FINANCING YOUR APARTMENT IN SINGAPORE

Apartemensingapore.netAs a foreigner in Singapore you can buy property here : Condominium or apartment of any size, either it is 99 leasehold or 999 leasehold or FREEHOLD without any difficulty, But you are required by law as a foreigner to pay Additional Buyer Stamp Duty (ABSD) of 15% (for Singaporeans himself, they need to pay 7% to 10% depending on the number of properties they already own in Singapore).   In addition to that all people (Singaporeans, PR, and Foreigners) have to pay stamp duty of 3% as required by law regardless of the number of properties they have already owned before.

Most foreigners (especially from Indonesia) buying properties in Singapore without any doubt already know that Singapore property is a good investment in term of future capital appreciation and high rental yields (to pay for the installments). For example : Singapore currency is a very solid and strong currency. Against the Indonesian Rupiah Singapore currency is already appreciated by around 30% from just around 3 months ago. This is more than enough to cover the Buyer Stamp Duty and ABSD in Singapore. As you may know Singapore has very solid economic fundamental supported by clean government, good infrastructures, good banking systems and good educational and medical hubs, which attract always foreign investors to come and set up business here. Whereby many new jobs will be created and many new homes will be needed and these cause the property prices are always increasing in the small country like Singapore with very limited land supply.   So do not worry buying property in Singapore.

Some more Singapore Government made a plan officially to increase the population here from today around 5 million to 7 million by 2030.  So this will guarantee that Singapore property will always a good investment in the long run, in the land scared of Singapore.

People in Singapore can take bank loan to finance their property purchase up to 80% of their purchase price by mortgaging their home. And normally for foreigner the bank will give home loan up to 70% to 80% depending on the bank’s discretion. The bank’s interest rate here is quite low at the moment is around 1.3%, therefore many investors make use of this low interest rate to take loan to finance their home. Please take note that the bank interests rate can change anytime depending on the bank’s Sibor rate etc.

For example: Assuming somebody aged 35 years old buying a NEW LAUNCH property in Singapore with the purchase price of S$ 1 million and pay 20% down payment and the remaining 80% he takes bank loan, with the maximum loan tenure of 30 years, with the interest rate of 1.3% in a progressive payment system (it means he pays only for what the developer has already built and done it, in STAGES).

Herewith I attach the Progressive loan payment for you to study it.  All prices is in Singapore Dollars

After you make a booking of an Apartment unit at a new launch by paying 5% of the purchase price amounting to $50 000 then within 8 weeks later you need to pay cash another 15% exercise fees of the purchase price amounting S$ 150 000 whereas for the remaining purchase price you take a bank loan of 80%.  As A foreigner you are just required to pay Stamp Duty of 3% amounting to S$24.600 (by law for the first $180 000 you must pay 1% and for the next $180 000 of the purchase price you need to pay 2% and for the remaining purchase price you need to pay 3%) and the Additional Buyer Stamp Duty (ABSD) of 15% of the purchase price amounting to $150 000

So at the first stage: 10% , when the developer already built the foundation of the building you need to pay 10%, the bank will start disburse the payment of 10 % to the developer and you start to pay the interest of only $$ 335.60 monthly to the bank. So it is very cheap and many people take bank loan instead of paying cash to make use of this affordable and bank’s low interest rate. Normally for laying and finishing the foundation the developer will take around 9 months  to one year to finish (depending of the building speed of the developer also, but to complete the whole project normally it will take around 3 years  until TOP / handing over the key) .

Stage 2 : 10%, when the developer already built the reinforced framework of the building you need to pay another 10% (it means the bank will disburse further 10 %) and you need to pay bank monthly installment of $671,21.  This will take around 6 to 9 months

Stage 3 : 5%, when the developer already built the brick walls so the bank will disburse further 5% to the developer and you pay to the bank monthly instalment of $ 839.01. This will take around 6 months

Stage 4 : 5%, when the developer already built the roofs so the bank will disburse further 5% to the developer and you pay to the bank monthly instalment of $ 1 006.81

Stage 5 : 5%, when the developer already built the windows & doors etc. so the bank will disburse further 5% to the developer you pay to the bank monthly instalment of $ 1174.62

Stage 6 : 5%, when the developer already built the car park etc. so the bank will disburse further 5% to the developer and you pay to the bank monthly instalment of $ 1342.42

Stage 7 : at the time of handing over the key to you (TOP) so the bank will disburse further 25% to the developer and you pay to the bank monthly instalment of $ 2181.43. This will take normally around 3 years from the start of building the foundation.

Stage 8 : at the time of completion all the legal documents etc. your bank needs to pay the remaining amount of 15 % and your installments to the bank will be $2684.84. This will take normally around 3 years after TOP /handing over the key.

+++ This monthly installment of only $ 2684.84 can be covered by the monthly rental yields of the property, if you rent it out, and sometimes you still get the monthly surpluses, as regular passive income. Is it too good to be true right ?? So after 30 years paying out the bank loan the property become yours. Investing in Singapore property is really the right thing to do.

I hope my illustration for the progressive payment in buying a new launch condo will help you in deciding buying a property in Singapore. If you have any question, do not hesitate to contact me by clicking here and I will certainly help you.

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