My wife suddenly told me 2 weeks ago that there is an EC launch for 3 Gen living near our place. We will hit the ceiling sometime in April and this could well be our very last chance (without financial engineering) to get an EC.
Her reasons are simple, bigger space as our son grows up, her parents who took Care of us can then rent out their unit and enjoy their golden years.
As a investment, I would say no no, but for reasons like this, I said I will find out more. For clueless people like me, this is what I found out:
1) once I make a booking in March, it does not matter if our income ceiling is broken in April. TOP date is no longer important and there is no need for appeal.
We went to the showflat. The location is rather ulu. Again I told my wife and MIL that if we do buy this unit, it is for our living, as an investment, it sucks. But it is not really possible to get a 4-room private property at below 1 mio unless property goes into a depression.
A banker showed us the maximum loan we can take. I begin to understand why people rush to flip properties:
1) As the loans disperse towards the TOP date, interest and repayment for the initial 3-4 years are insignificant. If u are confident of selling it at a higher price within 3 years, there is no risk of monetary pain because principal amount is not high before TOP.
2) I can Loan beyond 55. OcBC offered 29 years loan. I would be 66 then. Ouch.
We decided to finally give this a miss and go for her friend's recommendation of BTO 3- gen flat which is also nearby. This one I liked very much and total family is still within ceiling of 18k.
But income ceiling of group A (me and my wife) must be below 12 K. Good bye to HDB BTO.
A few reflections:
1) property buying is a very emotive issue. My wife is visibly upset when I throw spanner at her and when she realized we cannot go for BTO anymore.
2) I asked her if she really want to have a loan till the 60s?
3) She still harbor the thought of leaving behind a private property for our son. Most probably because her sister live in a private place and is leaving the 999 leasehold unit for her daughter.
4) I actually find the concept very unsound. Her sister took a 800K loan. Paying cash after clearing their CPF. They have some buffer because they have sold unit profitably twice.
I ask my MiL and wife, if my CPF is Zero, and I worked till 60 plus, depleting also my cash savings, can I retired well? Can I really not encash that property and leave it for the children? Wouldn't I be more of a burden?
It is possible to keep flipping the property for higher value and win.
Property prices could also escalate so high that u are laughing to the bank.
But I risk averse. I say either we buy resale HDB or we wait for property market to get worse. Or she quit her job for 3 years.
She gave me the stare.
I actually enjoyed continuing milking my HDB and buy a small property with Rent and the final sale and then flip that property away for a final "property"
I think too much right? LOL