Step-by-Step Guide to Buying Your First BTO Flat
For most Singaporean couples, applying for a BTO would be the next major milestone that they would be taking together as they are one step closer to their dream home, living together, building a family. Hence, it would be a life changing moment once the both of you have decided to take this big step which requires plenty of consideration from both parties as this is a long term commitment that both should take into serious consideration.
“BTO; also known as Build-To-Order, is whereyou pre-select the unit of a specificHDB development project and purchase it before it is being built.”
There are several BTO developments launchesavailable around Singapore currently and you should make your decision wiselyas the unit will only be ready around 2 to 3 years typically. Here is a step by step guide that will provide first time Singaporeancouples better clarity when it comes to buying theirfirst BTO Flat.
#1 Step: Eligibility Status
Eligibility status is important as not everyone is suitable to apply for a BTO especially if they are high income earners. In order to be eligible to purchase a BTO unit, you have to fulfill the following requirements:
- You or your partner has to be a Singaporean citizen, or PR as a family nucleus which can either be parents and siblings, spouse and children, or children that is under legal custody (applicable to widowed or divorced applicants only)
- ROM certificate has to be presented and BTO has to be applied with spouse
- If you are single, you have to be at least 35 years of age to apply (eligible only for 2 room flats in non-maturing estates)
- If you are a Singapore citizen applying with a non-citizen on a working pass or visit pass (eligible only for 2 room flats in non-maturing estates)
Do also keep in mind that different incomes group will be eligible for different BTO unittypes so if you are a high income earner surpassinga certain amount, you will not be eligible as you are well able to afford aprivate property or condominium whereas this slot can be given to anothercouple that would need it more than you do. Applicants CANNOT own any other property be it private or HDB, elseit has to be either sold away or transferred out within 30 months of yourapplication which might lengthen and complicate the whole process.
#2 Step: Balloting of your Desired BTO development
Balloting is like drawing lots, depending on several factors that might encompass the whole BTO development itself, certain BTO projects will definitely be more popular and higher in demand as compared to others. Being a first timer does not constitute or guarantee you a successful slot for that particular BTO project. The above will be an accurate depiction of the number of chances a typical Singaporean couple would be entitled to.
#3 Step: HDB Loan Eligibility (HLE) / Approval in Principle (AIP)
Every couple would have to decide betweentaking up with either the HDB or bank totake up a loan to finance the remaining balance of their BTO unit.Do make some comparisons and conduct prior research, the pros and cons of taking up a loan with HDB or the bank would bemore appropriate in your situation. For those who are taking a loan with the HDB, you have to obtain the HLE letteras a form of approval to finance your remaining amount. Whereas for those whochose to take up their loans with a third party bank, they would have to obtainan AIP letter as a prove of how much the bank will be loaning you.
#4 Step: Selection of BTO Unit
Depending on your queue number that is being allocated to you based on priority, depending on the proximity of your queue number to the number of people alloted to the BTO project, if your number far surpasses the total number of units available, chances are quite slim and you would have to try again.
Upon successfully being allocated a BTO unit, you have to choose between a 2-room flat, 3-room flat, or a 4 or 5-room flat or an executive flat.
Above is a one time option fee that you have to pay upfront to “book” thedesired HDB room type. If you would also like to apply for any further CPF housing grants, youmay proceed to complete this form and bring it along with you during theapplication process.
#5 Step: Signing of the Leasing Agreement
The leasing agreement has to be signed within 4 months prior to the booking of the BTO. Within this time frame, you have to settle the loan financing either coming from HDB or the bank. Upon signing of the lease agreement form, you will have to make the following payments upfront:
- Stamp duty
- Downpayment of the BTO unit
- Legal fees
Your down payment amount will vary depending if you were to take up your loan with the HDB or any other banks.
Payment Scheme for your BTO unit
In an ideal situation, Singaporean couples should take up their loan with the HDB as you are not required to fork out an heavier upfront which might pose a challenge to some couples and furthermore, you are able to tap into your CPF when you need not make any cash payments on the spot.
Buyer Stamp Duty
These are the rates for the stamp duty and would be in accordance to the price of your BTO unit.
Staggered Downpayment Scheme
Couples may also seek to apply a staggered downpayment scheme whereyou are able to stagger and delay making the downpayment which is being splitinto separate payments which might come in handy as every single cent countsduring this stage.
#6 Step: Key Collection of BTO Unit
Upon completing of the previous 5 steps, you are that much closer to seeing your new BTO unit soon. What you can do now is to wait for HDB to notify you of the collection date for your keys and you are all good to start designing and moving in your house. While waiting for them to notify you of the key collection date, you can start making arrangements if you are engaging any interior designers or if you would like to design your own home yourself. Prior arrangements and plans can be made so that when the day arrives for you to collect your keys, you would waste no time at all.
Some Useful BTO hacks for ALL Singaporean couples when choosing the location of your BTO unit
- Go for BTO developments that are nearer to:
- Either parents/in-laws in case of emergency
- Public transport/MRT stations
- Shopping malls
- If it is beside any highways which is convenient for drivers
- For those who do not drive, highways and major traffic junctions which might have high noise levels
- Is it within walking distance to any 24 hour coffee shops, supermarkets or minimarts
- For those who are superstitious – you may proceed to the actual site of the development or find out more info about the previous properties, what is around it, or how is the architecture being built and where is it facing etc
Getting a BTO flat with your significant otheris an important decision that should be discussed multiple times as this is along-term commitment that both of you have to work together as a team toshoulder on this responsibility. Upon forking out that downpayment there is no turning back or backing out as the money that isbeing paid towards the purchase of your BTO unitwill be forfeited and your chances will not be that high as compared to thefirst timers if you were to re-apply for another BTO with the next partner.Else, do check with the HDB site on a regular basis to keep yourself updated with anynew BTO launch or any BTO related news.