etcmat wrote:Hay people, just looking at some of the guides on buying a
property.
"How much cash upfront you willing to pay for the property? How much CPF in your ordinary account that you can use for the purchase? The latest MAS ruling allows purchaser to loan up to 80% of the valuation or purchase price, whichever is lower. 10% must be paid in cash and the other 10% can be paid using CPF or cash."
Can anyone tell me what CPF is please?
I also read somewhere that as I am a foreign buyer I can only lend up to 60% of the valuation cost, and not 80%! Is this true?
Cheers,
Mat
Hi Mat,
The norm for foreign buyers is 70%, but if you have a strong financial backing, they might be able to push up to 80%.
FYI on CPF (Taken from
http://www.finatiq.com/helpcentre/Hcr_Basics_CPF.shtm )
What is Central Provident Fund?
The Central Provident Fund (CPF) is a government-run social security scheme. Funds are contributed both by you and your employer and can be used by you for retirement, home ownership, healthcare expenses, your child?s tertiary education, investments or insurance. Under statutory law, all Singapore citizens and Permanent Residents in employment have to contribute to this scheme, while self-employed Singapore citizens and Permanent Residents have to contribute to Medisave only.
From 1 January 2004, the total CPF contribution rates are 33% if you are below 55 years old, 18.5% if you are between 55 and 60, 11% if you are 60 to 65, and 8.5% for people aged over 65 years. The CPF is divided into four types of accounts Ordinary, Special, Medisave and Retirement (for those aged over 55 years).
Ordinary account: the savings can be used to buy a home, pay for CPF insurance, investment and education.
Special account: for old age, contingency purposes and investment in retirement-related financial products.
Medisave account: the savings can be used for hospitalisation expenses and approved medical insurance.
Retirement Account: You can withdraw your CPF ordinary account savings in a lump sum when you reach 55 years old (on or after 1 Jul 1999), after a statutory required minimum sum of S$84,500 has been set aside. The amount you can withdraw will depend on your available balance. You can make future withdrawals six months after the initial withdrawal (if you are retired) or every three years. Fixed monthly withdrawals from the retirement account will start when you are 62 years old. Alternatively, the entire amount can be used to purchase an annuity, which also provides a fixed monthly income.
How can CPF be used?
1. Property
The CPF Ordinary account is approved for the purchase of residential (only for 80% of the value) and commercial properties (only for 70% of the value). Residential real estate includes freehold and leasehold private property (at least 60 years lease remaining) located in Singapore.
You can use the entire funds in the Ordinary account to cover the initial down payment for HDB. For private residential property, you have to pay your initial downpayment in cash. You can use your future CPF contributions to finance installment payments for these purchases. If your monthly contribution does not meet the mortgage instalment in full, you can use funds from the Special account but capped at 6% of your November 1998 salary. However, if in 1999 you did not accept this offer, you will not be able to use the special account.
If you sell your property, the proceeds from the sale of your property must be used to first repay the principal amount withdrawn plus accrued interest to your CPF account. Any remaining balance is credited to you.
