Top 5 Best Hidden Photography Locations in Singapore
Singapore, a vibrant city-state known for its iconic landmarks and bustling urban landscape, is also home to numerous hidden gems...
Read More
TLDR
When selling your home in Singapore, ensure you pay off your outstanding home loan, refund any CPF monies used, and cover miscellaneous fees like agent commission and legal fees. For upgrades to Executive Condominiums (EC), consider whether to settle your mortgage upfront or use sale proceeds. Existing property loans are exempt from TDSR, allowing you to obtain a second loan for upgrades. Consider your financial situation and consult with experts for strategic real estate advice.
If you’re a first-time home seller, there could be things you’re not familiar with. You might ask yourself, “What happens to my mortgage when I sell my house?”
Or if you’re going from a flat to a condo or EC, you might wonder how much of your HDB sale proceeds you’ll be able to use.
Fear not – we’ll help you work it out!
Can You Sell Your House Before Paying Off Your Mortgage?
Absolutely! Yet, in order for the ownership of the property to be officially transferred to the buyer, you must pay off your current loan first.
Your Sale Proceeds Will Be Used To Pay Off Your Mortgage
Selling your home comes with several financial considerations – like paying off your mortgage, refunding to your CPF, managing grants and commissions, and more – that will impact the final sale price.
Keep these details in mind and you’ll be prepared to navigate the process with confidence.
Pay Your Outstanding Home Loan
Your first step should be to take care of any outstanding home loans, be it from HDB or a bank. The amount will be taken from the sale proceeds. With your CPF, you can cover the downpayment and any additional expenses such as stamp duties and legal fees.
Refund your CPF monies
If you had utilized your CPF Ordinary Account (OA) funds to pay for your home, you would need to reimburse the principal amount, plus any accumulated interest, back to your CPF account.
This could have been utilized to finance your down payments, monthly payments, and buyer’s stamp duty. Moreover, for those who had been awarded any housing grant, you would have to return it to your CPF OA.
To ensure that you take into account the accrued interest for all of the above, remember that this is the interest that the principal amount would have earned if it was sitting in your CPF OA instead of being used to pay for your house.
With a current interest rate of 2.5% per annum, we have provided a step-by-step breakdown of calculations in our article.
As an alternative, you can log in to your CPF account or use HDB’s sale proceeds calculator.
Don’t let the amount taken from your sale proceeds discourage you; the amount refunded to your CPF account can always be used to finance your next home!
Miscellaneous Fees – Agent Commission, Resale Levy Etc
Your sale proceeds will also cover a variety of additional costs, such as an agent commission (typically 2% of your home’s selling price), legal fees, and a resale levy (if applicable).
Remember, agent commission is negotiable – so don’t hesitate to make sure you get the best deal! Plus, keep in mind that if you’re looking to buy a subsidised flat for your next home, you’ll likely be subjected to a resale levy.
Should You Pay Your Existing Mortgage Upfront If You’re Waiting For The Completion Of Your New EC?
When you decide to upgrade from an HDB to an EC, you have the advantage of not having to put your current home on the market for six months after you receive the keys to your new EC.
Furthermore, you won’t have to pay the Additional Buyer’s Stamp Duty (ABSD)! You may be wondering if it’s better to settle your mortgage loan ahead of time or keep up with the monthly payments until you can sell your house; the choice is yours!
When considering your next purchase, it’s essential to look at your cash flow, available financing, and living expenses. Ask yourself if you have enough money to pay off your mortgage, plus enough extra to cover the downpayment, legal fees, BSD, and resale levy (if applicable).
Rather than paying off your mortgage upfront, you could use the sale proceeds from your property to cover the remaining balance.
Having more money in the bank for emergency funds or investing it in higher-yielding options could also be beneficial.
Ultimately, it’s up to you to consider the advantages and disadvantages of both choices.
Exemption Of Existing Property Loan From TDSR
Even if you already have an existing property loan, you can still obtain a second loan.
For instance, if you’re looking to upgrade your HDB flat, your current mortgage payments won’t be calculated into your Total Debt Servicing Ratio (TDSR), which means it won’t affect the amount of money you can borrow for your new property.
To get the loan, you’ll need to provide certain documents such as a copy of the HDB approval letter and a letter of undertaking for the sale of your HDB flat.
