House Moving 101 - Buying A House
Read my previous post if you have missed this series:
Pre-purchase, Renovation and Pre-moving
EC over BTO
When I was working in a Telco company, I had many very young colleagues. A decade forward, many are in the midst of settling down and having children. I see some buying Executive Condos (EC), some Build-To-Order (BTO) HDB flats, some resale HDB flats. I wish I have magic power to tell every one of them this: if you have the means, consider getting EC.
In my opinion, EC is a substitute of HUDC - 'They were first built in 1974 to cater to a sandwiched class of Singaporeans who can afford something better than the typical public housing, or HDB flats, but yet still find private housing unaffordable'. Now that there is no more new HUDC, EC has, in some sense, substituted it.
We have witnessed how all these HUDC got privatised and then got enbloc sale. Likewise, EC is of similar mechanism. The land is heavily subsidised by the government, thus, the prices of EC are a lot lower than private condo. Yet, once the EC turns 10, it is automatically converted to a private condo where one could sell to foreigners. In this aspect, owners of EC stand to gain most compared to owners of BTO. So, if you can considering between an EC or a BTO, and if financially you could afford to, EC will potentially give you a far better investment gain.
EC or BTO
EC vs BTO vs Resale
Single Ownership vs Joint/Co-Ownership
Whether it be an EC or a BTO (even a resale HDB flat), you have no choice but to have dual ownership (of course, there are exceptions for unique cases but I will not discuss here). However, when it comes to private properties, you can have a choice to single ownership or joint/co-ownership.
Because of the property cooling measures, Singaporeans will be slapped 7% Additional Buyer Stamp Duty (ABSD) on their second residential property. Thus, if getting a private residential property is the choice of a married couple and it is their first residential property, do consider purchasing it under one person's name instead of joint-ownership if it is financially viable. With this arrangement, the other spouse has the option to get a second residential property (investment property) without having to pay the 7% ABSD. If the couple is concerned with asset allocation upon unforeseen circumstances, the couple could always draft a Will to protect the interest of both parties.
What is ABSD?
The Mortgage Loan
For any layman, one of our biggest loans in our lives is probably the mortgage loan. Different banks offer different rates with different strings attached. Unless you are a prestige client of the bank(s), the mortgage rates that are offered to you are mostly for the mass. It can be tiring calling up banks, asking for quotes and comparing them. We prefer to engage a Mortgage Broker to do that for us to save us our breath and time. The Mortgage Broker will present the rates to us according to our selection criteria and present the information in a comparative chart which will definitely aid us in decision making. The Mortgage Broker gets his/her commission from the bank, so we need not pay anything for such service. We got our housing loan through Amanda from Mortgage Wise. You may contact her at 9889-2644.
When you get a mortgage loan from the bank, the bank will demand for a Mortgage Loan Insurance to protect them so that, in case the borrower(s) pass on, the bank can still recover the outstanding loan. But, what if there is a fire at home, or for that matter, your neighbouring unit caught a fire and damage your house. Without an insurance coverage, you will have to bear the cost of rectification work. It really means tens or hundreds of thousand of dollars of renovation work and furnishing going down the drain.
To safe guard us on this unforeseen and undesirable situation should it happen, it is necessary to get a Fire Insurance coverage. If you are also concerned about theft as well, then get a Fire and Theft Insurance. We have a fire insurance to cover my renovation cost and home content. Our General Insurance Agent is Julia from Income. You may contact her at 9829-5529.
Coming up next is a product review on An Air Purifier cum Mosquito Repellent which is really what we need in my new place. Stay tuned.