4 handy tips for rookie couples when applying for BTO flats
For many Singaporean couples these days, the words “I think I wanna marry you” — like the Bruno Mars song — translates to applying for a Build-To-Order (BTO) flat together. Not very romantic to say the least, but it’s a huge step to take on their journey towards marriage and a happily-ever-after.
Whilst we know rookie couples of the younger generation can be independent, self-driven and ready to take on the world as one, BTOs are an important purchase not to be taken lightly that require careful research.
Apart from knowing the basics of how to apply for a flat and keeping atop of your finances, it is also handy to know these four tips when you are looking around for your upcoming potential new home.
1. Knowing what grants you are eligible for
Images: HDB, Unsplash
Just like how you remember to check out your online shopping cart with coupon codes, you should also find out what CPF Housing Grants are available when applying for your BTO.
For first-timers, you are eligible for the Enhanced CPF Housing Grant (EHG) if you meet the criteria:
• You and your spouse/fiancé(e) have been employed continuously for 12 months prior and up till application submission
• The average gross monthly household income for those 12 months does not exceed S$9,000
• All household applicants also should not be owners of any properties such as land or buildings (overseas and locally), or have disposed of them in the 30 months before the flat application
To qualify for the full EHG, the flat’s lease must be able to cover the youngest buyer and spouse/fiancé(e) to the age of 95. If not, the EHG will have to be pro-rated.
The EHG amount can range from S$5000 to S$80,000 based on the average gross monthly household income, which is assessed over the 12 months worked prior to submission of your flat application.
It is not as surprising to see students or those in National Service (NS) joining the line-up of BTO rookie couples, so if you belong to the younger demographic, check if you are eligible for the Deferred Income Assessment.
We also hate to burst your BTO bubble but: Before you gleefully decide to make use of your Central Provident Fund (CPF) to finance your BTO, make sure you know that if you sell your flat, you will have to put back the EHG amount (plus accrued interest) into your CPF account.
2. Figuring out which house loan is the most suitable
For young couples, it can be scary to navigate the world of home loans. One reliable source to consider is the Housing & Development Board (HDB), but before you go straight for familiarity, it is important to do your research on what is available on the market.
Some key points on the differences between HDB and bank loans:
• HDB charges a 2.6% interest rate (1 January 2021 to 31 March 2021), whilst banks can offer cheaper rates (but numbers change over the years)
• HDB loans have a 10% downpayment (which can be completely paid via CPF), whilst banks require a 25% downpayment (5% has to be via cash whereas the remaining 20% can be via cash or CPF)
• HDB does not charge any fee for early repayment of loans, whilst banks charge 1.5%
Check out this easy-to-understand breakdown between an HDB loan or bank loan by MoneySmart which can help you weigh your options.
3. Thinking ahead when you choose a flat
There are tons of things to consider when picking a flat, from the number of rooms to even the surrounding amenities and facilities.
One important question you might forget to ask yourself is if you and your partner will ever decide to move to another flat in the future. Depending on your answer, it can help you lean towards either a smaller or larger flat. Throw in the discussion of “kids or no kids” and your decision might also change.
And when picking a flat, don’t forget to think outside the box (literally).
• If you’re planning to start a family, school yourself on the educational prospects around the neighbourhood
• Keep track of what forms of public transport are available and how accessible the different amenities, facilities and leisure activities are for you
If you want to keep a tab on what development plans are cooking for your potential new vicinity, make use of the URA Master Plan.
4. Mapping out your financial budgeting long-term
The next most exciting part about getting your own home is probably being able to put your bookmarked interior design ideas to good use. But don’t forget, doing up your flat means more money is flying out of your pocket.
This is on top of the amount that you’ll be spending quite a while repaying, which are the remaining flat costs and home loans along with interest accumulated. Don’t forget to throw in your bills, utilities and insurance. But wait, that’s not all — you’re probably going to have your wedding soon too — right?
Whilst we’re not trying to stress you out, it’s important to remember to keep tabs on your moolah. So, whether you like doing the math or not, it’s time to whip out your calculators and map out your flat’s financial budget for the short and long-term.
If you and your partner are seeking a flat, make sure to keep up with the upcoming BTO launches (February 2021) for Woodlands, Kallang/Whampoa, Geylang, Bukit Merah, Bukit Batok, Toa Payoh and Tengah. This is also a good time to activate your kiasu-ness and keep up with any launch updates by subscribing to the HDB eAlert Service.
Feature image taken from HDB