We compiled a list of frequently asked questions that we’ve come across quite frequently. If you have any new questions, please feel free to contact us.
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Yes, absolutely. Your stamp duty is payable within 14 days upon exercising your Option to purchase or Sale and Purchase Agreement. While it may take a while for CPF Board to release your money to pay for your stamp duty, to avoid any late penalty charges, you may need to pay your stamp duty by cash first while your CPF money is release and reimbursed back to you.
Your CPF monies may also be used for your lump sum down payment, legal costs and mortgage stamping charges and subsequently monthly mortgage repayments.
Let’s use a real life example. Assuming your property is worth $1 million.
Depending on the financing quantum allowed by different banks, the maximum allowed by government regulation is up to 80% for your first property and up to 60% for your second and subsequent properties.
Assume that the bank allows up to a 60% Loan to Value (LTV) financing quantum, and you have used about $150,000 of your CPF money, then the draft numbers will work out to be as follows:Valuation = $1,000,000 60% LTV = $600,000 CPF Used = $150,000 Nett amount allowed for cash out term loan = $450,000
The maximum amount of loan allowed to cash out for your private property is about $450,000 subject to the bank’s approval. The above is an illustration for the computation of your cash out term loan amount. Different banks may have different approving loan quantum.
The progressive structure of a building under construction property (BUC) is broken into 8 stages of 10% 10% 5% 5% 5% 5% 25% (TOP) 15% (CSC).
Only interest is payable on the loan amount that has been disbursed. Your interest will be computed based on reducing balance. For a start, due to the small disbursed loan amount, you will probably be paying only a couple of hundred dollars for your mortgage but do note that your monthly repayment steps up when more of the principal loan is disbursed subsequently.
For an accurate planning on your finances, you should always assess your financial affordability based on repayment for the full loan amount on a higher interest rate tier of maybe say 2% -3%.
If you have a collateral like a property, banks will be more favourable to offer you financing facilities secured against the collateral of your property.
If your business had been in operation for a short while but now requires liquidity to purchase new raw material, obtaining trade finance facilities to finance the purchase of your raw materials may be a consideration.
If you have secured a few invoices while awaiting payments, banks may be able to offer you invoice factoring to improve your cash flow and allows you to quickly turn around your receivables and put your money back into your business.
If you are considering purchasing new machinery and equipments, a hire-purchase machinery & equipment loan may be more suitable. Given that machinery and equipment financing are a form of secured lending, you will be able to secure financing at a much lower interest rate cost as compared to an unsecured business term loan facility.
If you are a micro / small / medium enterprise with less than 10 CPF employees and would like to seek a small business funding of not more than $100,000, a micro loan facility may be suitable for you and your business.
If you’re seeking new business start-up funding, you may wish to consider approaching angels and venture capital companies. Alternatively, small finance houses and licensed money lenders may provide alternative financing solutions to meet your needs and objectives. Do note that lending cost may be higher as compared to banks and financial institutions.