Resale Condo Payment Plan: Everything You Need to Know

Resale condos are a popular option for those looking to buy a home in Singapore. Unlike new launch condos, resale condos are ready for occupancy and offer a wider range of options in terms of location, size, and layout. However, one of the most significant differences between the two is the payment plan.

When it comes to payment plans for resale condos, the process typically involves several stages, including the grant of option, exercise of option, Buyer’s Stamp Duty, legal fees, valuation fee, and final completion of the sale and purchase transaction at the lawyer’s office. Buyers will need to plan their upfront payments and finances accordingly and pay a booking fee of 1% to obtain the Option to Purchase (OTP) from the seller.

It is important to note that the payment plan for resale condos differs from that of new launch condos. Unlike developers, sellers of resale properties want/need your money much more quickly. Therefore, buyers should be prepared to make the necessary payments promptly to secure the property. Understanding the payment plan for resale condos is crucial for anyone looking to purchase a home in Singapore and can help ensure a smooth and successful transaction.

Understanding the Resale Condo Market

When it comes to buying a resale condo, there are a few things that potential buyers need to keep in mind. In this section, we will explore the resale condo market in Singapore and provide some tips on how to navigate it.

Comparing Resale and New Launch Condos

One of the main differences between resale and new launch condos is the payment plan. With new launch condos, buyers typically pay a deposit upfront and then make progressive payments as the development progresses. On the other hand, resale condos usually require a lump sum payment upfront.

Another key difference is the pricing. New launch condos are usually priced higher than resale condos because they come with brand new fixtures and fittings. Resale condos, on the other hand, are priced based on their age, location, and condition.

Assessing Resale Condo Values

When considering a resale condo purchase, it is important to assess the value of the property. One way to do this is to look at the total debt servicing ratio (TDSR) of the property. The TDSR is a measure of the borrower’s ability to repay the loan, and it takes into account all of the borrower’s debts, including the mortgage.

Another important factor to consider is the option to purchase (OTP). The OTP is a legal document that gives the buyer the right to purchase the property at a certain price within a certain period of time. It is important to read the OTP carefully and understand the terms and conditions before signing it.

Finally, buyers should also be aware of the stamp duty and other fees associated with buying a resale condo. These fees can add up quickly, so it is important to factor them into the overall cost of the property.

In conclusion, the resale condo market in Singapore is active and diverse, offering numerous options for potential buyers. By comparing resale and new launch condos and assessing the value of the property, buyers can make informed decisions and find the right property for their needs.

New Launch Condo Payment Schedule

When purchasing a new launch condominium in Singapore, buyers follow a structured payment schedule known as the Progressive Payment Scheme (PPS). This scheme allows payments to be made in stages, aligned with the construction milestones of the property. The PPS is a manageable way to finance a new launch condo purchase, allowing buyers to plan their finances effectively and avoid the burden of paying the full amount upfront.

The typical payment schedule for a new launch condo is as follows:

Progressive Payment Schedule

1. Booking Fee (Option to Purchase): 5% of the purchase price, payable in cash on Day 1.
2. Signing of Sale & Purchase Agreement (S&P): 20% of the purchase price (less the booking fee), payable in cash or CPF Ordinary Account (OA) within 8 weeks from the date of the Option to Purchase.
3. Completion of Foundation Work: 10% of the purchase price, payable in cash or CPF OA.
4. Completion of Reinforced Concrete Framework: 10% of the purchase price, payable via bank loan.
5. Completion of Brick Walls: 5% of the purchase price, payable via bank loan.
6. Completion of Ceiling/Roofing: 5% of the purchase price, payable via bank loan.
7. Completion of Doors & Windows Frames, Electrical Wiring, Plumbing, and Internal Plastering: 5% of the purchase price, payable via bank loan.
8. Completion of Car Park, Roads, and Drains: 5% of the purchase price, payable via bank loan.
9. Obtaining Temporary Occupation Permit (TOP): 25% of the purchase price, payable via bank loan.
10. Upon Production of the Certificate of Statutory Completion (CSC): 15% of the purchase price, payable via bank loan.

It is important to note that buyers may be required to pay additional costs such as legal fees, stamp duties, and valuation fees. Legal fees are typically around S$3,000 and payable in cash or CPF OA. Stamp duties, including Buyer’s Stamp Duty (BSD) and Additional Buyer’s Stamp Duty (ABSD) if applicable, are payable within two weeks of signing the S&P Agreement and can be paid using cash or CPF OA. The valuation fee is approximately S$350 and payable in cash or CPF OA.

Buyers can manage their loan repayments in conjunction with the PPS by coordinating with their financial institution to ensure necessary funding is available at each stage. It is crucial to maintain a good credit history and provide the necessary documents for loan approval.

CPF Ordinary Account savings can be used to pay for the downpayment, stamp duties, and home loan installments. Depending on the law firm, legal fees may also be payable using CPF.

The Resale Condo Payment Process

When it comes to buying a resale condo, understanding the payment process is crucial. The process involves several initial costs, calculating down payment requirements, navigating the Option to Purchase (OTP), and following the condo progressive payment timeline.

