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HDB flat paid fully with CPF is a big mistake?

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Old 25-06-2018, 02:20 PM   #1
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Question HDB flat paid fully with CPF is a big mistake?

Hi,

Is it true that if we have paid fully for a HDB flat with CPF is a wrong move?...

I was told by my relative that I should not have paid in full as he mentioned I have lose out on the insurance whereby if one of the owner pass away, the house will be free for the other owner...

I believe what he meant was HPS?...

But when I collect key that time, HDB wipeout all my CPF and no loan require...
They did not ask me for a choice to use HDB loan...

I am confuse...

Thank you in advance...
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Old 25-06-2018, 02:39 PM   #2
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Ask your relative; then if your spouse don’t die, you know how much interest you will be paying?

HPS also gian, really chao sinkie to the max sia.
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Old 25-06-2018, 03:04 PM   #3
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No difference from buying a term insurance and getting a payout when spouse die. They got buy big big big premium life insurance? If never buy is a wrong move cos they miss out the chance to get big big big payout when spouse die.

If you gian, you can still go buy a term insurance the exact same value as your HDB flat. So if one owner die your flat is "free".
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Old 25-06-2018, 03:21 PM   #4
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If you gian, you can still go buy a term insurance the exact same value as your HDB flat. So if one owner die your flat is "free".
This one is a better choice. You get to 'earn' more, since it is not diminishing as compared to HPS which is a form of mortgage insurance.
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Old 25-06-2018, 03:21 PM   #5
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Appreciate guys for the responses!...

I understand now... I will just ignore it then...

Anyway, I am just happy that I got a rooftop over my head...

Thanks!...
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Old 25-06-2018, 08:30 PM   #6
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Hi,

Is it true that if we have paid fully for a HDB flat with CPF is a wrong move?...

I was told by my relative that I should not have paid in full as he mentioned I have lose out on the insurance whereby if one of the owner pass away, the house will be free for the other owner...

I believe what he meant was HPS?...

But when I collect key that time, HDB wipeout all my CPF and no loan require...
They did not ask me for a choice to use HDB loan...

I am confuse...

Thank you in advance...
1) HPS is 1 thing
2) Accured interests is also a factor you should consider.
Later when u sell than u will know why. (Big Can)
3) Interests is low for housing no need to rush.

Hence they are right

For your case all wont applied as u opt for HDB loan.
So above factors that i have mention on top wont do any differences to you.
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Old 25-06-2018, 09:17 PM   #7
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Hi,

Is it true that if we have paid fully for a HDB flat with CPF is a wrong move?...

I was told by my relative that I should not have paid in full as he mentioned I have lose out on the insurance whereby if one of the owner pass away, the house will be free for the other owner...

I believe what he meant was HPS?...

But when I collect key that time, HDB wipeout all my CPF and no loan require...
They did not ask me for a choice to use HDB loan...

I am confuse...

Thank you in advance...
Your relative is based on quite a old concept and theory on HDB flat ownership upon the death of the sole paymaster of the HDB loan.

History.
In the past, when the owner passed away and the co-owner will have to continue to make good the loan payment in order to continue to own & live in the said flat.
At that time there were many cases where the owner who was the sole breadwinner and payment for the HDB loan, and the co-owner had no money &or work.
The living co-owner was forced to either moved out (nowhere to stay) or buy over by takeover & continue to service the HDB loan.
It was at this stage that these co-owner without any money was forced out of the HDB flat to nowhere to stay.

Hence there come this dilemma in order to let the living co-owner to continue to live in the said flat.
This is where from that point onward, all HDB Loan will include an insurance scheme.
When the owner passed away and the balance of the loan will be insured.
This is so that the co-owner will have the rights to take ownership and without the need to pay for the reminder loan to the HDB.

This is where your relative means in "the house will be free for the other owner".

In short as like others had mentioned, it is just an insurance scheme.
As like in any other insurance plan there is some form of payment required.
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Old 25-06-2018, 09:40 PM   #8
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Still must pay back cpf accured interest.

Stay another 20 years, pay back another 20 years of accrued interest.

Correct me if I am wrong.
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Old 25-06-2018, 11:47 PM   #9
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Still must pay back cpf accured interest.

Stay another 20 years, pay back another 20 years of accrued interest.

Correct me if I am wrong.
correct.
it will roll till u sell ur house.
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Old 26-06-2018, 12:00 AM   #10
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Not to clear property loan. Accured interest per year Ai about 8k.

To-date interest is already 18k.
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Old 26-06-2018, 08:01 AM   #11
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So for my case as I have fully paid the BTO without any HDB or Bank loan, I only have to worried about the CPF accrued interest when I sell the house right?...

As long as I do not have any intention to sell the house and live in it for life, I have nothing to worry about the interest...

Correct me if I am wrong...
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Old 26-06-2018, 09:08 AM   #12
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So for my case as I have fully paid the BTO without any HDB or Bank loan, I only have to worried about the CPF accrued interest when I sell the house right?...

As long as I do not have any intention to sell the house and live in it for life, I have nothing to worry about the interest...

Correct me if I am wrong...
Yes correct. Plus even if you sell, the money goes back into your own CPF. Still yours.

And if the sale results in less than the CPF used + accrued interest, there is no need to top up the accrued interest in cash.
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Old 26-06-2018, 09:42 AM   #13
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I would like to ask how the contribution to CPF affects the loan payment.

Assuming I earn $3,500.00 per month.

Employee CPF = $700.00
Employer CPF = $595.00
Total = $1,295.00

After splitting up OA, SA, Medisave, assuming I have, assuming ar... $1,109 left. Can I instruct CPF to disburse $1,100 to HDB?

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Old 26-06-2018, 09:57 AM   #14
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After splitting up OA, SA, Medisave, assuming I have, assuming ar... $1,109 left. Can I instruct CPF to disburse $1,100 to HDB?
Yes you can, based on the assumed amount.

Realistically, the said amount allocated to OA will be $805.12 though if you are aged 35 and below, and $735.18 for above 35 to 45, and so on.
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Old 26-06-2018, 10:18 AM   #15
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So for my case as I have fully paid the BTO without any HDB or Bank loan, I only have to worried about the CPF accrued interest when I sell the house right?...

As long as I do not have any intention to sell the house and live in it for life, I have nothing to worry about the interest...

Correct me if I am wrong...
Yes, however if your house valuation appreciate more than your CPF interest, then even sell house also no need to worry.
Or if i can phrase it this way, if inflation out paces your CPF interest rate then you should be fine when you sell
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Last edited by Hot_Dog; 26-06-2018 at 10:34 AM..
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