| Foreign Currency Financing |
|
| Application Detail Relating To Purchase And Refinance |
|
| Application Details Relating Solely To Purchase |
|
| Application Details Relating Solely To Refinance |
|
| 1: | I wish to buy a residential property. What should I do first? |
| | | Ans: You should check on your eligibility to purchase. If you are a foreigner, you may buy a unit from a development approved by the competent authority under the Planning Act as a Condominium or any flat (excluding flats) in a building consisting of at least 6 levels. |
|
| 2: | I am not sure about the area of the property - should I just go ahead with the purchase? |
| | | Ans: If the floor/land area is a material consideration, you should check with a surveyor to determine the actual floor/land area of the property before you commit to buying the property. However, most sales of immoveables property are "as is where is" as to dimensions and physical condition. Unless the contract contains an express warranty as to the area, you may be obliged to complete the purchase even if you discover that the area is less then you expected. |
|
| 3: | What sort of searches will my lawyer conduct? |
| | | Ans: In relation to the purchase of property, your lawyer will usually conduct a bankruptcy search on the vendor(s) and a title search on the subject property. A lawyer acting for a Bank in the mortgage of the property will generally be required to conduct bankruptcy and cause book searches on the mortgagor and the borrower (if different from the mortgagor) in addition to the abovementioned title search. |
|
| 4: | What type of financing will be available to me? |
| | | Ans: In 1996 the Monetary Authority of Singapore imposed some restrictions on financing the purchase of residential property.
Generally :
i) The quantum of financing (whether in Singapore dollars or foreign currency) for the purchase of residential properties in Singapore cannot exceed 80% of the nett purchase price or valuation of the property, whichever is lower.
With effect from 12 Oct 2001, the MAS's Directive on Housing Loan issued on 15 May 1996 with regards to Singapore permanent residents having one Singapore dollar loan to purchase a residential property in Singapore for Owner Occupation and Non-Singapore citizens (excluding Singapore permanent residents) not being able to obtain a Singapore Dollar Loan has been lifted. Henceforth, the following will be applicable:
ii) Singapore permanent residents may be granted Singapore dollar loan for the purchase of residential property in Singapore.
iii) Non-Singapore citizens who are not permanent residents are eligible to take Singapore dollar loans for the purchase of residential properties in Singapore
|
|
| 5: | When should I appoint a lawyer? |
| | | Ans: If you are purchasing a property under construction directly from a licensed housing developer, you should appoint a lawyer immediately after you have paid the booking fee to the licensed housing developer.
For other cases it is advisable to consult a lawyer before you pay any money at all or sign any contract for the purchase.
|
|
| Formation of Contract - Answers |
|
| 1: | What sort of documents would I and the Vendor (seller) have to sign in order to effect a sale and purchase of the property? |
| | | Ans: For purchase of completed properties, the parties can either sign a Sale and Purchase Agreement or an Option to Purchase. A deposit of 10% of the purchase price is usually paid upon the signing of the sale and purchase, while you pay 1% of the purchase price in exchange for an Option granted to you and upon the exercise of the Option, you pay 9% of the purchase price.
For uncompleted properties, you will pay a booking fee of 5% of purchase price for an Option to Purchase duly signed by the developers. You will then receive a Sale and Purchase Agreement which has to be returned duly signed within 3 weeks from the date of receipt of the Agreement from the Developers.
|
|
| 2: | Is a verbal offer from the Vendor (seller) binding if there is nothing in writing? |
| | | Ans: Under the Civil Law Act, no action can be brought upon any contract for the sale or of property unless the contract or promise is evidenced in writing and signed by the person to be charged. |
|
| 3: | Can the Option to Purchase period be valid for more than 2 weeks? |
| | | Ans: Yes, if both the vendor and purchaser agree to the extension. |
|
| 4: | Can a Vendor (seller) ask for an option fee which is more than 1% of the purchase price? |
| | | Ans: The amount of Option Fee is a matter to be agreed upon among the parties. However the current market practice is for the sellers to ask for 1% of the purchase price as option fee. |
|
| 5: | I have paid the option fee and received an Option to Purchase. Can I choose not to proceed with the purchase? |
| | | Ans: If you do not exercise the Option within the stipulated time, the Option will lapse and the seller can sell the property to someone else. However in most cases, the Option fee (or part of it, depending on the terms of the Option) will be forfeited by the seller.
