Complete guide to buying your first BTO flat

Purchasing your first ever BTO is a significant milestone especially for young Singaporean & Malaysian adults. Planning to buy a BTO and step into another milestone in life? But often think to yourself “how and where do I get started?”. 

You often hear about people complaining about the tedious work and process they go through to get a BTO flat. Fret not, keep on reading to find out how you can apply for a BTO smoothly with lesser tedious work by reading this step by step process guideline.  

1. Communicate with your partner

This is an important element that most people missed out on. As we know that you need to have a partner before you can apply for a BTO, make sure you communicate with your partner before making such big decision. You certainly do not want to end up not getting married in the end and have your down payment wasted after that. 

Apart from that, you will also need to have sit down with your partner and consider on the types of unit that you require, such as a 3 bedrooms BTO, a 4 bedrooms BTO or a 5 bedrooms BTO. Make sure your partner and you plan ahead as the BTO will be ready in approximately 3 years. Therefore, your partner and you might need discuss on your future plan and start thinking of the size of unit that you require. For example, a 3 bedrooms unit will be too small for you if you plan to have 2 children in the future or a 5 bedrooms unit sound better if you plan to have your parents to stay with your family. 

Location plays an important factor in deciding as well. You certainly do not want to spend 2 hours daily on commuting to work. Same goes to your children’s school. Hence, you should apply for a BTO that is near to your workplace so you can save on transportation and also you will have that extra 15 minutes before you prepare for work. 

After all, it is a big commitment. Do communicate with your partner to prevent making the wrong decision. Also, communication prevents major fights in the future between your partner and you. 

2. Upcoming sales launch

Normally, HDB will post any upcoming launch on the HDB website. Do check from time to time so you do not miss out on anything. You will be able to check out the details such as the location available and types of flat. Other than the location and types of unit, the rest will have to wait until the next launch. In addition, checking out on all these details will allow you to shortlist the type of unit and location that you are interested in applying as application is only opened for a week. You do not want to make any rush decision on such important thing.

3. Sales launch – HDB loan & down payment

After meeting the eligibility, you can now move on to applying a HDB home loan. In order to be eligible for securing a HDB home loan, these are the few criteria you need to meet. First of all, you are planning to apply for a HDB flat. Secondly, you are a citizen of Singapore and aged 21 years and above. Your total monthly income is lesser than $12,000 or $18,000 if you are applying for a HDB flat for extended families. In addition, you must not own or previously owned any properties that are private in the past 30 months prior to the application of HDB loan. You must not have more than a hawker or market stall or an industrial property or commercial property, unless you are working in the market or hawker stall yourself.  The total loan amount that will be approved depends on your joint income when your flat is ready. 

As for the down payment,it would be a 10% of the property selling price if you are taking a HDB house loan. The 10% downpayment, however, can be paid by using your CPF account. As for applicants using bank loan, you will then need to pay a 20% down payment, with 5% minimum being paid in cash. 

As a rule of thumb, buy within your means and only what you can afford as you do not want to fall into financial debt. For example, you should not buy a flat that costs more than $300,000 if your monthly income is $5,000. It is suggested that you do not buy a flat with a price that cost more that your gross combined salary of 5 years, although most people would say that their salaries would have increased by then, there is still a risk involved. 

4. Schemes available

As for the Additional Housing Grant (AHG), it is a scheme that aims to help Singaporeans with lower income to purchase their first flat with grant ranging from $5,000 to $40,000, subject to buyer’s income as well. To qualify for an AHG grant, your household income should not exceed $5,000 per month, for a period of 12 months before your application for the flat.

There are also other schemes available such as the Special Housing Grant (SHG) that you can check out on HDB website.

5. Application
After the sales launch, you are finally at the last step - application. The application will only last 1 week and by then you should already know which location and what type of unit you prefer and you can only apply to one location and unit type. There is a one week application period whenever the BTO is launched. The indicative prices and preliminary designs will be made available to the public during the beginning of the week. After viewing the designs and prices, you can start apply within the week itself via online, HDB Hub or any HDB branches. The application works in a balloting way, somewhat similar to a “lucky draw”, to decide what kind of BTO you will get in the end. A $10 non refundable administration fee will be charged at this stage as well.  

After application and securing a home loan, You will then be asked for a meeting to make a booking of your desired flat in approximately 1 or 2 weeks after getting the notification of your success application.

In conclusion, the steps to getting a BTO unit is not that tedious after all, provided you follow the guide and plan ahead to avoid going through the unnecessary issues. You can understand more on the process of getting a HDB flat by reading step by step guide to buying your first BTO flat and guide to buying a new HDB flat. 

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