Bought at 1st Nov 2017. Appeal at 1st Nov 2021. MOP at 1st Nov 2022.

(By 1st Nov 2021)

Purchased Price: $260k.

HDB3rm in Bukit Batok value: $360k.

Outstanding loan: $140k.

Wife CPF Proceed: $80k. Husband CPF Proceed: $40k. Cash: $100k.

Wife Max Loan: $400k. Husband Max Loan: $935k

Wife CPF OA: $30k. Husband CPF OA: $10k.

Solution: Sell 1 Buy 2 (one for stay, one for rent)

Option 1:

Husband buys $1 mil property. (75% Loan: $750k. 5% Cash: $50k. 20% CPF: $200k, BSD: $24,600): Need another $150k OMG!

Wife buys $530k property. (75% Loan: $397,500. 5% Cash: $26,500. 20% CPF: $106k. BSD: $10,500): Ok !!

Option 2: Do 99-1 strategy. Higher-income husband buys cheap house. Then lower-income wife buys expensive house and husband pays 1% ABSD.

Husband buys $600k property. (75% Loan: $450k. 5% Cash: $30k. 20% CPF: $120k. BSD: $12,600)Need another $80k CPF.

Wife buys $1mil property. (5% Cash: $50k. 20% CPF: $200k. BSD: $24,600)Need another $112k CPF.

(Husband comes in. 75% Wife and Husband Loan: $750k. 3% BSD + 12% ABSD: $1500)

Option 3: Buy one unit and convert into dual-keys

Couple buys $1.12 mil property. (75% Loan: $840k. 5% Cash: $56k. 20% CPF: $224k. BSD: $29,400): Ok !!

E.g. 2Bdr DK at Parc Clematis, #14-44, $1,188,000

Challenge 1: NOT ENOUGH MONEY. Ideas to come up with money

i)   Is there money in your other bank account or other investment?

ii)  Is there money in your CPF Special account investment that you can transfer back to OA?

iii) Sell your stocks

iv) Cash out 20% of your private house from the bank

v)  Borrow money from your parent with no interest. They may have savings, stocks or business.

vi) Get help from your parents by cashing out 20% of their private home

vii) Apply an equity term loan from the bank

Challenge 2: "I can't borrow max 80% bank loan."

Solution:

Max 80% Bank loan is based on your monthly income, age and total debt servicing ratio (TDSR).

Bank looks at 3-month payslip for employed and 12-month payslip for self-employed. Talk to your company HR to adjust the relevant payslips to be submitted such as Pay-Later, Pay-First, Additional  allowances or commission.

60% Total Debt Servicing Ratio is usually an headache that stops people from borrowing. To reduce your debt, look at which contributes to that. Normally is Car Loan and Credit Card Loan. If it is car loan problem, get an in-house financing from the car company itself excluding Hong Leong and Singapura. Though interest is high, it is not recorded in CBS (Credit Bureau System). If it is Credit Card loan problem, change the repayment type to personal loan instead of balance loan transfer. Pre-pay the monthly amount in AXS machine 7 days before bank statement date and you will make it zero. Just need to do it for 1 time.

Challenge 3:   "I don't want to pay ABSD."

Solution:

Decoupling is the solution. Either each spouse owns a separate house immediately or use the lower-income spouse to hold on to a first expensive house and then the higher-income buy the second cheaper house and pay lower ABSD.

Challenge 4: "I don't have enough money to service the loan."

Solution:

Either you lower the monthly instalment or you rent out to pay the instalment.

To lower the instalment, you can look at loan tenure stretching.

Typical bank loan max is 30 years. (Calculation formula: 65 - Your age = Loan Tenure) 

Loan tenure stretching is 33 years (Calculation formula: 35 - 1 year - no of year you are holding on in your earlier loan usually 1 = 33)

How to do loan tenure stretching?

Refinance from one bank to another bank with no lock-in period. After first loan disperse the amount, choose a second bank loan with lock-in period for lower interest.

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