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Private housing loan VS HDB loan

Kurty

By Kurty,
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Kurty

Kurty

Supercharged

Hello folks,

 

i know mcf a lot of gurus with rich expertise in wealth management, would like to seek some advice.

 

supposedly:

 

- 240k of loan, which will you go for? private or HDB? was told that private is as at 1.2% whileas HDB is at 2.6%.

 

- BTO, intend to sublet 2 units out as will be going malaysia for work. Any concern?

 

- the rental of 2 units will be used to fund the private loan installment.

 

- is it able to take more loan apart from the 240k? could use the extra for renovation and venture.

 

 

Due future, taking in as no CPF contribution.

Will come back once or twice a month.

 

 

please give your valuable thoughts, thanks

 

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Kurty

Kurty

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2.6%

 

:D

 

Why leh? Its twice of what u will be paying, should you be going for private.

 

Explan lah, bro. Don't give me 2.6, i also got. 0.02 somemore leh

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Cars08

Cars08

1st Gear

Hello folks,

 

i know mcf a lot of gurus with rich expertise in wealth management, would like to seek some advice.

 

supposedly:

 

- 240k of loan, which will you go for? private or HDB? was told that private is as at 1.2% whileas HDB is at 2.6%.

 

- BTO, intend to sublet 2 units out as will be going malaysia for work. Any concern?

 

- the rental of 2 units will be used to fund the private loan installment.

 

- is it able to take more loan apart from the 240k? could use the extra for renovation and venture.

 

 

Due future, taking in as no CPF contribution.

Will come back once or twice a month.

 

 

please give your valuable thoughts, thanks

 

Some ppl may say go for the cheaper one because it is cheaper...question is cheaper for how long...if u r paying that amount within 5 yrs, i think it is ok to go to the bank to pay less interest plus I think they usually package w some freebies...HDB loan nothing...

 

If u r taking 10-20 yrs, take HDB no need to think so hard... u locked in the interest rate for the next 20 yrs why not...also not all can qualify for HDB loan....

 

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Kurty

Kurty

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2.6% fixed for piece of mind

 

assuming 30 yr loan.... whoever can tell you what is the i/r is during these 30yrs is bs you...

 

I see, if i have cpf contribution, i would really settle for the loan. But due future, may not..

Hence every penny really matters.

 

I take into consideration, thanks.

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Vid

Vid

Hypersonic

Hello folks,

 

i know mcf a lot of gurus with rich expertise in wealth management, would like to seek some advice.

 

supposedly:

 

- 240k of loan, which will you go for? private or HDB? was told that private is as at 1.2% whileas HDB is at 2.6%.

 

- BTO, intend to sublet 2 units out as will be going malaysia for work. Any concern?

 

- the rental of 2 units will be used to fund the private loan installment.

 

- is it able to take more loan apart from the 240k? could use the extra for renovation and venture.

 

 

Due future, taking in as no CPF contribution.

Will come back once or twice a month.

 

 

please give your valuable thoughts, thanks

 

This should be a no brainer. Bank's interest rate is floating. HDB's is fixed. Unless you are so certain banks will not increase interest to more than 4% throughout the loan tenure or you taking short loan, then go for the bank. Otherwise, the 2.6% will be fixed all the way.

 

You mean rental of 2 rooms right? Ask HDB. They normally allow if you have valid reasons such as overseas work commitments. What you do with the money you get from the rental is up to you.

 

Taking more loan than the 240k is illegal. Don't try it. You can ask banks for renovation or personal loans.

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Kurty

Kurty

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This should be a no brainer. Bank's interest rate is floating. HDB's is fixed. Unless you are so certain banks will not increase interest to more than 4% throughout the loan tenure or you taking short loan, then go for the bank. Otherwise, the 2.6% will be fixed all the way.

 

You mean rental of 2 rooms right? Ask HDB. They normally allow if you have valid reasons such as overseas work commitments. What you do with the money you get from the rental is up to you.

 

Taking more loan than the 240k is illegal. Don't try it. You can ask banks for renovation or personal loans.

 

 

actually i feel that the banks rate will not exceed that much due to the current global uncertainty.

again, this is my gut feeling, better don't risk it.

 

2.6 no doubt is higher but true, i can take 30 years loan.

it shouldn't be that taxing if i were to use the rental to fund the loan.

 

renovation or personal loans interest are high, i actually thought of asking for some loans..

i do have ready cash but keeping in the bank as they meant for other purposes..

 

 

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inlinesix

inlinesix

Hypersonic

The super upside of HDB loan is that loan can be reduced without penalty. I borrowed $220k in 2004 for 20 yrs. Have been diligent to pay down the principal with CPF. Mortgage will end in 2014 or earlier. Interest saving is btw $10k - $15k.

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CH_CO

CH_CO

6th Gear
(edited)

Give me , i would recommend private if you have a stable income and only need the loan for liquidity purposes, else i would prefer to recommend CPF .

 

Reason is for any reason , if you lose your job and is unable to repay the amounts , you can adjust ur repayment lengths and another without any penalty. CPF also allows you to free up the cash as compared to you paying for private loan but in your case assuming if you don't have cpf contributions , it doesn't make much of a difference.

