06 March 2014

My Mom is Really Annoying

She keep saying that I will have difficulty paying for my own flat but I did my sums and everything is fine! If I can't afford it, then plenty of people also can't afford it, and how in the world did my friend manage to get a 3-room BTO at Ghim Moh with his mom for $370K? He has to pay $1400+ per month! About $700+ of that in cash! By the way he is paying by himself. Let me show you my sums.

The unit I'm buying is valued at $260K, my agent is negotiating $250K and seems like he succeeded, tonight we will pay the option fee of $1K, probably another $4K next week to exercise the option and I have all the cash ready, in fact latest by Monday I would have about $10K cash at my disposal, more than enough for the deposit and agent fees. As for CPF OA, by Monday I would have about $75K because I sold my stocks recently. By the way we qualify for $15K singles housing grant.

Best Scenario
Buy at $250K, CPF OA $75K, singles grant $15K, pay $5K deposit, loan $155K from HDB, monthly repayment $704 based on 25 years.

Worst Scenario
Buy at $260K, CPF OA $75K, no singles grant, pay $5K deposit, loan $180K from HDB, monthly repayment $817 based on 25 years. But most likely we can get the singles loan.

As mentioned, I have $10K cash ready by Monday to pay for the deposit and agent fees, probably will have leftover of $2K+.

For that unit, we only intend to change the kitchen flooring and sink, and repaint the whole unit by ourselves, it's not a huge sum of money, probably can settle with less than $10K and we can take our time to do it so no need to take a loan. Furniture and etc, as mentioned we can take our time so we can slowly accumulate, again no need to loan. I foresee after paying for deposit and agent fees, I will still have about $10K left if I sell my Sheng Siong and Lippo Malls shares, every month we also have cash surplus of about $1K so we should have no difficulty working with it over a few months to do up the unit, so it's not as if once we get the keys we must move in immediately.

But one thing to take note if we buy this unit, it's an old unit with 52 years left so we can only use up to about $130K CPF, this includes the loan payments, my $75K CPF OA and $15K singles grant. Once we hit this limit, we must pay by cash. It will probably take us 4-5 years to hit that limit but let's look at my spending if I should live there now.

My take home salary: $2783
Give wife: $600
Myself: $500
Internet and mobile: $120
Electricity and water: $100
Conservancy fees: $28.50 for 2-room flat
Property tax: $0 for 2-room flat
Leftover: $1434.50

I'm not even counting my allowance, bonus, government subsidies and etc and let's say we have to pay in cash now for the housing loan, we are capable of doing it and we still have surplus to save be it  $704 or $817 per month in loan repayment. And during this 4-5 years, I intend to continue investing and aim to one day be able to collect enough dividends to cover my housing loan.

So what's the problem? Even if we have one child, I'm still confident of going through with it, in fact it will make me want to work harder. It's just a matter of time when we have to leave our parents and start our own family, of course there will be hurdles, not everyone is so lucky to have rich parents.

11 comments:

San said...

Hi MTGS,

I'm just wondering what do you mean by "it's an old unit with 52 years left"? What would happen afterward? Anyways, hope you succeed in getting your dream flat and everything works out for you. Best of luck!

-San

marrythaigirlsingapore said...

Hi San,

As you should already know, Singapore HDB flats comes with 99 years lease, 52 years left means the unit's lease start date was 01 Jan 1967, so from then until now, the flat is about 47 years old, so 99 years minus 47 equals to 52 years left.

So what would happen after that I think nobody knows because so far no HDB flat in Singapore has reach 99 years, but for older blocks, HDB currently has a Selective En Block Redevelopment Scheme (SERS) going on, what they do is they will inform the owner that the unit is selected for SERS, they will then send a valuer to determine the market value of the flat, HDB will also compensate the owner and offer rehousing option at subsidized rate.

Hope that clarifies!

MidasSL said...

Hi!

Just wanted to encourage you as I was reading through your blog. All the best for your first housing purchase.

marrythaigirlsingapore said...

Hey Midas,

Thanks, could use the encouragement!

Anonymous said...

You are a very typical Singaporean writing very honest and Singaporean style Blog. I enjoy reading! Keep coming, good luck!

marrythaigirlsingapore said...

Hey, thanks for the kind words, appreciate it!

Anonymous said...

Again is me, I will input something here very honest opinion. I stay Anonymous then.
Comes to money matter, no relationship, friendship even kinship. I am in quite similar situation like you. I never thought my siblings and parents will ever have money issue with me..... And now bro, I cut relationship with all of them....because of....... MONEY!!!! Love is easy to say.... but MONEY means everything.

marrythaigirlsingapore said...

Well, I hope I won't end up in your situation, but then it's really hard to say when money is involved, sigh.

Anonymous said...

Came across your Blog and keep reading until I stopped here. This topic catches my attention.
Perhaps I can type my story here and MTGS can screen captured for readers to comment.
I am in my mid 40s, Msia wife without children. Mending my own biz for 15 years until recently biz cannot continue. Staying with parents, 3 sisters but 2 already married in a 5 room flat.

When I am in my pea, I gave my Mom 1.5k every month until recently reduced to $500. I always believed , they will be no parents just looking upon the amount of money their children give them, love will stay forever regardless their children income.


But I am wrong, very very wrong. Currently me and wife shifting out of the house, buying a resale and start anew. My point of view, there are alot of parents also money face, have money for them, you are the darling, not much for them, you faster go and die attitude.

As far as I am concern, you got a nice Blog, perhaps screen shot this, let readers comment. Again, I don't believe is kinship love..... no more!!!

Regards M&M

John Lim said...

I am very impressed with your financial prudency! Great reading your blog!

Anyway, there is a high chance that your flat will be SERs by the government and by then, they maybe able to offer you a replacement new BTO!

Regards
JL

marrythaigirlsingapore said...

Hi John,

Thanks for dropping by.

I think it will be great if my block is selected for SERS! Thanks!