I think one of the most interesting stories one can tell, with regards to house buying, is -

"How did you tell your parents?"

Both Q and I had our fair share of discomfort when it came to sharing the news. Let's get real here. Most parents don't even take your relationship with your significant other seriously. At least mine didn't. Can't blame them though, if you know what I mean. Hahahahahaha.

For goodness sake, it was only in recent weeks that my parents stopped referring Q as my "friend". Especially my mum. She would go, "Is your friend coming tonight?" "You go out with who, your friend?" etc even though she knows fully well his name. I found it particularly amusing though. Q, not so much. Haha. To be perfectly honest, I didn't exactly discourage her. I would reply to her queries the same way i.e. "Yah my friend blah3" etc. Heh

Ok, back to the main story. When we registered our interest in applying to HDB in September 2013, there was one slight problem;

I wasn't 21 yet.

This meant that according to the rules stated here, I had to get both my parents to complete the written consent form shown below; 

Click to enlarge

The initial plan was to keep this journey to ourselves, for very least the initial stages. I'm not one to share my decision making matters with my parents. Of course I don't recommend doing that lah, it's always good to let your parents know. Am also well aware how hypocritical that sounds hahahaha. We actually thought we didn't need to. After all, our flat selection date was after my 21st. Unfortunately, a quick check with HDB verified that we indeed still needed the written consent. Meh. 

Q and I hatched a game plan. Back then, it was only November hence we still had ample time to inform my parents. We had family trip to Philippines in December in which Q was invited along to. It's his first trip with my family and he was to use that trip to bond and charm them. Devious, I know.  

The trip came and left. 

Phase 1: Success 

Next, deliver the news. 

We agreed that bringing my parents out for lunch would be the best time to ambush inform them. My family and Q have had meals together before but never just the four of us. Naturally, my mum got suspicious the moment I said we wanted to bring only the two of them out for lunch. She ain't stupid, she knew something was up.

On the day of unveiling, she refused to go out. Exasperated, we chose to get takeaway instead.

Food was bought and placed in the living room but my mum still refused to leave her room.

Only after I went to her and said Q had something to tell her did she leave her cave. Her expression was one that looked like she was prepared to slap me. It was only then that it occurred to me;

Mummy must think that I'm pregnant! 

HAHAHAHAHAHA. Sorry lah mummy, I'm just fat lah.

Q basically just blurted out that we were getting a flat and needed her to sign a form. You should have seen the wave of relief on her face hahahahahahaha. My mum then mumbled something like "okay but I'll have to let her father know first" (My dad hadn't return from work at that time but we knew the real issue would be my mum).

Operation: Success!

So basically that's the gist of my story. Hope it made you laugh!

♥ Sheena V

P.S. Guess what. When we arrived for our flat selection, the counter staff attending to us returned my written consent without a second glance. Why? Because apparently, you only need to be 21 at the point of flat selection. So future home buyers, take note yah.

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I hope my bitstrip comics have been somewhat entertaining. Didn't want the posts to turn out too dry. Haha.

Anyway, back to the topic at hand.

As previously mentioned, currently only Q is employed. Therefore it was crucial for us to do the necessary research and calculations in order to pick a flat we could afford. You could of course pick any flat your heart desires and hope for the best. YOLO right? However for those who are a little more anal like us, this post is for you. ;)

Without further ado, let me share with you the calculations made.

Things to Note 

• Amount stated for the 'Lease Stamp Fee' and 'Conveyancing Fee' was what we were charged at the point our Agreement Order. It may vary in the future.

• You are to utilise your AHG and/or SHG for the downpayment and fees. You will only be required to pay by CPF and/or cash should the grant disbursed to you prove insufficient.

• ^CPF available stated is what we forecast both of us accumulate in 3 more years. We erred on the side of caution and came up with that figure.

• (E) assumes we will get 100% of what we require. This may not be the true. It could be less. For HDB Housing Loan, you may request for HDB to give you an updated assessment of your credit rating a few months before the flat possession date if your combined gross has increased (therefore qualifying you more a higher loan amount than before).

• The interest rate stated i.e. 2.6% is the current HDB concessionary interest rate. It may vary along the 25-year loan period.

• The HDB concessionary interest rate is compounded annually hence it's not as simple as ($714 x 1.026%) to get the "Monthly Loan Instalment". In actual fact, with all the compounding (assuming interest rate is held constant) I will end up paying $1.36 for every $1 borrowed. ($714 x 1.36 = $971) Scary huh.

• For the case above, I am assuming the interest rate remains constant at 2.6%, which may not be the case. What this means is that, if some time during the 25 year loan period the interest rates goes up, I will be paying more than $1.36 for every $1 borrowed.

• Calculating the "Monthly Loan Instalment" requires some mathematical mumbo jumbo that is too complicated for me to type out although I have tried my best to explain what goes into the details. You may want to seek help from finance adept friends for such calculations.

We would preferably pay our monthly loan instalment entirely by our CPF.

We know for a fact that approximately 20% of our monthly salary goes into our Ordinary Account.

Hence in order to avoid utilising our cash flow for monthly instalments, our combined income should at least be $4,870. In other words, we should each earn at least $2,435 in order to fully rely on our CPF.

$4,870 is a very realistic goal to us. Even if HDB's concessionary interest rate were to increase, we should be able to manage fine. As it is, Q is fulfilling his share of the bill comfortably, praise to God. And God willing, I shall find a job that pays me well enough when I graduate. 

You could use the same format used here and punch in the numbers relevant to you. Check out the more recent sale launches on HDB's website to get a better gauge on how much your future purchase price would be.

