REF: Residential

Metta Lee
Mind Map by Metta Lee, updated more than 1 year ago
Metta Lee
Created by Metta Lee almost 6 years ago
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For revision for common test

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REF: Residential
1 Cost of ownership
1.1 stamp duty (provided)
1.1.1 Buyer's stamp duty
1.1.1.1 For properties above $360,000
1.1.1.1.1 Take (AMT X 3%)-$5400
1.1.2 Additional Buyer's stamp duty
1.1.2.1 For everyone except 1st time Singaporeans
1.1.3 Seller's Stamp duty
1.1.3.1 Industrial
1.1.3.2 Residential
1.1.3.2.1 sold w/in 1 year
1.1.3.2.1.1 means yr 0 to yr 1
1.1.4 *Always use the higher of purchase price or valuation
1.2 NOT IN CT
1.2.1 Purchase Price
1.2.2 GST
1.2.3 Property Tax
1.2.4 Legal and Conveyance Fees
1.2.5 Agency Fee/Commission
1.2.6 Valuation
1.2.7 Legal Requisitions
1.2.8 Operating costs
1.2.8.1 AKA Conservacy fee in HDB
2 Calculations :)
2.1 HDB Concessionary Loans
2.1.1 LTV
2.1.1.1 90%
2.1.1.1.1 of mkt value or vln
2.1.1.1.1.1 whichever lower
2.1.2 Loan interest
2.1.2.1 2.6%/annum
2.1.2.1.1 0.0021667/mth
2.1.3 MSR
2.1.3.1 installment cannot exceed 30% of buyer's income
2.1.4 Maximum repayment period
2.1.4.1 shorter of
2.1.4.1.1 a) 25 yrs
2.1.4.1.2 b) 65yrs - average age of buyers
2.1.4.1.3 if pty <60 yrs
2.1.4.1.3.1 c) balance lease - 20yrs
2.1.5 Maximum Loan Quantum
2.1.5.1 Lowest of
2.1.5.1.1 A) Loan ceiling = LTV X VL
2.1.5.1.1.1 90% x VL
2.1.5.1.2 B) VL - CPF in OA - CPF Grants - Half of proceeds*
2.1.5.1.2.1 If half of proceeds <$25,000
2.1.5.1.2.1.1 use
2.1.5.1.2.1.1.1 Total proceeds -$25,000
2.1.5.1.3 c) Loan required
2.1.5.1.3.1 is PVOA
2.1.5.1.3.1.1 i
2.1.5.1.3.1.1.1 0.0021667/mth
2.1.5.1.3.1.2 N
2.1.5.1.3.1.2.1 Maximum repayment period (in mths)
2.1.5.1.3.1.3 p
2.1.5.1.3.1.3.1 MSR
2.1.5.2 aka principal sum
2.2 Residential Housing/Bank Loans
2.2.1 LTV
2.2.1.1 see table provided
2.2.1.1.1 BTW
2.2.1.1.1.1 AVG age is income weighted
2.2.1.1.1.1.1 That means that eg. Alex (27 yrs $2000) and Bec (24 yrs $4000) The age will be calculated as [(2000/6000)x27yrs] + [(4000/6000)x24yrs] = 25 years
2.2.2 Loan interest
2.2.2.1 provided in Q
2.2.2.1.1 BUT
2.2.2.1.1.1 when calculating MAX loan quantum, use 3.5% or provided %, whichever is higher
2.2.3 TDSR
2.2.3.1 total debt servicing ratio
2.2.3.1.1 BY MAS
2.2.3.2 60% of buyer's income
2.2.3.3 IMPORTANT features
2.2.3.3.1 income weighted avg age
2.2.3.3.2 medium term interest rate (calc max loan)
2.2.3.3.2.1 For residential
2.2.3.3.2.1.1 3.5% or higher
2.2.3.3.2.2 For non-resi
2.2.3.3.2.2.1 4.5 % or higher
2.2.3.3.3 FI to discount 30% of buyer variable income
2.2.3.3.4 Bank loan for HDB
2.2.3.3.4.1 MSR of 30% to be CAPPED
2.2.3.3.4.1.1 don't enjoy TDSR for HDB bank loan
2.2.4 Maximum repayment period
2.2.4.1 Absolute at 35 years
2.2.4.2 loan period will be provided in Q :)
2.2.5 may be asked
2.2.5.1 Amount that must be paid in cash?
2.2.5.1.1 COV + MCP
2.2.5.2 Loan quantum
2.2.5.2.1 Principal Amt aka PVAO
2.2.5.3 Monthly installment
2.2.5.3.1 FVAO / N
2.2.5.4 Max loan quantum
2.2.5.4.1 similar to HDB loan A) and C)
2.2.5.5 Borrowing costs
2.2.5.5.1 FVOA - PVOA
2.2.5.6 Outstanding loan
2.2.5.6.1 PVOA of remaining years
2.2.5.6.1.1 PVOA but n = remaining yrs
2.2.5.7 Debt service ratio (%)
2.2.5.7.1 borrowing cost/loan amt
3 Terminology
3.1 Valuation Limit (VL)
3.1.1 The lower of the valuation and the purchase price

Annotations:

  • Please note that the purchase price MAY be lower at times
3.2 Cash over Valuation (COV)
3.2.1 Purchase price - valuation limit
3.2.2 Amount to be paid in cash when purchasing
3.3 Minimum Cash Payment (MCP)
3.3.1 Fixed % to pay in cash
3.3.1.1 not covered by bank loan
3.3.2 TABLE NOT IN EXAM
3.4 Loan Ceiling
3.4.1 LTV x VL
3.4.2 Maximum amt allowed to borrow
3.4.3 Table provided in exam
4 6 Functions of $1
4.1 For REF
4.1.1 We need to know 4
4.1.1.1 PVOA
4.1.1.1.1 Find PV given annuity
4.1.1.1.1.1 can work backwards to find annuity given pv
4.1.1.2 FVOA
4.1.1.2.1 Find FV given Annuity
4.1.1.3 FV = P x (1 + i)^n
4.1.1.4 To find when installments at end of month
4.1.1.4.1 PVAD
4.1.1.4.1.1 PVOA x (1+i)
4.1.1.4.2 FVAD
4.1.1.4.2.1 FVOA x (1+i)
5 FUN FACT: No theory Q in EXAMS!!
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