Wednesday, June 5, 2019

Dividend Warrior's 2nd Pot Of Gold Series - BTO Flat Downpayment

Yesterday, I attended an appointment at Toa Payoh HDB Hub and settled the downpayment for my HDB BTO flat using my CPF OA savings. I also paid the 'Buyer's Stamp Duty' as well as conveyancing fees. This is another step closer to owning my first residential property on this lovely tropical island. My second pot of gold! 



  • The entire process took roughly 15 to 20 minutes. Not much verification of documents involved. The important thing is to remember your HDB Portal and CPF log-in passwords and bring along your smartphone/OneKey token. You are required to log into the HDB Portal on-the-spot to complete the transaction. 
  • The HDB staff informed me that the key collection date should be in March/April 2023 tentatively. Could be earlier depending on the construction progress of the main contractor.
  • The HDB staff also provided guidance on the home financing matters. She advised me to pay for my flat in full when I collect the keys 4 years later. Right now, after settling the downpayment, there is around $126k left in my CPF OA. Over the next 4 years, my CPF OA savings would continue to earn 2.5% interest annually and I would keep contributing to my CPF OA through my full-time job. All these add up. By 2023, my CPF OA savings should exceed $150k, so I do not need a housing loan. Buying a new flat, but staying debt-free. How awesome is that! To all my foreign readers out there, the public housing system in Singapore is pretty sweet right?  (>_<)
  • The $500 option fee which I paid during my flat-booking appointment back in April would be reimbursed to my bank account. 
  • After settling the downpayment, I was told to visit the SP Group counter/booth to find out more about the 'Centralised Cooling System'. This is a pilot project. The SP Group representative explained that chiller units would be built on the roof-tops of each HDB block, and the chilled air would then be piped into our flats. There is no need to do maintenance on individual condenser units because there aren't any. This is the main selling point for me. My parents had to change the faulty condenser unit in their old flat numerous times over the last 20 years. That was rather costly and troublesome. In terms of pricing, the representative candidly stated that it should be cheaper than conventional air-con, 'otherwise nobody will sign up' (his own words).

9 comments:

SS said...

Hello DW,

How much is the expected monthly cost for centralized cooling?

Ben said...

Hi DW,

I believe that your BTO is 2 rm-flat flex. Cograts to your new flat ownership.

Ben

javier said...

Hi DW,

when you mention 7.3k as cash, is this your entire cash amt (reserve+emergency) or the amt that you allocated for investing?

Dividend Warrior said...

Hi SS,

The detailed pricing is not out yet. The SP representative just told me that in general, average pricing should be lower than the conventional residential air-con.
I guess the electrical bill depends on how much a household use?

Dividend Warrior said...

Hi Ben,

Thanks for the support! :)

Dividend Warrior said...

Hi javier,

This $7.3k is funds earmarked solely for investment purposes.
My emergency fund is separate, equal to 1-year expenses.

javier said...

Thanks for the response DW, perhaps that amt is just nice for the upcoming astrea v bonds?

FrugalSingaporeGirl said...

Thanks for this blog. I used to read you many years ago (in those days when there was still Google Reader) along with other local personal finance blogs, stopped reading blogs altogether. Recently my interest in the local blogging scene resumed and I was browsing online when I became re-acquainted with your blog again. I am truly amazed and impressed that you are still around! You are the living proof of tenacity and persistence! 9 years!

But nothing would have made me attempt to contact you if you had not blogged about 2-room HDB flat. You reminded me of someone I knew in real life - but I would not have asked him all these questions EXACTLY because of real life -

1) Why do you ever think that 2 room flat would make an ideal living environment, even if it is for single living? It is simply too crammed. I am not being a snob - by saying this I am in fact being supremely neutral and objective. Physically, 45M2 is just tiny. Can you describe the kind of life you intend to carry out with a 2 room flat ownership. Do you intend to use it just as a sleeping station, and spend the most of your waking hours working and playing outside?

2) 2 room flat is ARGUABLY not the best type of investment from an investment standpoint. I fully acknowledge that one may choose to view such a flat purchase as a pure expenditure such that all consideration of capital appreciation is completely irrelevant. If you bought a three room flat, it would have a higher resale potential than a 2 room flat. I am familiar all the reasonings on both sides of the argument, I would just like to hear you articulate it from your circumstance.

3) I am full of respect for how you built up a portfolio of $550,000, especially in view that your starting pay was just S$3,000 about 10 years ago. Your savings rate must be formidable. But, even at a starting pay of S$3,000, by now your income should have exceeded the threshold of S$6,000 for BTO application under Singles' Scheme. Since you are very open about your net assets on this blog, could you also comment about your salary?

Or did you do something very drastic/dramatic in order to qualify for the BTO? I have ever heard of stories about how people quit their > S$6,000 jobs and downgrade to a lower pay for one year's duration, in order to qualify for the BTO. They say that after weighing their options and their peculiar set of circumstance, such a measure makes more financial sense. Are you one of this group of people?

Thanks for answering. If you find that it affords more confidentiality, you could direct the answers to me on my email. In any case, thanks for reading my comment.







JL said...

Hi. I like to discuss on the full payment of HDB via cpf when you collect the keys in near future.
Does this mean the full amount is subjected to accured interest along the way till you sell it after mop?
I am keen to you know ifmore
reply frugal girl.

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