Hi Ben,
The minimum downpayment is 20% or 30%, and the maximum bank loan is 80% or 70%; the latter figure if you have any existing home loan.
There is only Progressive Payment Scheme available (there is no more Deferred Payment Scheme and Interst Absorption Scheme available).
Here is the breakdown and timeline for the Progressive Payment Scheme.
5% - Issuance of OTP
15% - 8 weeks from OTP
10% - Foundation work completed
10% - Concrete Framework completed
5% - Brick wall of unit completed
5% - Ceiling of unit completed
5% - Doors, windows, electrical and plumbing works completed
5% - Car Park, roads and drains completed
25% - TOP date
15% - Completion Date
The bottom 80% is where the bank loan comes in. Also do note that not all owners will pay at the same time. For example, if a owner has the first ground unit, he will pay the % of the brick wall/ceiling works completed earlier than an owner who has the penthouse unit.
Therefore, when each payment is due, the bank will pay out to the developer, and you will begin to pay installments to the bank. There are different packages from banks that you can take. Some offer only interest repayment during the construction period(resulting in a smaller repayment sum per month), some offer capital+interest repayment. Some also offer a no lock in period, and you can pay up all or part of the loan anytime you want without incurring a penalty.
In your case, where you do not have to take up a full 80% loan, there are some points to note.
Firstly, the order of payment must be in this order: 1.cash then 2.CPF then 3.loan.
For example, you are only taking a 40% loan. After paying the first 20% downpayment, you cannot get the bank to disburse the 40% for the works up til TOP, and then you pay the other 40% upon TOP. Instead, you have to pay the 40% up til TOP, and then the bank will come in at TOP for the other 40%. That means that even though you have the excess 40%, you have to use it to pay first, and the bank loan only comes in at the back. Remember that the order is Cash then CPF then bank loan.
Secondly, you will only need to pay your bank loan installments after the respective %sums are disbursed.
Depending on the construction speed and expected TOP date, your payment may vary. There are some launches who sell for 1 1/2 years before starting any construction. Therefore, if you buy and sell before any work is done, you do not even have to pay anything more that the 20% downpayment. (But of course now sellers are liable for seller stamp duty if they sell within 3 years). There are also launches that are selling while the condo is already under construction. If you buy when the condo has already finished the foundation and concrete framework, you will have to come up with the 20% very soon after paying the downpayment.
As such, for your case, you need to plan your finances very well. Firstly, you need to decide how much loan to take based on your current available cash and your current siutation regarding rent. For example, if you have 350k in cash and you wish to buy a unit that is 700k, you will need a 50% loan. The loan can only come in at the payment where the doors, windows etc are completed. You then need to calculate the time period if from the point of the start of bank loan repayment to TOP date where you can start renting out to earn rent. Let's say if the time from the start of bank loan repayment and TOP date is 6 months, it means that you will be paying repayment of 10% (5%+5%) of the loan for 6 months. You will need to see if you can be financially ok for this 6 months.
Now, let's say you have 350k cash and you wish to buy a property that is only $583k, you will only need a 40% loan. That means that the loan will only be disbursed at TOP, and you have to start paying at TOP. But at TOP, you can already rent out the place for rental income.
My advice to you is to carefully consider these 3 factors.
(1) Cash available on ha
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I am trying to understand the pros of the payment scheme for incomplete developments for the buyer. According to what I found from internet, there are stages of payment that is defined by the completion of the development. For example when TOPed, %25 should be paid and %15 on the completion date. If this payment steps will buy me time until the TOP date, I would seriously consider buying a house at this moment. As I mentioned, my 2 problems are: 1. Downpayment, 2.When paying back mortgage (and a possible loan to complete downpayment amount), the rent of my current place.