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So much talk about affordability in properties recently. Need to seek opinions from you guys. Ideas have been floating in my mind whether should I upgrade to an EC for quite sometime. Presently staying in EA bought 4 years ago for <$400k. Outstanding loan only left about 165k. Flat should be worth around $600-650k currently.

Say household income around $7k. Can I afford a $800k EC? Assuming also I have enough for 20% down payment. Should I only loan the remaining 80% of the apartment price and leave the CPF monies in CPF after selling away the flat or try to pay as much as possible and take a lesser loan? 80% loan will need to service $ 2300 estimate monthly base on today rate but enough CPF monies to service the loan on its own for at least 5 years.

What is your take on the above.
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1 Answer

Geryl Lim
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Hi Ken,

The decision to upgrade will not come easy, especially so for the majority of the working class always wary about the next economic downturn so on.

Based on your presentation of situation, I believe you have done a fair bit of homework to have come out with the various figures and I am pretty sure you are likely to be able to afford for the downpayment based on your figures, nevertheless, I wish to highlight that for application of loans from banks, they will not only look at your monthly household income, but also at your expenses as well as credit rating to be determined, therefore it will be good if you can seek the advise of a banker instead on loan portion.

With the low interest rates at present, I would think it is likely to be more practical to improve the cashflow on your end therefore having more cash with you is ideal, especially so when you can probably do a refinancing should there be any changes to interests rates. This is purely my opinion.

My only concern for you is the period between your sale of your existing EA to your TOP of EC where you need to have roof overhead for your family. 80% loan eligibility is for buyers without any existing home loan, otherwise the maximum eligibility is 60%.

Regards,
Geryl LIM
Real Estate Consultant
CEA Reg R014783H
Mobile: +65-81577565 
Email: lim.geryl@yahoo.com.sg Read More
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