I hope this post has been quite informative and helpful. Should you have related questions, I'll try my best to answer it in the comments below. Otherwise I'll just refer to who I think should be able to. (:

With that I shall end this post. Hope you have a great day!

♥ Sheena V

Next in this series - Spouse for House: Timeline

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Because that's the Golden Question right?

In this post, I'm going to write about the some of the financial considerations I took which you might want to take note of.

Some background info about Q and I - 

He has been working full time in the public sector for 3 years while I am still an undergrad with approximately 2 years to go who has only taken up either ad hoc or part time jobs. Needless to say, Q's stable employment is the only reason we could consider the notion of buying a flat, albeit on a tighter budget.

All of us are aware how outrageously expensive housing is. We can grumble all we want but fact is, you need a roof over your head. You could of course cut costs by moving in with your parents that's not the path we chose. We wanted our own place to call home, for me to cook without my mum complaining about the mess I'm making. Though it also means my mum won't be around to help me clear said mess. Haha.

As mentioned, we were on a tighter budget so we made sure to take advantage of the following grants available;

1.     Additional CPF Housing Grant (AHG)

    

This grant is essentially to allow lower income families/couples to shave off a few thousands of their chosen flat’s selling price. 

Source

As you can see from the table above, the less the family nucleus earns, the more amount received.

Due to the fact that I am essentially unemployed and Q is the sole breadwinner of our nucleus, we were able to receive $30,000 worth of AHG.

2.     Special Housing Grant (SHG)

    

With effect from July 2013 sale launches, families/couples with combined gross income of up to $6,500 may receive SHG on top of AHG. This is provided they have selected a 2-,3- or 4-room flat located in a non-mature estate.  For a list of mature and non-mature estates, click here.

Source

Now this is where a family nucleus with average gross monthly of $6,500 or less might want to reconsider their choice of flat in order to qualify for SHG.


One thing to note when calculating the combined gross income of your nucleus, it starts from the year precceding your new flat application. Source. For example, your average monthly gross income for the past 12 months had been $2,400. You then decided to submit your application today. However, you are only called in for flat selection in January. If within this 3 months your average monthly gross income increases, it does not affect your AHG and SHG application where applicable.

Here's where the decision making came in.

We initially wanted to remain staying in Tampines or Pasir Ris because that's where our parents are. But we can't always have what we want right? Needless to say after comparing the selling price difference of flats in non-mature and mature estates, the idea went straight to the bin. Haha. To get an idea on how big a difference the purchase prices are, I invite you to take a look at the list here. After clicking you'll see that it was a no brainer for us. Haha. 

As for which size flat to take, that took a little more deliberating. We eventually scraped the idea of a 5-room flat because you'll find in the image below, only the size of the living room and kitchen ever so slightly increases. You still get the same size and number of bedrooms. Q and I aren't exactly social butterflies hence we won't have many guests to entertain anyway in our slightly smaller living room. On the plus side, taking the 4-room would mean we could get the SHG of $20,000. Whoopee!

In summary, we secured $50,000 worth of grant money to offset our flat cost. Just to demonstrate to you how much a big difference it made to us, I'll reveal the price of our 13th floor 4-room Punggol flat.

We had ideally wanted to stay in Tampines or Pasir Ris because that's where our respective parents reside in. However, after comparing the selling price differences of flats in non-mature and mature estates, we decided to stick to Punggol. Additionally, we eventually scraped the idea of getting a 5-room flat because in the image below, you’ll find that the size of the bedrooms doesn’t change, only the size of living room and the kitchen ever so slightly increases. It’s a difference that we were willing to overlook in order to save another $20,000.

Before grant: $349,400

After grant: $299,400

Quite a big difference once you've seen the numbers, huh?

I'm not trying to say you should die die opt for a 4-room flat in a non-mature estate. Weigh your options and see if there's anything you can compromise on to further decrease the cost of your flat, especially if you're not raking in the big bucks. We are painfully aware of how expensive public housing is here in Singapore. The more your flat costs, the greater your monthly loan instalment is. Keep in mind loan repayment can take up to a whopping 25 years! (Assuming you're taking a housing loan from HDB, not sure about banks)

"Aiyah, 25 years not that long what"

Here's a thought for future home buyers - 

Your parents bought their flats at half the price (or even less!) than it is now, yet are still not done with their monthly instalments. How old are they now? That's gonna be you in time to come.

Let that sink in.

I hope that helps paint a picture of the repayment length of your housing loan.

With that I shall end this post.

♥ Sheena V.

Next in this series - Flat Finances: How much can you actually afford?

Disclaimer: I have not stated down all the requirements that needs to be fulfilled in order to be eligible for AHG and SHG hence please view here for more information.

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Credits: Future Neighbour, Tan Jin Kern Daryl.

Stunning, isn't she? :)

Sometime mid 2013, me and Q started throwing around the idea of buying a flat. At that point, we had been together for about 3.5 years and figured it was time to start browsing or at least start familiarising ourselves with the application process. Keeping in mind that a typical BTO takes about 3.5 to 4 years, it would mean the earliest we could get any flat was 2017. This of course excludes sales of balance flats, those take as fast as 6 months (more about that in upcoming posts).

There are so many factors to consider i.e. costs, completion date, location, accessibility, eligibility etc

Knowing it can be a daunting experience for some with the overload of information and considerations to take note of, I'd like to share my tips and tricks with you.

So look out for upcoming posts pertaining to this particular series via the "Waterway View" icon on the top right.

And yes, I'm going to be a proud resident of Punggol Waterway View. :D

With this short introduction done, I'll see you in my next post!

♥ Sheena V.

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