If you’re selling an EC (after MOP) or a private property, you don’t have to worry about TDSR – simply provide a signed sale and purchase agreement with the buyer and a certificate from IRAS to prove stamp duty payment, and your monthly loan repayments are taken care of!
Should You Buy, Sell or Wait?
If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?
It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.
I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.
I can help you by:
- Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
- Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.
You May Also Like …
6 Myths About Using Your CPF For Housing
TLDR When it comes to purchasing a house in Singapore using CPF funds, there are several myths that need to...
Read More
Top 5 Reasons : Why Ultra-Rich Families Racing To Park Wealth In Singapore
Singapore, a small island nation in Southeast Asia, has become a magnet for the world's ultra-rich families seeking to park...
Read More
Top 5 Reasons : Why Do Singaporeans Still Flood The Property Market?
Singapore's property market has been a hot topic of discussion for many years, with its resilience and growth attracting both...
Read More
Top 5 Tips : Finding the Right Property: Location, Size, and Price in Singapore Real Estate
Singapore, known for its diverse culture, strong economy, and excellent infrastructure, is a popular destination for real estate investments. The...
Read More
Checklist for First-Time Homebuyers in Singapore: A Guide to Viewing Condos
TLDR The checklist provides essential steps for first-time homebuyers in Singapore to consider when viewing a condo. It includes aspects...
Read More
Top 5 Factors to Look for in a Property Developer
With a highly competitive property market, it's crucial to choose a property developer that you can trust to deliver quality...
Read More
Does Sell 1 Buy 2 Strategy Still Works Today in 2024?
TLDR When considering the "Sell One By Two" property investment strategy, keep in mind that it involves selling your previous...
Read More
5 Things to Know About Singapore’s Urban Redevelopment and Landscape Changes
As one of the world's most densely populated cities, Singapore has undergone significant urban redevelopment over the past few decades...
Read More
Top 5 Best Hidden Boutique Hotels in Singapore
Singapore, a vibrant city-state known for its iconic landmarks and diverse culture, offers a plethora of accommodation options for travelers....
Read More
Top 5 Places to Buy Local Art in Singapore
Singapore, a melting pot of cultures and traditions, is not only known for its breathtaking cityscape, delectable food, and shopping...
Read More
ANALYSIS: Unveiling the HDB Towns with the Steepest and Lowest Price Surges!
TLDR The real estate market for HDB flats in Singapore has witnessed significant growth, with prices reaching new highs. The...
Read More
Beyond Marina Bay Sands: Uncovering Singapore’s 5 Little-Known Secrets
Beyond Marina Bay Sands: Uncovering Singapore's 5 Little-Known Secrets Singapore is a small country with a rich history and culture....
Read More
5 Reasons Why Your House Isn’t Selling – and How to Overcome Them!
TLDR When trying to sell your home, ensure it is competitively priced based on its unique features and the current...
Read More
Navigating Singapore’s Real Estate Market: The Truth Behind 5 Common Misconceptions
The real estate market in Singapore is known for its stability and attractiveness to investors both locally and internationally. However,...
Read More
The Lease Buyback Scheme Is A Strategy That Could Help You Retire Comfortably In Your HDB Flat
TLDR The Lease Buyback Scheme (LBS) trend among older Singaporeans is slowly gaining momentum, despite initial reluctance. The scheme allows...
Read More
A Step-by-Step Guide To Upgrading From an HDB Flat To Your a Private Property
TLDR Understanding the complexities of upgrading from an HDB flat to a private property in Singapore involves selling your HDB...
Read More
Top 5 Fine Dining Restaurants in Singapore if You are Visiting Us!
Top 5 Fine Dining Restaurants in Singapore if You are Visiting Us! Singapore is known for its diverse and delicious...
Read More
5 Factors : The Benefits Of Investing In A Property With Good Access To Green Spaces In Singapore
Real estate investment has always been considered a sound investment decision, as it offers long-term growth potential and a reliable...
Read More
Should You Keep Your Resale HDB Flat When Buying a Private Property? 5 Key Factors to Consider
TLDR In Singapore, owning both an HDB flat and a private property has become complicated due to factors like Additional...
Read More