In the case of purchase from licensed Housing Developers, 25% of the booking fee paid by you will be forfeited by the developers
|
|
| 1: | I have exercised the Option to Purchase/signed the Sale & Purchase Agreement for the property. What if I choose not to proceed with the sale? |
| | | Ans: Once you exercise the Option, you would be contractually bound to purchase the property. If you fail to complete the sale, you would have breached your contractual obligations under the contract and be liable to compensate the vendor for damages. If the vendor sells the property at the open market for a purchase price that is lower than what he would have sold to you, you will have to make good the loss he suffered. You will also have to compensate him for all other expenses reasonably incurred as a consequence of your breach. |
|
| 2: | When will the sale and purchase have to be completed? |
| | | Ans: The completion period is usually fixed between 8-12 weeks following the date on which the Option is exercised or the date of the Sale and Purchase Agreement ( as the case may be). If you require a bank loan or intend to use CPF savings for the purchase, it is not advisable to agree to a completion period of less than 8 weeks |
|
| 3: | I expect to be out of the country. Can someone else sign the necessary documents and attend to the completion of the purchase on my behalf? |
| | | Ans: You should appoint an attorney to act for you in your absence. Your lawyer will prepare a Power of Attorney for your execution. |
|
| 4: | I am buying a property together with my spouse/parent/friend. What are the different ways in which we can co-own the property? |
| | | Ans: i) Joint Tenants
If you and your co-owner hold the property as joint tenants, you must deal with the property jointly. Upon the death of one owner, the deceased owner's interest in the property will automatically vest in the surviving owner, notwithstanding anything contrary stated in the deceased's owner's will.
ii) Tenants-in-Common
If you and your co-owner hold the property as tenants-in-common each of you have a distinct share in the property and you can deal with your share independently of your co-owner. Upon the death of one owner, the deceased owner's share in the property will be distributed in accordance with his will or, if he died without leaving a will, his interest will be distributed in accordance with the prevailing law.
Please note that the above does not apply if you (or both of you, as the case may be) are Muslim. In such a case, the distribution will take place in accordance with the Administration of Muslim Law Act (Cap 3)("AMLA"). The Syariah Court is empowered under AMLA to issue a Certificate of Inheritance setting out who the beneficiaries are and the respective shares they are entitled to under the estate of the deceased Muslim. |
|
| Cost & Expenses - Answers |
|
| 1: | When do I have to pay my lawyer? How are legal fees calculated? |
| | | Ans: 1) Legal fees for conveyancing transactions are calculated according to the scale prescribed by the First Schedule of the Legal Profession (Solicitors' Remuneration) Order. Statutory rebates are permitted where the different parties appoint the same solicitor to act for them.
2) Legal fees are payable on or before completion.
i) If you are buying the property directly from the developers and the Temporary Occupation Permit (TOP) to your property has not been issued, the stamp fees on your purchase of the property must be paid within 14 days from the issuance of the TOP or within 14 days from the date of your contract to sell the property, whichever is earlier.
ii) If you are buying a property after the TOP has been issued, then the stamp fees on your purchase must be paid within 14 days from the date of the Transfer (that is, legal completion).
iii) If you take a loan for the purchase, the Bank may require you to deposit the stamp fees with the Bank or with your solicitors as stakeholders prior to disbursement. |
|
| 2: | When do I have to pay my stamp duty? |
| | | Ans: Stamp duty on the Mortgage is payable within 14 days from the date of the Mortgage. |
|
| 1: | When should I apply for my loan/withdrawal of CPF funds? |
| | | Ans: You should apply for a loan as soon as possible as it usually takes about 8 weeks to complete a Mortgage transaction and request for drawdown. |
|
| 2: | I plan to buy a property with my fiancé. We plan to register our marriage later on. Can we make use of our CPF savings towards the purchase of the property? What happens if we subsequently call off our marriage? |
| | | Ans: You can apply for the use of your CPF savings as fiancé and fiancée. However CPF Board will require you to provide satisfactory documentary evidence of the intended date of marriage for instance, receipt from the Registry of Marriages, letter from your pastor/church. If your application is approved, the CPF Board will require you and your fiancé to sign a Letter of Undertaking to produce a certified true copy of your Marriage Certificate to the CPF Board within a specified period (usually 6 months). If you subsequently call off the marriage, you will have to refund all CPF funds used. |
|
| 3: | If I do not own the property that is purchased but I am an owner of the property to be sold, can I use my CPF to help pay for the new property to be purchased? |
| | | Ans: No. Only if you own the property and you are related to the owner can you use your CPF towards the purchase of the property. |
|
