Single and looking for property-Check out this handy guide

Single man

Buying your first home is an exciting yet complex process, especially for the uninitiated. We break it down for you in this easy-to-understand guide.

Step 1: Affordability check

While purchasing a home on your own can be financially tough, it’s not impossible. It requires discipline and strict budgeting, which means knowing how much you earn and listing down where the money is being spent.

As a guide, your mortgage payments should not exceed 30 percent of your monthly salary. Another advice is to save enough money for the property’s downpayment as a higher initial cash outlay will significantly reduce your monthly loan instalments. Living on a single income also means you should also set aside enough money in case of medical emergencies or if you get retrenched.

Use the PropertyGuru Affordability Calculator to check the maximum property affordability based on the current government regulations and property cooling measures.

Step 2: HDB or condo – What can you buy?

If you are just starting out on the property ladder and are concerned about the initial cash outlay, then buying an HDB flat is the way forward. This is because you enjoy various government subsidies that every single Singaporean should take advantage of, such as the Single Singapore Citizen Scheme and the Joint Singles Scheme.

However, only singles who are aged 35 and above are eligible to buy either a 2-room BTO flat or resale HDB flat in the open market. Despite the increasing number of singles in Singapore, the authorities have yet to lower the age requirement.

While there is no age restriction when buying a condominium, the cash outlay is significantly higher with no special grants.

Check if you are eligible to buy a 2-room BTO flat

Step 3: Find the right location

Do you want to live close to transport nodes for an easy commute to work or do you prefer a quiet suburb with more parks and recreational amenities? Depending on your lifestyle needs, check the area’s master plan, which should provide more details on future MRT Lines, employment hubs and economic drivers, such as the Jurong Lake District and Punggol Digital District.

One major concern for single women who intend to live on their own is security. Walk around the neighbourhood in the evening to check if the common areas are well-lit. It’s also advisable to look for a home that is within proximity to your family or close friends to avoid falling into loneliness and depression.

Get more insights on the right locations for your new home at AreaInsider

Step 4: Consider hiring an agent to make your life easier

A good agent can help you scout for the right property according to your budget, desired location and financial calculations.

This is applicable if you are buying a resale HDB flat or a private property. You will need to pay an agent fee which is typically one percent of your property’s purchase price.

Single and looking to buy a home? Speak to one of PropertyGuru's preferred property agents and get advice

Step 5: HDB Loan vs Bank Loan: Which one is right for you?

The next step is to secure financing. For those buying a BTO flat, getting an HDB loan is the most likely route as most buyers will qualify.

The great thing about an HDB loan is it offers you a concessionary interest rate of 2.6 percent per annum with up to 90 percent financing, meaning less cash upfront. The downside is its interest rate is higher compared to a bank, which offers a lower interest rate ranging from 1.95 percent to 2.15 percent.

However, you can only get up to 75 percent financing while the remainder must be paid in cash and/or CPF. In addition, bank loans are subjected to floating rates meaning their interest rate can go higher or lower.

Meanwhile, HDB is more compassionate should you be late on your payments and will offer some flexibility. On the other hand, banks are very strict should you default on your repayments and will not hesitate to repossess your home. Thus, you need to set aside at least 12 months of savings, just in case. 

Be sure to weigh the pros and cons properly before deciding.

Consider these four factors before you decide which home loan to choose

 Step 6: Conduct due diligence when choosing your unit

Got an email from HDB? Congratulations! You’re one step closer to your dream home!

Upon a successful balloting, HDB will then ask you to come down to HDB Hub to sign the necessary documents.

If you are buying a condominium, your agent will help you zero in on the suitable project. If you are buying an uncompleted unit, do study the brochure carefully. If possible, try to visit the site so you have a general feel of the area.

If you are buying a home from the resale HDB or private property market, be sure to view the unit beforehand to check for defects. This is important as you cannot blame the seller once you have signed the paper.

As an additional safety measure, you should speak to your prospective neighbours to check on the property prior to your purchase. They can provide you with useful insights that your agent may not reveal to you. Imagine the horror if you ended up buying a property that was the scene of a crime!

Lastly, opt for units that are in the North-South orientation with a rectangular shape as they reduce heat gain leading to lower utility bills. Their more efficient layout also means every space can be utilised.

Avoid odd corners with acute angles as they are bad in terms of Feng Shui and design. Such corners collect energy which cannot be dispersed. If this is unavoidable, consider installing a full height cabinet or place a plant.

Step 7: Make an offer and seal the deal

Now that you have found your dream property in the HDB or private property market, it is time to seal the deal!

For HDB resale flats, you will need to log into the HDB Resale Portal with your SingPass. You may refer to the resale procedure on the HDB website.

For condominiums, you will need to put down an option fee of one percent of the purchase price, secure financing and pay the remaining option fee of four percent within a month. After this, you will need to place a downpayment of 15 percent in cash and/or CPF.

As of July 2018, the loan-to-value ratio has been reduced from 80 percent to 75 percent. This means you will need to top up the remaining five percent in cash and/or CPF while the rest will be loaned by the bank.

Finally, you need to pay a Buyer's Stamp Duty which you can read more about on the IRAS website.

Happy house hunting!

 

Read Next