 

Anyway subletting , you have to report income for rental and i would seriously warn you of it , many kept quiet and hdb just kept quiet , it doesn't mean they don't know, just in case.

 

Things to take note :

 

1. Your returns on loan via rental : how much is your rental income ?

 

2. Your repayment period?

 

3. Assuming if you aren't able to find a tenant , how are you going to service the loan? Private loan , assuming if you aren't able to repay they take ur house. CPF , if you unable to repay , can talk to them they can do a deferred repayment. So think properly.

Edited by CH_CO
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Verve

Verve

1st Gear

there is a part of financial savvyness and wisdom beyond numbers , go think about it, and you will have your answer

 

some points to ponder

 

1) Upside

2) Downside

3) Worst Case scenario ? Can you handle it ?

 

In event of loan recall or margin call can you handle it

 

best of luck and best of blessings in either choice

 

PS: Count yourself lucky to have a choice of HDB Loan as well....

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Adrianlim13

Adrianlim13

2nd Gear

Hdb loan la.

 

Once u got no money to repay bank, they will kick u out of house in order to recoup their money. Hdb will not do that cos u will go mp therein kpkb .

 

So yes, be grateful that u have a choice of Hdb loan. Not all can.

 

Prviate loan = private housing .haha

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Myxilplix

Myxilplix

Turbocharged

At least you have the option. I'll be eligible to get a resale flat as a single soon, but don't qualify for hdb loan due to the income cap. So lan lan suck thumb gonna have to get bank loan.

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Kurty

Kurty

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My loan interest was 1.198% (7 Jun), 1.253% (7 Sep) and 1.090% (7 Dec). Hope it stays that way till 2015.

 

 

you mean the bank rates fluctuate every quarter? wow, if it stay this way and you are buying private, you would have made. [thumbsup]

 

 

The super upside of HDB loan is that loan can be reduced without penalty. I borrowed $220k in 2004 for 20 yrs. Have been diligent to pay down the principal with CPF. Mortgage will end in 2014 or earlier. Interest saving is btw $10k - $15k.

 

 

i see, 2.6% is really a lot and spread over 30 years.. that's the thing that keep bugging me.. [:|]

 

 

Give me , i would recommend private if you have a stable income and only need the loan for liquidity purposes, else i would prefer to recommend CPF .

 

Reason is for any reason , if you lose your job and is unable to repay the amounts , you can adjust ur repayment lengths and another without any penalty. CPF also allows you to free up the cash as compared to you paying for private loan but in your case assuming if you don't have cpf contributions , it doesn't make much of a difference.

 

Anyway subletting , you have to report income for rental and i would seriously warn you of it , many kept quiet and hdb just kept quiet , it doesn't mean they don't know, just in case.

 

Things to take note :

 

1. Your returns on loan via rental : how much is your rental income ?

 

2. Your repayment period?

 

3. Assuming if you aren't able to find a tenant , how are you going to service the loan? Private loan , assuming if you aren't able to repay they take ur house. CPF , if you unable to repay , can talk to them they can do a deferred repayment. So think properly.

 

 

bro, well said.

in due future, i got zero cpf contribution and with my petite saving, i intend to use it for my business venture hence this is really untouchable..

 

in answering your qn:

1. 2 room rental is around $1200, i have checked. location is just beside MRT & bus interchange with amenities and school nearby.

 

2. payment period, i'm looking at 30 years. reason, if my venture don't do well, i could use the rental to support.

I will be renting out another room at my dad's place, which is my current room - $500.

 

3. yes, that's one of the factors that i'm considering too, new estate and with such high rental, it might actually dampen tenant.

i did google, in the event of default, CPF is still willing to give allowance and grace.

 

Thank you.

 

 

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Kurty

Kurty

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there is a part of financial savvyness and wisdom beyond numbers , go think about it, and you will have your answer

 

some points to ponder

 

1) Upside

2) Downside

3) Worst Case scenario ? Can you handle it ?

 

In event of loan recall or margin call can you handle it

 

best of luck and best of blessings in either choice

 

PS: Count yourself lucky to have a choice of HDB Loan as well....

 

 

pardon my ignorance, i thought everyone is entitled to HDB loan as long you are buying one unit from there or as a first timer?

 

 

Hdb loan la.

 

Once u got no money to repay bank, they will kick u out of house in order to recoup their money. Hdb will not do that cos u will go mp therein kpkb .

 

So yes, be grateful that u have a choice of Hdb loan. Not all can.

 

Prviate loan = private housing .haha

 

 

haha, yeah. thanks [laugh]

 

 

At least you have the option. I'll be eligible to get a resale flat as a single soon, but don't qualify for hdb loan due to the income cap. So lan lan suck thumb gonna have to get bank loan.

 

 

i see, well. this show that you are rich and well to do, unlike me.

anyway, good luck to your singlehood, all the best ^_^

 

 

Anything less than 10, take private. More than 10, hdb

 

 

i guess private is really for private purchase whereby you see the potential and makes.

not for me, this flat comes a long way for me and till date, it's never easy to obtain it.

hence, i will value it. ^_^

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