| 4: | Can I use my CPF to service the monthly instalment if I do not want to use my CPF ordinary account balance for the purchase of my property? |
| |
| 1: | I am not sure of the floor/land area of the property. Should I just go ahead with the Purchase? |
| | | Ans: If the floor/land area is a material consideration, you should check with a surveyor to determine the actual floor/land area of the property before you commit to buying the property. |
|
| 2: | What happens if the size of the property I purchased turns out to be smaller/bigger than what was indicated to me at the point of purchase? |
| | | Ans: From a valuation perspective, the value will obviously be different which may or may not be proportionate to the discrepancy. If the discrepency is marginally different then the similar per square foot value may be used to recalculate the value, for example 1,000 sf instead of 1,010 sf. However, when the discrepency is large say, 1,000 sf instead of 2,000 sf, the same psf value will not be applicable. |
|
| 3: | What does it mean when we say that a property is "freehold" and "leasehold"? |
| | | Ans: A freehold title means you own the property for an indefinite period. on the other hand, a leasehold title specifies the number of years which you can hold the property, for example, 99 years or 999 years with effect from a certain date. Hence, if you are buying a leasehold property, you should also check the remaining unexpired term. In general, the shorter the unexpired term, the lower the value of the property. The Central Provident Fund (CPF) rulings allow financing only for properties with an unexpired lease terms of at least 60 years. Banks and financial institutions generally follow the same critierion in granting mortgage loans. |
|
| 4: | What happens when a leasehold property reaches the end of the lease? |
| | | Ans: From legal point of view, the leasehold property would revert back to the State or reversionary interest owner upon the expiry of the lease term of 99 yrs, 999 yrs, etc. However, the government is currently looking into ways to allow old leasehold apartment/condominium developments to upgrade the existing unexpired lease term which they hope will provide an incentive for old apartment/condominium to be upgraded from their existing old and poorly maintained condition. Such details have not been finalised by the relevant authorities. |
|
| 5: | What is the difference between an apartment and condominium? |
| | | Ans: Condominiums must have a minimum site area of 0.4ha while for apartments there is no minimum sized site areas for Apartment developments. For condominiums, there is no restriction on foreign ownership unlike apartments which can only be sold to foreigners (unless with approval from LDU) if the development is 6 storeys or more. |
|
| Foreign Currency Financing - Answers |
|
| 1: | Does OCBC offer foreign currency loans? |
| | | Ans: Yes. We will advise you on the type of currency loan and the quantum of loan that is available to meet your needs. For assistance, please contact 1800-4386088. |
|
| Application Detail Relating To Purchase And Refinance - Answers |
|
| 1: | What do you mean by the number of dependents? |
| | | Ans: i) For Main Applicant, number of dependents includes all children but exclude spouse if spouse is working
ii) For Joint applicant
a) number of dependents is zero if joint applicant is main applicant's spouse or if joint applicant is single.
b) number of dependents includes children and spouse provided spouse is not working, if joint applicant is not main applicant's spouse but joint applicant is married, then the number of dependants includes children and spouse (if spouse is not working).
|
|
| 2: | Is the Basic Monthly income net or gross? |
| | | Ans: Basic monthly income is your monthly income excluding fixed and variable income/allowance. |
|
| 3: | What is considered Fixed Monthly Income? |
| | | Ans: Fixed Monthly income is basically income not part of basic pay but a fixed amount you receive every month. An example of fixed monthly income is fixed transport allowance. |
|
| 4: | What is Variable Monthly Income? |
| | | Ans: This includes overtime pay, variable transport allowance, shift allowance, meal allowance, commission over and above fixed monthly income and so on. The total of the average of 3 months variable income is to be input into this field. |
|
| | | Ans: Other income may include declared dividends earned or interest earned in a year. |
|
| 6: | Do I input my income earned for this current year or the annual income reported in last years Tax Assessment ? |
| | | Ans: You should use the income declared in your latest available Tax Assessment. |
|
| 7: | What is the difference between my Loan Outstanding and Loan not Drawndown? |
| | | Ans: i) Loan Outstanding is the loan that you still owe to your existing financier.
ii) "Loan not drawndown" is the loan amount that you took up with your existing financier that has not been drawn down. This is usually the case if you purchased a property under construction or a situation where the legal title for your existing property has not been issued.
|
|
| Application Details Relating Solely To Purchase - Answers |
|
| 1: | What is the difference between "CPF Ordinary Account Balance" and "Amount to be used for Purchase"? |
| | | Ans: The CPF Ordinary Account Balance is what you have available in your CPF account that you are allowed to use towards payment of your new home. The Amount to be used for the Purchase can be any amount up to the Ordinary Account Balance less off the amount to be used for Downpayment and Stamp & Legal Fees.
