Updated: May 6
Why Condo is pricey but yet people still buy❓🤔 In Ep 8, we look into the [𝗜𝗻𝘃𝗲𝘀𝘁𝗼𝗿 𝗚𝘂𝗶𝗱𝗲] on How People Play Condo .... Yes play to win !
You will learn that condo owner do not need to cash out by selling. That is very different from HDB.
Cash-out without selling
1. They can take an equity term loan for their condo (completed construction). Cash = Valuation minus CPF usage with accrued interest and the outstanding loan
The interest of the equity term loan is the same as the interest of the bank housing loan.
Do note that the monthly instalment payment has to be made in cash only for equity term loan.
2. Decoupling or Part-Purchase to free up another owner finance. Some people embed these into selling 1 HDB buy 2 properties. One for owner-stay and one for investment.
3. Full Leverage Power instead of a higher loan for condo vs HDB. This is due to TDSR (Their monthly loan commitment cannot exceed 60% of their gross monthly income) vs MSR (Their mortgage instalment cannot exceed 30% of their gross monthly income). Imagine the buyer have $0 debt, they can borrow twice as much loan.
There are ways for buyers to overcome TDSR and ABSD and lower monthly instalment too if they know how.
What if the owner prefers to sell ?
Condo owners can sell it anytime, normally after 3 years to avoid seller stamp duty if they have purchased the property on and after 11 march 2017. They have the advantages of these to value-add for the maximum profit at a shortest possible of time.
Sell to local and foreigner
Sell with paper gain
Sell with tenancy
Sell with collective sale
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