Support Site for The Unemployed & Underemployed
Wednesday September 26th 2018

Comment on HDB’s demand of $84,000 cash outlay before collection of BTO keys


Both sides got fault.

HDB obviously can monitor and keep track of applicant’s loan eligibility and quantum in order to (1) prevent people from applying for too expensive flats in the first place, and (2) ensure that the family’s income hasn’t dropped significantly during the 3-4 years of construction before key collection.

However this will require more resources: staff, time, effort, reprogramming of IT systems to flag alerts and reminders, system for staff to check with applicants and CPF for ongoing income status etc. All these cost extra $$$$$ and obviously is low priority for HDB since applicants bear the end risks.

As for applicants, they are told that there will be a 2nd HLE or income assessment closer to key collection — in order to make sure they can still pay for the loan, or to “right size” the loan amount. HLE is only valid for 6 months. This is a problem for applicants who lose their jobs or suffer big pay cuts during the 3-4 year waiting time.

If you’ve suffered a loss of income during the waiting time and not able to get another job with same pay, you should (1) get new HLE and (2) may need to inform HDB to downgrade smaller flat using the new HLE as guide.

I know some people are very “house proud” and are willing to max out everything to get the biggest and best place possible. But people need to realise that homes are VERY overpriced in Singapore, even for BTO — this is based on international guidelines using price-to-annual salary ratio. Anything above 4 is unaffordable.

And in Singapore, the very important rule of thumb is that you must be able to fully pay up your home by the time you are 40-45 years old.


Editor’s note: This article is retrieved from a comment posted on our site.

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