E.g. CPF Ordinary Account Balance = $200,000
Amount to CPF to be used for Downpayment = $100,000
Amount of CPF to be used for Stamp & Legal Fees = $25,000
Amount of CPF to be used for Purchase = $75,000
|
|
| 2: | What is the maximum amount of CPF I can use for downpayment? |
| | | Ans: Effective 1 Sept 2002, CPF can be used to pay the downpayment for the purchase of your private property. The maximum amount of CPF that you can use is up to 10% the Nett Purchase Price or Valuation Price, whichever is lower. |
|
| 3: | Do you have an existing property to sell/sold? |
| | | Ans: This refers to your current property that you have sold or will be selling and the proceeds of the sale, whether CPF or cash will be used for purchasing your new property. |
|
| 4: | What is the difference between the categories in "Status of Property"? |
| | | Ans: i) Property Sold and Property sold before loan disbursement
The Bank will be a able to grant a loan for the first 20% downpayment in the form of a Bridging Loan (BL). The BL is to be repaid from the cash proceeds of your sale. On top of that the Bank will also be able to extend to you a Short Term Loan, pending receipt of your sale proceeds of property sold. The Short Term loan can either be repaid by your cash or CPF proceeds or both.
ii) Property to be sold within 3 months or 3 months from TOP
The Bank will not be able to grant you a Bridging Loan for the first 20% downpayment. This amount has to be paid by you in cash. However, the Bank will be able to extend to you a Short Term loan pending receipt of your sale proceeds of your property to be sold. The Short Term loan can either be repaid by your cash or CPF proceeds or both. |
|
| 5: | Why is there an "Other" for CPF Proceeds from Sale of Property? |
| | | Ans: This is applicable for the case where the property to be sold is owned by a third party other than the borrower/s. In this case the CPF from the sale will have to be refunded to that party's CPF ordinary account and cannot be used for the purchase of this new property which is not owned by him/her. |
|
| 6: | What is the Cash Proceeds from Sale of Property ? |
| | | Ans: This is your cash proceeds calculated by the bank by taking a percentage of your Sale/Estimated Market Price less off your Loan Outstanding, Loan not Drawndown and CPF Proceeds going back to CPF. |
|
| 7: | What is Nett Purchase Price? |
| | | Ans: Nett Purchase Price is the Original Purchase Price less off the cash value of rebates, unit trusts, discounts or vouchers given by the property developer/seller to the property buyer.
Eg
Original Purchase Price = $1,000,000.
Unit Trusts Cash Value = $200,000
Nett Purchase Price = $1,000,000 - $200,000
= $800,000
|
|
| Application Details Relating Solely To Refinance - Answers |
|
| 1: | What is Total Overdraft Limit? |
| | | Ans: Total Overdraft Limit is the existing Overdraft limit that was granted to you by your existing Financier. |
|
| 2: | How will I know the estimated market value of my property? |
| | | Ans: You may be aware of the estimated value of your property through an informal indication given to you or the sale of a similar unit in your development. If you have no idea of the value of your property, leave this field blank. |
|
| 3: | What does "Term Loan" refer to? |
| | | Ans: Unlike a housing Loan, this credit facility secured by your property was not granted to you for the purchase of your property. |
|
| 4: | What is the difference between "CPF used for the property" and "CPF you intend to use to reduce Housing Loan Outstanding?" |
| | | Ans: "CPF used for the property" is the total amount you have used towards the property.
This includes :
(a) CPF from your ordinary account used towards the purchase,
(b) CPF used for monthly instalments,
(c) CPF used to pay the stamp fee (if applicable) and
(d) accumulated interest
This total figure can is reflected in your CPF Residential Properties Scheme (RPS) Withdrawal Statement which you can obtain from CPF Board.
"CPF you intend to use to reduce Housing Loan Outstanding" is the CPF still available in your ordinary account that your wish to use to reduce your loan outstanding with your existing financier. |
|
| 5: | What is the CPF earmarked for stamp and legal fee? |
| | | Ans: This is when you have opted to use your CPF funds for the payment of Stamp and Legal fee and this sum has not been paid yet and has merely been set aside for future payment. |
|
|
|
