What are the fees that I have to prepare for?
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| A: |
The list of standard fees is as follows:
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1. Legal fees
2. Stamp fees (Purchase + Mortgage)
3. Valuation fees
4. Mortgage Reducing Term Insurance (MTRI) / Home Protection Insurance (HPIS)
5. Fire Insurance |
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What is Stamp Duty / Stamp Fee?
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| A: |
Stamp duty is a form of government tax on certain legal documents and financial contracts which validates the documents or contracts legally.
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How many types of stamp duty are there?
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| A: |
There are 2 different types of stamp duty payable, the Purchase stamp duty and the Mortgage stamp duty. |
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When must the stamp duty be paid?
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| A: |
Once the document is executed, it must be stamped:
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1. |
Within 14 days if the document is executed in Singapore ; or |
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2. |
Within 30 days from the date of the receipt of the document in Singapore if document is executed overseas.
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- For Stamp Duty on Purchase of Private Properties, the stamping depends on whether the property purchased is completed or under construction.
- For private completed properties: Stamp duty must be paid within 14 days from the exercise of option.
- For private uncompleted properties: Stamp duty must be paid within 14 days from the date of the developer’s sales and purchase agreement.
- For Stamp Duty on Purchase of HDB Properties, stamp duty must be paid within 14 days from HDB’s letter of approval for the sale and purchase.
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How are stamp duties calculated?
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| A: |
For Purchase Stamp Duty, the calculation is as follows:
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Stamp duty is based on the Purchase Price or Market Value, whichever is higher: |
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Every $100 or part thereof of the first $180,000: |
$1.00 |
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Every $100 or part thereof of the next $180,000: |
$2.00 |
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Thereafter, every $100 or part thereof: |
$3.00 |
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Another simpler explanation would be, |
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First tier: Up to $180,000 |
– it is at 1% |
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Second tier: From the next $180,000 |
– it is at 2% |
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If the purchase price exceeds $360,000 |
– it is at 3%
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For example, a property that has a purchase price of $1million will be as follows:
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- Tier 1 = 1% of $180,000 = $1,800
- Tier 2 = 2% of $180,000 = $3,600
- Tier 3 = 3% of $640,000 = $19,200
- Purchase Stamp Fee = Tier 1 + Tier 2 + Tier 3 = $24,600
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Short Cut: As long as the purchase price is above $360,000, you can calculate the stamp duty at a flat 3% less $5,400.
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For Mortgage Stamp Duty, the calculation is as follows:
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- Mortgage Stamp Duty is calculated at $4 per $1,000 of loan signed. Therefore, if the loan is for $100,000, the stamp duty will be $400.
- This has a ceiling of $500. This means that any loan amount above $125,000, the duty payable will remain at $500.
- For each duplicate copy of the Loan Agreement, there is an additional $2 charge.
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What documents must I furnish to the solicitor?
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| A: |
For Purchase Stamp Duty, the calculation is as follows:
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Once you have concluded the deal and signed the Option to Purchase, you would need to bring the following documents to the solicitor’s office for them to start the legal process: |
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1. |
Original Option to Purchase (Option) together with a cheque for the balance amount required for the exercise of Option |
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2. |
Original marriage certificate (if using CPF) |
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3. |
CPF statement (if using CPF) |
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4. |
Identity card (passport for foreigners) |
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5. |
Letter of offer from a financial institution if financing is required.
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| What should I do now?
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| A: |
Contact a MoneyMind Mortgage Advisor to meet up with you so that we can understand your needs, commitments and financial goals and work out a detailed financial plan for you.
If you would like to have more detailed information before seeing anyone, we have publishing a very informative book “HOUSING LOANS 101, Your Complete Guide” which is packed with valuable nuggets of mortgage related information for your housing loan needs compliments of MoneyMind. This book was written specifically to provide all home buyers like yourself with the full details pertaining to your housing loan, the processes, what FIs look into when approving a housing loan, the ins & outs of the whole buying process, right up to the solutions for problems that many are facing with the housing loans.
Buying property does not only entail the initial down payment but also the regular installments. Should you be unable to make the monthly installments due to unforeseen circumstances, your dream home would fast become your biggest nightmare.
With the government’s emphasis on the minimum sum at age 55 (currently at S$99,600 and to be increased to S$120,000 by year 2013), many home owners today are still unsure how it will impact them. With the way things are going, we anticipate that a lot of home owners will be caught in a dilemma in the near future.
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