Tag Archives: Buying our first home

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As some of you readers may know, Skai and I became home-owners last year. It has been great owning a little cosy place of our own.

As I received some comments and queries previously, I'll like to share my 3 reasons on why I chose my BTO.

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1. Budget

When Skai and I got engaged, our first thought was where we were going to stay. We had made plans to hold our wedding dinner in a few years’ time. As most couples would know, wedding banquets are not the most affordable thing ever. We felt that we could not afford to hold a banquet and a honeymoon and afford a house, all at the same time.

We then decided that applying for a build-to-order or BTO flat would make the most sense for us financially. This would give us ample time to save up for the renovation and furnishing for our dream home.

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We had only started working for a few years back then and we did not have much savings nor CPF at that time. It was a sound financial decision to stick to choosing an affordable home. Also, if one does their sums wisely (which we definitely did), you'll not have to fork out any cash. We made sure of that when we chose our BTO.

2. Size

We wanted to make sure that we would pay zero cash when we bought our first home. As much as we wanted to clear our loan as fast as possible, we also did not want to fork out any cash monthly for the monthly instalments. We wanted to free our funds so that in the event of a rainy day, we would have some savings set aside.

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BTO flats can go as low as:
- 2-room Flexi BTO flats from as low as $4,000
- 3-room BTO flats from as low as $100,000
- 4-room BTO flats from as low as $200,000
- 5-room BTO flats from as low as $330,000

With this consideration, we decided to opt for a 4-room flat instead of a 5-room flat. They actually both have 3 bedrooms! Opting for a slightly cozier size also helps to manage the overall cost of my flat. And in the event that we really need more space, we can always upgrade to a bigger flat in future when our finances improves. But for our current needs of a family of 3, a 4-room flat is perfect!

Another reason why you may want to consider a 4-room or smaller flat in a non-mature estate is because you will then qualify for the Special CPF Housing Grant (SHG). The household income ceiling for the SHG has been raised to $8,500 last year, so most young couples can enjoy it.

This means that together with the Additional CPF Housing Grant (AHG), first time buyer can get housing grants of up to $80,000 for BTO flats! This will really help you save quite a bit of money. Sadly, we did not get to enjoy any housing grants back then as our combined income exceeded the income ceiling 5 years ago. But this will not stop me from sharing the news with you.

So for example, if you and your spouse (-to-be) are earning a combined monthly income of $4,000 and want to buy a 4-room flat in a non-mature estate, you will qualify for grants of $55,000. Be sure to read up about the available grants here so you can use them wisely for your home!

If we could buy a flat now, we would be eligible for grants! This would have made our home even more affordable!

I am really glad that we decided to make a prudent choice. Being a new mother adds up to quite some costs with the pregnancy and birth. Despite paying cash mainly for our renovation and furnishings, we are still able to cope and are comfortable with the expenditure.

3. Location

Skai was pretty adamant on choosing a non-mature estate. During the time that we were deciding between which BTO project to apply for, Punggol and Sengkang had the most choices and launches. They were also priced much lower than the mature estates like Toa Payoh.

Both Skai and I have lived in mature estates previously. He in Toa Payoh and I in Bedok. While mature estates do offer convenience with adequate amenities, I do feel that they are rather stagnant. Not to diss mature estate lovers, but it's pretty much 'set in stone' with the facilities, buildings and amenities.

For us, we wanted to stay in a non-mature estate because of the people around us. Many homeowners in non-mature estates are new couples or new families. It would be nice to grow and be with like-minded people. After getting my house, two of my other girlfriends also got their BTOs in Punggol! We were very excited about this news and we talked about hanging out often at each other's places!

Also, as a new mother, I love how baby-friendly Punggol is! I've found and made new friends and we love going for gatherings together with our babies.

After looking at the locations and studying the master plans of both Punggol and Sengkang, we decided to buy a home in Punggol. With the plans to develop Punggol, we felt that it had the potential to grow to be the next Tampines, if not more, in a few years time.

And we were right! While we were waiting for our BTO, there were announcements of the Punggol Safra and Waterway Point to be built. And we were super lucky, after getting our keys, both of these areas are now ready. We love visiting Waterway Point. It's extremely HUGE and is super baby friendly!

Not to mention the picturesque Punggol Waterway Park. We can always go for a stroll along the waterway on weekends, and stop by the cafes for a cake or ice cream, or both!

There are also other upcoming developments, which I can’t wait to take my friends and family to! There will be a stadium, swimming pool and a creative cluster coming up.

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These attractive amenities were all located fairly close to my BTO. Plus the LRT is just 5 minutes away which is extremely convenient for me!

We also chose a premium BTO which gave us a very good view. Friends are always amazed that a BTO could enjoy such an unblocked view.

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These are my 3 reasons to why we chose our BTO. Both Skai and I feel that BTOs can be affordable if you make prudent choices. Coupled with the assistance and grants available, owning a place of your own at an affordable price can be a reality.

I hope that you've enjoyed reading this piece!

