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Mike Lim
Replied
Good morning,

If you are looking at using your parent’s CPF fund to finance the purchase, it would be good to approach the CPF Board first to secure a written approval. By normal practice, after the sales of unit, the CPF will be returned back to individual account. For your parent’s case, the fund will then be locked in their retirement account.
As for using mortgage loan, your parents will definitely have issue securing one due to their age. You can utilize your name to secure the mortgage loan but this might impact your chance of getting your second HDB loan when you intend to purchase your own unit in the future.

Do feel free to contact me for further discussion.

Regards
Mike Lim
 96929209 
m52i@yahoo.com
ERA

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Ling CK
Replied
Hi,

I'll address your queries first:
(1) All SCs entitled to 2 concessionary loan
(2) Yes, your parents age is definitely an issue, but this is not the only consideration. Their income also critical.
(3) They are allowed to use their CPF to pay.
(4) HDB will definitely advise you to be one of the owner since you are servicing the mortgage.

To go a little deeper than your queries:
(1) The main reason most people select HDB loan than bank loan is because HDB loan allow you to loan up to 90% of the flat price.
The remaining 10% also can use CPF to pay, thus minimum cash is needed other than the deposit for OTP, max up to $5k.
The rest of the fees such as legal fee ($200~$300) also can engage HDB appointed lawyer which is the cheapest in town. The other big item would be stamp duty which can be paid by CPF.

When you use bank loan although in long term it might save some interest, but needed to keep constant monitor in order to enjoy a good rate, seems cumbersome to some people.
On top of that, you will need pay 5% in cash for the flat, 15% from CPF and/or cash. You can only loan up to 80%.
You also need to engage bank panel lawyer ($1,500~$2,000) to settle the legal document. All these are the considering factor that deter people from getting loan from private bank.

However, because your intent loan is less than $100k, unlikely there are any private bank willing to do any housing loan.

(2) If using only your parents name in the loan, then maximum loan tenure is up to 65 years old. Meaning they will need to service higher mortgage per month.
By adding your name in will be able to stretch longer loan tenure. The forumla to calculate is called "Income Weighted Averaqge Age"; this shall determine what is the maximum loan tenure.

(3) This is a common question. Since their already above 55 yrs old. Their Retirement Account would already fixed regardless of the amount in RA. So after selling off 3-rm, all CPF return will goes back to their OA, and they are allowed to use this to pay the 4-rm flat.
The CPF return will not use to top up their RA.

(4) If this is a resale flat without grant, you are still consider as 1st timer when you apply for BTO in future.

Hope the above answer to your main concerns, but if there are more queries, please feel free to contact me at 90110636  , or email: ling.ck7@gmail.com if more information is needed.
I'll be glad to assist.

Best regards
Ling CK
 90110636 
ling.ck7@gmail.com

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