Before visiting any new launch condominium showflat you will need to have the right information especially about your financial strength.it is paramount to understand that your income is not the only thing that limits your purchasing power. The purchasing power is also determined by the other properties that you own. You should also understand that the optimum amount you can borrow from a bank is not just restricted by the maximum loan cap. Instead, it is determined by the financial commitments you have every month. Here are 5 things you need to do before visiting any showflat.
1. CPF Usage
When you are buying a property for the first time the maximum amount of CPF that you can use is the entire Ordinary Account (OA) funds that you have. But if you are purchasing a second property you need to make sure that you fulfill at least $75, 000 in your Special Account (SA) and in your OA.
2. Getting Your Housing Loan (AIP)
To be able to deal with your property budget you need to get a loan Approval in Principle (AIP). This is an important step while buying a property but most buyers tend not to take seriously. When you get the AIP you will know the amount that the bank is able and willing to lend to you so that you can buy a property. It takes just three working days to get the AIP and it is free. The documents that you will need to get the AIP are;
- Copy of passports or NRIC of all the people purchasing the property
- The latest credit card statements
- An application form
- A form of declaration for all the credit facilities
- A HDB page showing the status of HDB
- If you are employed you need your latest pay slip for the past three months and tax assessment return
- If you are employed you need the latest twelve months of CPF contribution
- Self-employed and employed people need to have the last one year IRAS tax assessment return
3. Your Additional Buyer Stamp Duty (ABSD) Bracket
Before visiting a showflat gallery you also need to know your ABSD blacked. Singaporeans are not charged anything on the first property purchase but the second and third property purchases are taxed seven and ten percent respectively on the price of the properties. Permanent residents are charged five percent on the first purchase and ten percent on subsequent purchases. Entities and foreigners are taxed fifteen percent on every purchase.
4. Knowing the Normal Progressive Payment Scheme (NPS)
Currently the NPS is the payment scheme that is used by almost all new condo projects. After selecting and confirming your plan you will have to pay five percent in cash to the account of the project developer in exchange of the Option To Purchase (OTP). The developer will within two weeks send the sales and purchase agreement to your address. After this you have received the agreement you will have three weeks to exercise the contract. If you fail to exercise the contract within the three week seventy five percent of the initial payment will be sent back to your account. The other fifteen percent will be payable within eight weeks from the initial date of OTP.
5. The Process of Balloting
You will have one to two weeks to review the new launch condo project before it has been started. If you preview the showflat within this period you will have a chance to register for a non-obligatory seat during the date of the launch. This will give you the privilege of balloting for the units before the public is allowed to ballot. To register for the balloting you will need a copy of the NRIC for the registrant, a filled and signed Expression Of Interest (EOI) form and a check that is addressed to the account of the developer. In case you change your mind and decide not to make a purchase you will receive all these documents back.