Thanks for reading nadnut.com - Singapore Lifestyle Blog! Do follow me on TwitterFacebookInstagramDayre and Snapchat (nick: @nadnutdotcom) to get quicker updates of my life! For advertorials, media invitations or sponsored reviews, please contact me here.

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Here’s how we decided on what home to buy.

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As some of you guys may know, I finally moved in to my home this year. I’ve shared previously on my renovation aspects but have yet to share how Skai and I decided on the choice of our home.

Type of housing?

At the point where both of us decided to take the next step, Skai and I discussed the type of housing that we were looking for e.g. HDB, Condo, Landed etc.

As both of us were two broke fools, we talked about feasibility. At that time, I had just graduated from university and started on my first job. Skai had only worked for a couple of years. Based on our combined income, we could not afford any huge downpayments as we did not have any savings then.

We decided that a HDB was a good fit for both of us. We looked at our CPF contributions and toyed with the idea of a 4-room or 5-room, and finally decided on a 4-room. Reason being, if we had bought a 5-room flat, the monthly instalments would be more than our monthly CPF contributions. That meant that we would have to top up cash, which I wasn’t comfortable with. I would rather buy within our means.

$ & Location?

The prices of a 4-room flat in a mature estate differs drastically from a 4-room flat in a non-mature estate. While we were looking for a HDB flat, we also had to consider between a resale or a Build-To-Order (BTO) flat. As mentioned, we did not have any savings at that point in time and the property market was a seller’s market then. Thus we’ve decided on a BTO instead of a resale.

Another thing to consider was location - we would have loved to stay near our parents but there were hardly any BTO projects at Bedok or Toa Payoh back then.

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While we were looking through the BTO launches, we noticed a stark difference in prices due to location. A 4-room flat in a mature estate such as Clementi would cost way more than a 4-room flat in non-mature estates such as Punggol. In fact, the 4-room flat in Clementi could cost more than an average 5-room flat!

Again, as our main concern was affordability, we decided to opt for a BTO in a non-mature estate. Skai was also excited about the development prospects in Punggol back then.

Thus, we leaned towards BTOs in Sengkang and Punggol. Not too bad a decision in the long run and it really paid off. Waterway Point, one of the largest shopping centres in North-East, and Punggol Safra was built near our BTO. While Punggol is considered an ‘ulu’ location to many, I love how scenic and quiet the place is.

Also, as a bonus, I get to wake up to this view every day.

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So we applied and got our flat 4 years later.

Deliberations over loans.

4 years went by and our keys were ready for collection. During that time, Skai and I had accumulated a considerable amount in our OA (Ordinary Account) as both of us worked right after graduation. With our loan amount reduced, our monthly instalments would be lesser too.

Take for example, a couple earns a combined income of $4,000 and assuming that they do not enjoy any increments over the 4 years.

Their monthly CPF contribution would be $1,480 (inclusive of employer’s contribution of 17%). 23% out of the 37% goes to the OA account, which means that they would have accumulated at least $40,000 in their OA account! Reducing the loan by $40,000 would mean that you could opt for a shorter loan or lessen the monthly instalments.

Another thing that Skai and I agreed on was to opt for a shorter loan tenure. Most people do not realise how scary compound interest is. For example, if we had opted for a $300,000 loan over 25 years, the total amount that we would have paid inclusive of our interest would be: $408,300. That means the interest alone would be $108,300!

On the other hand, if we had opted for the same loan over 15 years, the total amount that we would have paid would be: $362,700. That’s a difference of $45,600! Madness. Also, that would mean losing out on at least 2.5% interest that we could gain if we left our savings in our CPF accounts! Needless to say, Skai and I opted for a shorter loan tenure.

Another factor that we considered was that we wanted to pay off our housing loan before we hit the age of 55 when the contribution rate would have decreased. We also aim to further shorten our loan by making partial capital repayment as much as we could afford.

Moreover, we managed to free up our cash for other expenditures since we need not fork out cash for our monthly instalments. Thankfully we did, as a very big unexpected expenditure popped up this year: giving birth and raising a child.

Spending within our means.

In order to pay for our home without breaking the bank, we decided to scrimp on certain aspects and splurge on others.

We did not overspend for our renovation. While some may have gone for the works with a budget of $80,000 (yes, we’ve heard of such cases. This is just on renovation, excluding furnishings or electricals!), we decided to spend more on affordable furnishings that we purchased overseas.

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Instead of opting for designer furniture, we played with furnishings such as colourful cushions, a “hipster” carpet and some affordable balcony furniture to create a cosy and homely feel. Definitely getting more bang for our buck!

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Also, there are many other costs involved ASIDE from the monthly housing instalments. There’s insurance, utilities, taxes, conservancy charges. These necessary expenses were definitely more important than overspending on frivolous items.

Conclusion?

I think we managed to own a cosy and comfortable home according to our needs. Thankfully we were financially prudent thus for unforeseen expenses (like giving birth this year) didn’t set us back.

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Here’s my personal take on how we could afford our home. 🙂

While this is a sponsored article by CPF Board, opinions are my own.

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