Property loan help

[turbones]

Hi all, have some qns I hope those who know can help clarify.

1. If me and my siblings intend to take out a loan so that our entire family including my parents can move to a larger place, is it necessary for our names to be included under the ownership title of the new property? My parents are 62 so they won't be able to borrow.

2. How long must the main borrower be working and does he need to hold a perm job? Would holding a contract role affect my credit worthiness?

TIA.

 

[Pokémon]

HDB or private property?

HDB or bank loan?

 

[turbones]

HDB or private property?

HDB or bank loan?

Private property and bank loan. Also the proceeds from the sale of our current home will cover about 85% of price of new property.

 

[MortgageSingapore]

You and your siblings who are going to take up the loan has to be the owner of the property in order to qualify for bank loans.

 

[wizardnking]

u belly how soon. belly good take care parent. But, all cannot, hdb or private. yr name must be in there. unless u pay in full. or parent sell off properties to pay off new one.

 

[Pokémon]

Private property and bank loan. Also the proceeds from the sale of our current home will cover about 85% of price of new property.

Last time before all the cooling measures were introduced, my aunt bought a condo and was unable to secure a bank loan due to her age. She was able to get the loan with her daughter being the guarantor however.

With TDSR introduced, the children can still be guarantors, but need to be joint-borrowers, yet need not be joint-owners if I am not wrong.

Source: https://blog.moneysmart.sg/home-loans/mas-latest-rules-for-property-loans-and-how-it-affects-you/

Note: Please call and check with any banks on such home loan queries instead of asking for an answer here.

 

[henrylbh]

Hi all, have some qns I hope those who know can help clarify.

1. If me and my siblings intend to take out a loan so that our entire family including my parents can move to a larger place, is it necessary for our names to be included under the ownership title of the new property? My parents are 62 so they won't be able to borrow.

2. How long must the main borrower be working and does he need to hold a perm job? Would holding a contract role affect my credit worthiness?

TIA.

Private property and bank loan. Also the proceeds from the sale of our current home will cover about 85% of price of new property.

Appears like the present property will be sold to partly pay for the new one. And the new one will be financed by you and your siblings. Appears like it 's going to be a messy affair in the future.

 

[Pokémon]

Appears like it 's going to be a messy affair in the future.

Kind of agree on this. Relationships may change no matter how close one can be now.

It can get complicated when one gets married, with 'outsiders' getting into the picture (assuming all are single now).

 

[turbones]

Appears like the present property will be sold to partly pay for the new one. And the new one will be financed by you and your siblings. Appears like it 's going to be a messy affair in the future.

We are one of the families affected by the recent enbloc sales so we will definitely need to look for a new place. I agree there's a possibility of relations going sour in the future but as it is even if our estate had not been bought by a developer, all of us would very likely be staying together for the next 7 to 10 years. And even if one of us moves out to live with a partner in maybe 3 - 5 years, it is very likely that he will be able to tweak his share of the contribution to the monthly installment.

So does this still sound as dangerous to you? If so please tell me why so that I won't be blindly courting for trouble, thanks.

 

[turbones]

Kind of agree on this. Relationships may change no matter how close one can be now.

It can get complicated when one gets married, with 'outsiders' getting into the picture (assuming all are single now).

I agree with you that things can change when we want to settle down with our current/future partners. But say we are thinking of sharing a loan of 300 - 500k, isn't it possible for each of us to still contribute a few hundred dollars a mth assuming a tenure of 30 years even after we have our own bto flats which will be serviced monthly by our cpf?

 

[Pokémon]

But say we are thinking of sharing a loan of 300 - 500k, isn't it possible for each of us to still contribute a few hundred dollars a mth assuming a tenure of 30 years even after we have our own bto flats which will be serviced monthly by our cpf?

As long as you have your finances worked out, I am sure it is possible.

Do take note that once you are a joint-borrower, it will lower the percentage of how much you can get on the 2nd loan, due to the TDSR. Those intending to get their own property down the road should take note of this.

Speak to a banker together with all your siblings, have your all your doubts cleared, before plunging in.

 

[MortgageSingapore]

We are one of the families affected by the recent enbloc sales so we will definitely need to look for a new place. I agree there's a possibility of relations going sour in the future but as it is even if our estate had not been bought by a developer, all of us would very likely be staying together for the next 7 to 10 years. And even if one of us moves out to live with a partner in maybe 3 - 5 years, it is very likely that he will be able to tweak his share of the contribution to the monthly installment.

