Many people do not know that planning for a property purchase can take up to a year or more. Without proper planning, many people\u00a0are stuck after making the wrong move.<\/p>\n
Here are some common mistakes: –<\/p>\n
Buying a property before knowing your budget.<\/strong><\/p>\n The biggest hurdle when purchasing a property is usually the loan. Not many people I know have a million bucks floating around. Most people fail to get this right because they assume<\/em> they are able to obtain a loan.<\/p>\n Using the current LTV of 80% and TDSR of 60%, the income required to buy a $1m apartment ($800K loan over 30 years) is around $6K assuming\u00a0no other commitments. If you\u00a0have some credit cards and a car loan, this figure could easily balloon to $8K.<\/p>\n So what happens if you bought a new property and paid the 1% option-to-purchase (OTP) fee ($10K for a $1m property) and is unable to obtain a loan? The answer is simple: you’ll forfeit the 1% and the seller\u00a0can now throw a party.<\/p>\n Buying a new property before selling the current one.<\/strong><\/p>\n This is very common. What happens if you can’t sell your current property in time? You will be made to pay the additional 20% downpayment (your LTV is reduced to 60% from the original 80% you were expecting).<\/p>\n For those hoping to apply for an ABSD remission, sorry. It’s gone.<\/p>\n So why does a property purchase planning take up to a year?<\/strong><\/p>\n That’s because if you are unable to obtain\u00a0a loan (especially self-employed), it will take up to a year to get your year-end tax filings corrected. A typical loan approval-in-principal process can take up to one month. Then you’ll start selling your current property before buying a new one to avoid any of the pitfalls I mentioned above.<\/p>\n Happy house hunting.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Many people do not know that planning for a property purchase can take up to a year or more. Without proper planning, many people\u00a0are stuck after making the wrong move. Here are some common mistakes: – Buying a property before… Continue Reading →<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5],"tags":[490,491,489],"class_list":["post-2430","post","type-post","status-publish","format-standard","hentry","category-property","tag-absd","tag-ltv","tag-tdsr"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/tzlee.com\/blog\/wp-json\/wp\/v2\/posts\/2430","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tzlee.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tzlee.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tzlee.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/tzlee.com\/blog\/wp-json\/wp\/v2\/comments?post=2430"}],"version-history":[{"count":6,"href":"https:\/\/tzlee.com\/blog\/wp-json\/wp\/v2\/posts\/2430\/revisions"}],"predecessor-version":[{"id":2436,"href":"https:\/\/tzlee.com\/blog\/wp-json\/wp\/v2\/posts\/2430\/revisions\/2436"}],"wp:attachment":[{"href":"https:\/\/tzlee.com\/blog\/wp-json\/wp\/v2\/media?parent=2430"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tzlee.com\/blog\/wp-json\/wp\/v2\/categories?post=2430"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tzlee.com\/blog\/wp-json\/wp\/v2\/tags?post=2430"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}