Purchasing an HDB resale flat in Singapore is a significant milestone that requires careful planning and a thorough understanding of the HDB buying process. This detailed guide will take you through every step of the process, ensuring you are well-prepared to navigate the HDB resale market and secure your dream home.
Understanding the HDB Resale Flat Scheme
What is an HDB Resale Flat?
An HDB resale flat is a public housing unit in Singapore sold by a current owner, as opposed to new flats sold directly by the Housing & Development Board (HDB). Resale flats offer immediate availability and are typically located in established neighbourhoods with developed amenities.
Why Choose an HDB Resale Flat?
Opting for a resale flat from HDB comes with several benefits:
Immediate occupancy compared to the waiting period for Build-To-Order (BTO) flats.
Choose from a broader range of locations, allowing you to choose your preferred area.
Greater variety in flat sizes and layouts.
Step 1: Check Your Eligibility
Before you can begin the HDB buying process, it's crucial to determine your eligibility. Key criteria include:
Singapore citizen status for at least one applicant.
Minimum age of 21 years.
Application under a qualifying scheme (e.g., Public Scheme, Fiancé/Fiancée Scheme).
Adherence to the monthly household income ceiling varies based on the type of flat and scheme.
Eligibility Schemes
Public Scheme: This scheme is for families and singles buying with their parents.
Fiancé/Fiancée Scheme: For engaged couples planning to marry.
Single Singapore Citizen Scheme: For single citizens aged 35 and above.
Non-Citizen Spouse Scheme: For citizens with a non-citizen spouse.
Step 2: Apply for a Housing Loan Eligibility (HFE) Letter
A valid HFE letter is necessary to proceed with your flat purchase. This letter confirms your eligibility for an HDB housing or bank loan and outlines the maximum amount you can borrow. To obtain this letter:
Submit your application through the HDB resale portal.
Provide necessary supporting documents, including income statements and identification.
Step 3: Start Your Home Search
You can find a suitable flat within your budget and with a valid letter. At Mogul, we make this process seamless by offering a comprehensive range of resale flat listings on our official website, tailored to meet your specific needs. Our platform is designed to help you find a flat that aligns perfectly with your lifestyle, taking into account:
Location and proximity to your workplace, schools, and essential amenities.
Size and layout of the flat to suit your requirements.
Condition of the flat and any potential renovation needs.
Trust Mogul to guide you through every step of your home search, ensuring that you find the perfect flat with ease and confidence.
Viewing Flats
Schedule viewings to assess the condition and suitability of potential flats.
Ask questions about the flat’s history, renovations, and remaining leases.
Step 4: Decide on a Financing Option
Choosing between an HDB housing loan and a bank loan is significant. Consider the following:
HDB Loan: Lower interest rates but stricter eligibility criteria.
Bank Loan: Higher interest rates but potentially more flexible terms.
Loan Comparison
Compare interest rates and repayment periods.
Consider your financial stability and long-term plans.
Obtain, in principle, approval from the bank to know your borrowing capacity.
Step 5: Make an Offer and Secure the Option to Purchase (OTP)
Once you find a flat that meets your needs, make an offer to the flat seller. If the offer is accepted:
Pay an option fee (up to $1,000) to secure the Option to Purchase (OTP).
The OTP grants you the exclusive right to purchase the flat within a specified period (typically 21 days).
Step 6: Discuss Temporary Extension of Stay with the Seller
Sometimes, the seller may need additional time to vacate the flat. If this is necessary:
Negotiate a Temporary Extension of Stay agreement.
Outline the duration and any compensation arrangements clearly in writing.
Step 7: Request for Flat Valuation
Submit a request for value to HDB to determine the official market value of the resale flat. The valuation affects your loan amount and CPF usage. Ensure the resale price agreed upon aligns closely with HDB’s valuation to avoid extra cash payments.
Step 8: Exercise the Option to Purchase
If the valuation and terms are satisfactory, proceed to exercise the option:
Sign the OTP and pay the option exercise fee (typically between $1 and $1,000, as agreed upon by both parties)
This legally binds you and the seller to the resale transaction.
Step 9: Complete the Resale Application
Submit your resale application through the HDB resale portal. Both buying and selling HDBs must complete their respective portions. Ensure all resale documents are accurately filled and submitted to avoid delays. Part of this process includes reviewing and accepting HDB's terms and conditions. Understanding these clauses is critical for a smooth resale transaction. Once accepted, HDB will process your application and verify all details.
Required Documents | Description |
Identification Documents | NRIC, marriage certificate if applicable. |
Income Statements and CPF Statements | Proof of income and CPF contributions. |
OTP and Valuation Report | Official OTP and HDB’s valuation report. |
Step 10: Make Payment for Resale Fees and Calculate Stamp Duty
Pay the necessary resale fees and calculate the stamp duty based on the property's purchase price or market value. Use your CPF or cash savings for these payments. The HDB flat portal provides tools to help calculate these costs accurately.
Financial Obligations
Resale fees: Administrative fees payable to HDB.
$40 to $80, depending on the size of the flat.
Stamp duty: Tax calculated as a percentage of the purchase price or market value.
Buyer’s Stamp Duty (BSD): Calculated based on the flat’s purchase price or market value, whichever is higher:
1% for the first $180,000
2% for the next $180,000
3% for the remaining amount up to $1 million
4% for any amount above $1 million
Additional Buyer’s Stamp Duty (ABSD) (if applicable): 20% of the purchase price for Singapore Citizens buying a second property.