So does this still sound as dangerous to you? If so please tell me why so that I won't be blindly courting for trouble, thanks.

For example,

Parents, you, +1 sibling jointly buys the new house.
Currently none of you/sibling have any commitment or owns any house.

In the future, maybe 5 years down the road.

You want to move out as you're getting married with your spouse, want buy bto etc.

You will have to remove your name from current house, and the remaining person which is your sibling, will have to be able to tank the loan on its own as you can't buy a hdb with a private property on hand.

If your siblings can't tank with the income that he/she earning by then, you can't get your name out and your plan to buy hdb will be affected.

Removing your name will involve legal fee, stamp fee, as it involve selling and purchasing between you and your rest of family likely your sibling who's buying it.
Money for purchase can be a 'left pocket out, right pocket in' way but for the stamp fee, loan, all has to be proper and total legal fee easily likely to be in 5 digit area.

Just FYI.

 

[henrylbh]

I agree with you that things can change when we want to settle down with our current/future partners. But say we are thinking of sharing a loan of 300 - 500k, isn't it possible for each of us to still contribute a few hundred dollars a mth assuming a tenure of 30 years even after we have our own bto flats which will be serviced monthly by our cpf?

There will be a long list of eventualities to tackle and agreed upon by all including those not financing the purchase since it's a 'family house' and parents may be in a difficult position to say whatever they want or like.

 

[vinz]

1) Age of all siblings who are going to get involved in this? How much the one with the lowest salary earned , and is it possible to leave him/her out of it? Or can one person be the owner of the unit and the rest contribute cash monthly as a form of "rental" to help him/her etc.

2) Intention of each siblings to get their own PTE or HDB few yrs down the road with spouse?

3) Parents at retirement age, assume existing house under their name, they willing to part with the money from enbloc to pay 85% ? Shouldn't it be more amount allocated for their retirement?

4) Getting a bigger unit? Private ? Is there a need? Why dont get HDB Executive with 4 bedrooms (around 148 to 151 square meters) , and maybe its enough to pay off 100% instead of taking a loan ?

5) Like what everyone mentioned, its seems peaceful now when everyone is single or no spouse involved etc.

But cracks will happen when one of you want to get your name out and the one remaining as owner cannot afford the loan at that stage.

(worse case scenario is sell , and everyone get their own money+CPF back, but the older generation may be left homeless again due to their age and cant take a loan. Buy again incurred another set of legal fees + stamp fees)

isn't it possible for each of us to still contribute a few hundred dollars a mth assuming a tenure of 30 years even after we have our own bto flats which will be serviced monthly by our cpf?

I don't think you know that private property "OWNERS" are not allowed to ballot for any BTO, and even if you get your name out of a private property today, there is a time barred of 30 months before you even can apply for a BTO. and it take another 3 to 5yrs for a BTO to be ready after balloting. So total around 5 yrs to 6 yrs of yourself being "HOMELESS".

Just thinking out loud, give u an idea what's the pros and cons of what you are thinking of doing. No wrong or right to what you decide, just giving our own personal views.

Good luck.

-vinz

 

[darknite84]

You are going down a dark path, know all the rules before comitting.
Currently only owners of the property can be a borrower, no more guarantor under current rules.

Also once you are the owner of a private property, you are not allowed to ballot for any BTO or SOBF, have to wait for 30 months after disposal before you can even attempt to ballot. Which could be several attempts.

Also since it's the recent enbloc sales, you all should be quite decently cash rich, I don't think it is prudent for the younger generation to lock up their potential property purchase, so that your parents could have more cash to spend

 

[turbones]

Hi all, thanks for your inputs. I will take note of the points and advice you have brought up.

Actually it is my parents who thought of this plan because they intend to divide 1/3 of the sales proceeds of our next property (anywhere from 5-10 years later when most of us have moved out) equally among us, to help with the payment of our bto flats/private apts. They believe that if we their children have to service our housing loans on top of providing for our own families, we will be less willing to provide allowance to them and also relations among us will be strained when one of us is doing better and so less affected by their own housing loan than the others. There will come a time when all of us will disagree with who should foot the living allowances of our parents and how much etc. So they intend to bless us with an equal portion of money to lessen our burden. This means they would have 2/3 of the sales proceeds to downgrade to a smaller apt or flat and also do some other investing of their own. By the way there are five of us children in this family and our current house is 161 sqm so we all agree not to settle for any thing of a smaller size as our next home.

