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The Ultimate Guide for Newlyweds to Securing Your First Home on a Budget

Ohmyhome

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Written by: Guo Zhenhao

Purchasing your first home can be a real headache. What housing grants am I eligible for? What can I afford?

Don’t worry. You are not alone in figuring out this complexity. With this guide, you can have the essential information you need to buy your first HDB resale home within your budget.

5 Considerations When Buying an HDB Resale Flat for Newlyweds

1. What are you eligible for?

In general, there must be at least one Singapore Citizen (SC) or two Singapore Permanent Residents (SPR) listed in an HDB resale flat application.

Register your Intent to Buy through the HDB Resale Portal, you will receive an instant assessment on your eligibility to buy an HDB resale flat, for CPF housing grants and HDB housing loan.

Keep in mind that if you are purchasing an HDB resale flat with a spouse, you’ll have to be at least 21 years old. Check out the complete list of eligibility conditions to buy a resale flat.

2. What is your budget?

Knowing where you stand financially, and assuming that property types within your budget range is a crucial first step. The following are the cash pools available for you to tap on:

  • Available cash savings
  • Available CPF Ordinary Account (OA)
  • CPF Housing Grants
  • Housing loan amount

Knowing how and when to tap into these cash pools could make the difference between saving a fortune or letting your money go down the drain. For example, you might be tempted to use your CPF for lump sum payments, but this is in fact only worthwhile if the interest rates are higher than 2.5%. Be sure to do thorough research so that you don’t find yourself stuck in an unfavourable payment plan!

3. What housing subsidies can you claim?

Here are the housing grants for first-timer applicants.

Housing Grant Details Maximum Grant Income Ceiling
Family Grant Provides assistance for married/ engaged couples or families who are first-timer applicants buying an HDB resale flat. Up to $50,000 $14,000
Enhanced CPF Housing Grant (EHG) From September 2019, first-timer applicants for new and resale flats can enjoy the EHG. There are no restrictions on choice of flat type and location. Up to $80,000 $9,000
Proximity Housing Grant Families are eligible for a $30,000 grant when living with parents or $20,000 if buying a flat within 4km of the parents’ address when buying a resale flat. Up to $30,000 None

You can get a maximum of $160,000 worth in grants. Make sure to maximise your grants to save in the long run. This would reduce your overall loan quantum so that you can clear your mortgage faster.

ultimate-guide-newlyweds-securing-your-first-home-budget

4. Which loan should you pick?

Before taking out a loan, be sure to do thorough research. A common misconception is that bank loans are invariably more expensive than HDB loans, when the HDB’s housing loan rate is in fact 0.1% above the CPF OA interest rate and will remain unchanged at 2.6% per annum from 1 April 2020 to 30 June 2020.

Here are the key differences between HDB loan and bank loan.

5. What additional charges should you take into account?

Here’s a summary of the additional charges that apply, arranged according to the type of flat that you will purchase:

Type of Flat Additional Charges
BTO (direct from the HDB) Legal Fee
Buyer’s Stamp Duty
Fire Insurance
Property Tax
Renovation
Resale Flats Agent Commission
Legal Fee
HDB valuation fee
Buyer’s Stamp Duty
Fire Insurance
Property Tax
Renovation

Understandably, this is a lot of information to digest. It is not uncommon for first-time buyers to miss out on one or two key components and make errors when calculating a budget.

With Ohmyhome’s Affordability Calculator, you can get insights into your personal housing loan limit by answering a few simple questions. This in-app calculator also allows buyers to calculate the maximum loan amount they can obtain from banks in line with housing rules, so that they have more visibility on their budget even before beginning their search.

Want to purchase a resale flat but don’t know where to start? Browse over 15,000 unique listings on Ohmyhome app or book a session with our trusted agents to get a recommendation today!

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