Step 11: Receive Approval Notification
Once HDB processes and approves your application, you and the seller will receive an approval notification. This indicates that all legal checks are complete, and you can proceed to the final steps.
Step 12: Resale Completion Appointment
Completion Steps | Description |
Final Payment | Settle the remaining payment. |
Document Signing | Sign all necessary documents to complete the resale transaction. |
Key Handover | Receive the keys to your new HDB resale flat. |
Frequently Asked Questions (FAQs)
Do I need an HDB loan, or can I use a bank loan?
You can use either an HDB loan or a bank loan. Each comes with its own set of pros and cons. An HDB loan typically offers a lower down payment and the ability to use more CPF savings, but it has a slightly higher interest rate. On the other hand, a bank loan may offer a lower interest rate but require a higher down payment and have stricter eligibility criteria. Your choice will depend on your financial situation and long-term goals.
How much of my CPF can I use for the down payment?
You can use your CPF Ordinary Account savings for the down payment, subject to CPF withdrawal limits.
What are the fees involved in buying a resale flat?
There are several fees associated with the purchase, including the resale price (property's purchase price), option fee (part of the down payment), resale application fees, legal fees (conveyancing fees), and stamp duty (calculated based on the purchase price).
Do I need an HDB HFE letter before I can make an offer on a flat?
Yes, in most cases, sellers will require a valid HFE letter as proof of your eligibility and housing loan eligibility before accepting an offer.
Where can I find resale flat listings?
To find a resale flat that aligns with your needs and budgets, simply browse our extensive listings on the Mogul website. We offer a wide range of options, ensuring you discover a flat that is perfectly suited to your lifestyle. At Mogul, we take pride in providing a user-friendly and reliable service, allowing you to navigate the property market and secure the home you've been searching for.
What happens after I submit the resale application?
HDB will review your application and assess HDB's acceptance for the resale flat purchase.
Do I need to get home insurance?
While not mandatory, getting home insurance for your new HDB flat is highly recommended.
What is the maximum amount I can borrow for an HDB housing loan?
The maximum loan amount you can borrow depends on your monthly household income, age, and the remaining lease of the flat. Use the HDB flat portal to calculate the estimated loan amount.
How long does the HDB resale process take?
The entire HDB resale process typically takes 8 to 10 weeks, from submitting the resale application to the resale completion appointment.
Can I use my CPF savings for the down payment?
Yes, you can use the CPF savings from your CPF Ordinary Account for the down payment and other fees associated with the resale flat purchase.
What happens if the flat's valuation exceeds the agreed resale price?
If the valuation is higher than the agreed resale price, you must pay the difference in cash, as the loan amount and CPF usage are based on the lower two values.
Are there any restrictions on renting out my resale flat?
Yes, HDB has specific rules regarding the rental of flats. You must meet the Minimum Occupation Period (MOP) before renting out the entire flat. Check HDB's guidelines for detailed information.
How do I know if I qualify for CPF housing grants?
Eligibility for CPF housing grants depends on factors such as your citizenship, family nucleus, and monthly income. For a comprehensive assessment, obtain an HDB Flat Eligibility (HFE) Letter, which outlines your entitlements, including CPF housing grants and loan eligibility. Alternatively, consult directly with the Housing and Development Board for personalised guidance on your eligibility and the grant application process.
Can I buy a resale flat if I own private property?
There are restrictions on owning private property while purchasing an HDB flat. You must dispose of your private property within six months of purchasing the HDB flat. Check the latest regulations for any updates.
Tips for a Smooth Resale HDB Flat Purchase
Research Extensively
Familiarise yourself with the HDB resale market and understand current trends and prices for resale flats. By staying informed about the market conditions, you can make better decisions regarding the timing and pricing of your purchase.
Check Eligibility
Ensure you meet all eligibility criteria for the HDB flat and any CPF housing grants. Verify your HDB flat eligibility as a Singapore citizen or Permanent Resident, and ensure your monthly household income falls within the required limits. Meeting these criteria is crucial before you submit resale application.
Secure Financing Early
Obtain your in-principle approval for a housing loan early in the purchase process. This involves getting a preliminary assessment from your chosen lender, outlining the potential loan outcome. A convert-in-principle approval ensures you know your budget and can move forward confidently without financial delays.
Prepare Documentation
Have all resale documents ready to streamline the resale application process. Gather essential documents such as identity proof, income statements, and details of your CPF Ordinary Account. Proper documentation will facilitate a smooth and swift process when you complete a resale application and avoid delays in receiving written confirmation from HDB.
Engage Professionals
Consider hiring a property agent or lawyer to assist with the HDB resale process. Professionals can provide valuable insights and handle the complexities of the transaction, from negotiating the resale price to managing the legal paperwork. Their expertise ensures that all resale fees are accurately accounted for and that the HDB resale transaction proceeds efficiently.
Utilising the HDB Resale Portal
Remember to utilise the resources on the HDB resale portal and seek professional advice. With careful planning and due diligence, you can secure a resale HDB flat that meets your needs and budget, turning your homeownership dreams into reality.
Conclusion
Buying an HDB resale flat in 2024 involves a detailed and structured process. You can confidently navigate the HDB resale process by understanding each step and preparing accordingly. By following these steps and understanding the intricacies of the HDB resale process, you can confidently navigate your way towards becoming a proud homeowner in Singapore.
Looking to sell or buy a new home? Find out more at Mogul.sg.
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