Asking regarding loans.

[Jkdada]

Hi! If I'm 62 year old this year and I'm looking to upgrade from my current 3 room flat to a 4 room flat. Is it possible for me to loan from banks? I'm currently staying with two children and my wife.

 

[JuniorLion]

Income-weighted average age of the borrowers must be less than 65. For example, you are 62 and earn $10k a month. Your wife is 58 and earns 5k a month. The income-weighted average age is (62*10+58*5)/(10+5) = 60.67 years old.

So you can borrow. But the tenure of your loan is 65-60.67 = 4.33 years.

So you can take a 4.33 years bank loan. As to how much you can loan, it totally depends on your income and is subject to mortgage servicing ratio (MSR).

 

[Jkdada]

What I'm planning to do is say I sell my current flat for example 300k and the new flat is 400k. I'm planning to use 60k from the 300k for renovation and furniture and the around 140k for down payment the rest is to pay the either hdb or bank loan. But I'm not sure whether it's workable. But my son is coming out of university soon

 

[JuniorLion]

What I'm planning to do is say I sell my current flat for example 300k and the new flat is 400k. I'm planning to use 60k from the 300k for renovation and furniture and the around 140k for down payment the rest is to pay the either hdb or bank loan. But I'm not sure whether it's workable. But my son is coming out of university soon

After selling your flat for 300k, you need to first pay back the HDB loan/bank loan that you had taken on this flat. Then the remaining, you need to pay back CPF on the "accrued interest". Anything remaining after that, you can use for downpayment for your new 4-room.

Note that if the loan tenure is 3 years, that means you need to spread the payment of the loan over 3 years. For example, if you need to take 150k loan from the bank, you need to pay back 50k + interest every year (e.g. it will be around 60k or so per year). That means your monthly repayment has to be around 5k. It's a simplistic way of estimation, but a good first-cut estimate.

 

[henrylbh]

Income-weighted average age of the borrowers must be less than 65. For example, you are 62 and earn $10k a month. Your wife is 58 and earns 5k a month. The income-weighted average age is (62*10+58*5)/(10+5) = 60.67 years old.

So you can borrow. But the tenure of your loan is 65-60.67 = 4.33 years.

So you can take a 4.33 years bank loan. As to how much you can loan, it totally depends on your income and is subject to mortgage servicing ratio (MSR).

I think loan tenure to 65 is only for HDB loan. Bank loan can be up to age 70 plus?

 

[JuniorLion]

I think loan tenure to 65 is only for HDB loan. Bank loan can be up to age 70 plus?

Should be 65, according to this post by OCBC Bank:
https://forums.hardwarezone.com.sg/...-101-income-weighted-average-age-4389916.html

 

[henrylbh]

Thanks.

Got this from our best friend. https://www.daryllum.com/singapore-home-loan-limits/

 

[antonpoh]

Thanks.

Got this from our best friend. https://www.daryllum.com/singapore-home-loan-limits/

He can loan 100k (8yrs loan) from the Bank till 70yo, the down payment 300k is already above 40%. Monthly installment should be aro $1100+. But because he is above 55, don't know if he can use part of his cpf to pay for the loan/installment after setting aside the Full Retirement Sum (FRS) of 171k.

 

[eric3743]

Minimum Retirement Sum set aside for age 62 is at least $110k.

 

[TabascoSauce]

y do u wan to upgrade at this late stage in life?

 

[henrylbh]

He can loan 100k (8yrs loan) from the Bank till 70yo, the down payment 300k is already above 40%. Monthly installment should be aro $1100+. But because he is above 55, don't know if he can use part of his cpf to pay for the loan/installment after setting aside the Full Retirement Sum (FRS) of 171k.

He is saying that from sale of 300k, he will use 60k for reno and furniture and 140k as downpayment (for his new flat). 100k he pockets

So he needs a loan of 400-140k = 260k. Can or not?

 

[henrylbh]

y do u wan to upgrade at this late stage in life?

Upgrade is perfectly ok. But to get into a long financial commitment at 62 is quite another matter, unless he has some ideas not disclosed.

 

[henrylbh]

Minimum Retirement Sum set aside for age 62 is at least $110k.

His min sum should be 117k and his monthly payout from 65 would be $1,040 if he met the min sum without property pledge/charge. Must be strong to want to go into financial commitment even if loan is stretched to 8 years or 70yo.

 

[Jkdada]

He is saying that from sale of 300k, he will use 60k for reno and furniture and 140k as downpayment (for his new flat). 100k he pockets

So he needs a loan of 400-140k = 260k. Can or not?

Thinking to upgrade as im planning to have a room each for my two sons as they are currently sharing a room. The 100k actually I intent to pay the bank loan installment and it can last a while till my elder son graduate and can aid to pay the flat. As it's them who suggested to upgrade.

 

[Mecisteus]

If I were you, I will rent a bigger unit. Rent out or sell my current flat.

I believe your children are teenagers? A few more years they will be independent.

 

[eric3743]

Thinking to upgrade as im planning to have a room each for my two sons as they are currently sharing a room. The 100k actually I intent to pay the bank loan installment and it can last a while till my elder son graduate and can aid to pay the flat. As it's them who suggested to upgrade.

Upgrade is a good idea.

But you need to do some homework as to find out more on the price range and locations.

And to talk to bank &or HDB to get better idea on the loan repayment.
Include CPF on how much you need to return and able to fund for the next flat.

Alternately you may also consider BTO HDB as to able to provide better loan from HDB &or CPF towards the flat.

As not to too dependent on the future for elder son support as to gain employment and better salary are the top priority.

Anyway if there are difficulties in repayment, there are option to downgrade...

 

[Jkdada]

Upgrade is a good idea.

But you need to do some homework as to find out more on the price range and locations.

And to talk to bank &or HDB to get better idea on the loan repayment.
Include CPF on how much you need to return and able to fund for the next flat.

Alternately you may also consider BTO HDB as to able to provide better loan from HDB &or CPF towards the flat.

As not to too dependent on the future for elder son support as to gain employment and better salary are the top priority.

Anyway if there are difficulties in repayment, there are option to downgrade...

But I can't loan from hdb anymore as I'll previously take 2 loan already but I'm eligible for the 25k grant from them. But my biggest question is whether I can loan from bank or not and pay in 20 years? If not I'm just going to shelve off the plan of upgrading.

 

[henrylbh]

But I can't loan from hdb anymore as I'll previously take 2 loan already but I'm eligible for the 25k grant from them. But my biggest question is whether I can loan from bank or not and pay in 20 years? If not I'm just going to shelve off the plan of upgrading.

Shelving the plan or abandon?

Sad to say, it's very unlikely you will be able to get a 20 years bank loan to age 82. Good enough if you can get loan to age 72 but the quantum of loan and monthly payments will be a challenge.

 

[hwmook]

But I can't loan from hdb anymore as I'll previously take 2 loan already but I'm eligible for the 25k grant from them. But my biggest question is whether I can loan from bank or not and pay in 20 years? If not I'm just going to shelve off the plan of upgrading.

You can drop the idea then, there is no way bank is going to loan you until 82 years old.

 

[eric3743]

But I can't loan from hdb anymore as I'll previously take 2 loan already but I'm eligible for the 25k grant from them. But my biggest question is whether I can loan from bank or not and pay in 20 years? If not I'm just going to shelve off the plan of upgrading.

Oic.

Having taken past 2 loan means that you have upgrade or moved houses before.
Not sure if you had make some profit from the past or not, as most would have already.

Hence most likely your past decision did not take into long term for the family especially when children grow up.

This time you may have to take a serious decision before proceeding.