Initial Costs: Booking and Option Fees

The first step in the payment process is paying the booking fee, which is usually 1% of the purchase price. This fee is paid to the seller to secure the unit and obtain the Option to Purchase (OTP). The OTP is a legal agreement that gives the buyer the right to purchase the unit within a specified period, usually 14 days.

After obtaining the OTP, the buyer needs to pay the option fee, which is usually 4% of the purchase price. This fee is paid to the seller and is non-refundable.

Calculating Down Payment Requirements

The next step in the payment process is calculating the down payment requirements. The down payment for a resale condo is usually 20% of the purchase price. This includes the booking fee and the option fee.

Navigating the Option to Purchase (OTP)

The OTP is a critical document in the resale condo payment process. It outlines the terms and conditions of the sale, including the purchase price, payment schedule, and completion date. The buyer needs to carefully review and understand the OTP before signing it.

Condo Progressive Payment Timeline

The condo progressive payment timeline is a payment schedule that outlines the payment milestones for the purchase of a resale condo. The payment milestones typically include the booking fee, option fee, down payment, and the final payment upon completion. The payment schedule is usually structured to coincide with the completion of the construction of the unit.

In conclusion, understanding the resale condo payment process is crucial when buying a resale condo in Singapore. Buyers need to be aware of the initial costs, down payment requirements, navigating the Option to Purchase (OTP), and following the condo progressive payment timeline. By understanding the payment process, buyers can make informed decisions and avoid any financial pitfalls.

Securing Financing for Your Resale Condo

When it comes to purchasing a resale condo, securing financing is a crucial step. Buyers need to understand the different home loan options available to them and how to manage their monthly instalments. This section will explore some of the key considerations when securing financing for your resale condo.

Exploring Home Loan Options

There are several home loan options available for buyers looking to finance their resale condo purchase. These include:

• Fixed Rate Home Loan: This type of loan has a fixed interest rate for a specific period, usually between one to five years. This means that the monthly instalments remain the same throughout the fixed period, providing certainty and predictability to buyers.
• Floating Rate Home Loan: This type of loan has an interest rate that fluctuates based on market conditions. This means that the monthly instalments can go up or down depending on the prevailing interest rates.
• Combination Home Loan: This type of loan combines both fixed and floating interest rates. This provides buyers with some flexibility, as they can choose to fix a portion of their loan while keeping the rest floating.

Before choosing a home loan option, buyers should consider their budget, financial goals, and risk tolerance. They should also shop around and compare different loan packages offered by various banks to find the best deal.

Understanding Interest Rates and Instalments

When securing financing for a resale condo, buyers need to understand how interest rates and instalments work. Interest rates are the cost of borrowing money and are expressed as a percentage. The interest rate charged by the bank will affect the monthly instalments that the buyer needs to pay.

Buyers should also be aware of the different types of instalments, such as principal and interest, interest-only, and deferred instalments. Principal and interest instalments involve paying a portion of the principal amount borrowed and the interest charged on that amount. Interest-only instalments involve paying only the interest charged on the principal amount borrowed. Deferred instalments involve delaying the payment of instalments for a specific period, usually at the start of the loan tenure.

Buyers should calculate their monthly instalments based on their loan amount, interest rate, and loan tenure. They should also factor in any other expenses, such as property taxes, insurance, and maintenance fees, to ensure that they can afford the monthly payments.

In conclusion, securing financing for a resale condo requires careful consideration of the different home loan options available and an understanding of how interest rates and instalments work. Buyers should take the time to research and compare different loan packages offered by banks and calculate their monthly instalments to ensure that they can manage their finances effectively.

Finalizing Your Purchase

Once you have found the perfect resale condo and secured financing, it is time to finalize your purchase. This section will cover the necessary steps to complete your transaction and take ownership of your new property.

The Progressive Payment Scheme

The Progressive Payment Scheme is a standard payment plan for purchasing a resale condo in Singapore. It involves making payments to the seller at various stages of the transaction, as outlined in the table below.

It is important to note that the payment percentages may vary depending on the specific terms of your transaction.

Obtaining Necessary Certifications

Before you can take ownership of your resale condo, you must obtain the necessary certifications from the relevant authorities. The two main certifications required are the Certificate of Statutory Completion (CSC) and the Temporary Occupation Permit (TOP).

The Certificate of Statutory Completion (CSC) confirms that the building has been completed in accordance with the approved plans and meets all relevant building codes and regulations. It is issued by the Building and Construction Authority (BCA) and is required before you can legally occupy your condo.

The Temporary Occupation Permit (TOP) is issued by the Building and Construction Authority (BCA) and allows you to occupy your condo while waiting for the CSC to be issued. It is typically issued when the building is deemed to be structurally safe and suitable for occupation.

In summary, finalizing your purchase of a resale condo in Singapore involves following the Progressive Payment Scheme and obtaining the necessary certifications, such as the Certificate of Statutory Completion and Temporary Occupation Permit. By understanding these requirements and working with a trusted real estate agent or lawyer, you can ensure a smooth and successful transaction.