs.

So I let fate decide.

The first one the rubber band broke, that's the one I married.

And it worked out pretty well really except for the MIL.

But I let fate decide that as well.

Not all cars have very good brakes right?

And an accident can happen at any time.

 

[Didu]

I remember my ex-colleague last time sell one unit, then apply 2 separate banks for mortgage concurrently for 2 different units. Neither bank is aware of the other application. I think now no more this kind of lobang.