I appreciate all your comments and we will go and speak to a home loan specialist at length. I also understand now that the main problem is that the main borrower has to wait 30 months after he has taken his name off the property to bid for a bto flat so yeah appreciate it.

 

[henrylbh]

Hi all, thanks for your inputs. I will take note of the points and advice you have brought up.

Actually it is my parents who thought of this plan because they intend to divide 1/3 of the sales proceeds of our next property (anywhere from 5-10 years later when most of us have moved out) equally among us, to help with the payment of our bto flats/private apts. They believe that if we their children have to service our housing loans on top of providing for our own families, we will be less willing to provide allowance to them and also relations among us will be strained when one of us is doing better and so less affected by their own housing loan than the others. There will come a time when all of us will disagree with who should foot the living allowances of our parents and how much etc. So they intend to bless us with an equal portion of money to lessen our burden. This means they would have 2/3 of the sales proceeds to downgrade to a smaller apt or flat and also do some other investing of their own. By the way there are five of us children in this family and our current house is 161 sqm so we all agree not to settle for any thing of a smaller size as our next home.

I appreciate all your comments and we will go and speak to a home loan specialist at length. I also understand now that the main problem is that the main borrower has to wait 30 months after he has taken his name off the property to bid for a bto flat so yeah appreciate it.

Not so simple as your think. You need more than a loan specialist.

5 children and divide 1/3 of the sales proceeds of our next property equally will lead to potential differences in views and this is only one of the many conflicting views.

 

[turbones]

Not so simple as your think. You need more than a loan specialist.

5 children and divide 1/3 of the sales proceeds of our next property equally will lead to potential differences in views and this is only one of the many conflicting views.

I get that there will be changes in our views even though all are onboard this general plan now. The 1/3 of the proceeds are decided by my parents. Why would there be a problem with it? It is their money. The problem I see most contentious is how to recompense the person/persons who serviced the loan to make up for the shortfall in getting our new property now. Ideally, it should be objectively determined, ie we get back how much we contributed to the loan on top of our portion of the 1/3 proceeds which should not be affected by this. & I understand it might not be so straightforward to calculate how much we should get back for the loan we service since the price of the property will grow over the years. If we are going to be returned the amount we contribute for the loan, won't it then be like an investment and so we will more motivated to contribute?

 

[theblueark]

A bit confusing.

5 siblings so you intend to split the loan 6 ways and arrange as tenancy-in-common? Each hold about 16-17% share of the house?

E.g your parents hold 20%, each of you take up a loan and hold 16%?

Then the idea for 1/3 and 2/3 means your parents will split their 20% into 3, they use 2/3 of the 20% to downgrade and 1/3 of the 20% split into 5 for each of you?

Or are you thinking you all will help take the loans but the house still 100% owned by your parents? Cos that is not possible.

 

[turbones]

A bit confusing.

5 siblings so you intend to split the loan 6 ways and arrange as tenancy-in-common? Each hold about 16-17% share of the house?

E.g your parents hold 20%, each of you take up a loan and hold 16%?

Then the idea for 1/3 and 2/3 means your parents will split their 20% into 3, they use 2/3 of the 20% to downgrade and 1/3 of the 20% split into 5 for each of you?

Or are you thinking you all will help take the loans but the house still 100% owned by your parents? Cos that is not possible.

Definitely not the first 3 paragraphs. More towards the last paragraph. Our parents will still be majority owners of the new property since they will be footing 85% of it. Borrowing 15% for shortfall will require me and probably one other sibling to put our names as co-owners with our parents. Unless you're telling me that once we borrow any amount to finance even 15% of a property, we have to be the complete owners of it, to the exclusion of my parents. Doesn't make sense since they came out 85%. And I am willing to consistently service the loan because I don't see it as a lost cost since I eventually will be repaid it. And even if one or two of us are listed as co-owners with parents, I don't think we two will try to snatch the asset from our parents since that is really out of order and unfilial.