As exciting as the acquisition of a new flat is going to be, the process could also be considered terrifying in more than one way. This is one of the biggest decisions you’ll make in your life. Hence, you have to be 100 per cent confident in your choice and your ability to secure funding.
If you’ve never gone through the HDB BTO flat buying procedure before, you probably have a ton of question about the steps you’ll need to go through. The following guide will give you a detailed overview and some practical pointers to count on during every step of the way.
A Summary of BTO Flat Buying Steps
Before checking out each one of the steps in detail, here’s a quick overview of the entire BTO flat buying process:
- Step 1: check your eligibility since each kind of HDB flat comes with certain requirements potential owners have to fulfill
- Step 2: do some research on upcoming BTO launches and shortlist the flats that you’re interested in (upcoming BTO launches are announced six months in advance, giving you enough time to check out the details)
- Step 3: ballot for a flat online – this is the actual application process and you have seven days from the BTO release to figure out if you’d like to apply
- Step 4: ensure your eligibility for an HDB or a bank loan
- Step 5: schedule an appointment with the HDB to select your unit
- Step 6: schedule another HDB appointment to make your downpayment and sign your lease agreement
- Step 7: collect your keys and feel proud about the fact that you’re now an HDB BTO flat owner
Step 1: HDB Eligibility Requirements Check
HDB has a number of criteria for potential homeowners to meet before applying for anything. Hence, before moving on to the other steps, make sure that you qualify for the BTO flat program.
You can find out more about the eligibility requirements by visiting the official HDB website. A few of the most important criteria that HDB will examine to determine your eligibility include the following:
- Citizenship: to become a BTO flat owner, you need to be a Singaporean citizen. If you have a co-applicant for the property, the same condition will apply to them. Permanent residents are also eligible for BTO flat acquisition.
- Age: at the time you apply for a brand new BTO flat, you have to be aged 21 or older.
- Marital status: if you’re applying with your fiancé, you’ll need to register your marriage before coming in BTO flat possession. This criterion falls under the HDB fiancé scheme. If you’re a single person, you’ll be eligible for a two-room flat in a non-mature estate. If you’re a single applicant over the age of 25, you can qualify for a two-room flat in a non-mature estate but you can have up to three single co-applicants.
- Income ceiling: the income ceiling for a two-room flexi or a three-room flat is 7,000 dollars or 14,000 dollars for short-lease properties. For four-room and bigger BTO properties, the income ceiling is 14,000 dollars but can be extended to 21,000 dollars if you are buying as an extended or multi-generation family.
- Property ownership requirements: to qualify for a BTO flat, you’ll have to prove that you don’t own any property in Singapore or overseas. People who own property will have to dispose of their current flat at least 30 months before applying for a brand new BTO home.
Step 2: Research of Upcoming BTO Launches
For many, this is the most exciting part of the process, as it will determine the characteristics of the brand new home that’s going to be bought eventually.
Upcoming sales launches are announced via the HDB website. You should check it regularly to access new information as soon as it becomes available.
As already mentioned, upcoming BTO launches are announced six months in advance, giving you enough time to assess the possibilities and decide which one meets your goals in the best way.
Do go through all considerations carefully. These include the location, the size and layout of the flat, availability of amenities, nearby infrastructure, pricing considerations, etc. Don’t make the decision lightly on the basis of an emotional reaction. Give yourself enough time for the emotions to subside – this is when you can make a rational decision for the future.
Step 3: BTO Balloting or Actual Flat Application
Now that you know what flat you want to get, it’s time to go through the actual HDB application for the property.
Once the BTO launch is announced, you have a seven-day application window. There’s going to be a 10-dollar application fee you’ll need to pay in order to move forward with the procedure.
Every launch gives you one opportunity to apply for a single flat at a single location. This is why you need to be 100 per cent confident in your selection. If you’re hesitant or somewhat reserved, you may want to wait for an upcoming launch that will meet your needs better.
For more information on the application process, please check out these HDB guidelines.
There’s no way to know if you’re going to qualify for a BTO home the first time you try. The number of applicants is definitely going to affect your chances. Some people get lucky the first time around, especially if they’re strategic in their application. Others will need to go through balloting a couple of times before they get a flat. Usually, you’ll know whether you’ve been approved for a brand new home within three months of applying.
To increase your chances of being successful the first time around, you can apply under priority schemes that you qualify for. Some of these include the Parenthood Priority Scheme, Married Child Priority Scheme, Multi-Generation Priority Scheme and Third Child Priority Scheme.
Step 4: Securing Financing
Now that you’ve qualified for a BTO flat, it’s time to start planning the financial aspects of the purchase.
HDB has put together a very useful budget calculator you can use to determine how much funding you’re going to need on the basis of your current savings and the parameters of the flat that you’d like to acquire.
Your two finance options in Singapore include an HDB loan and a bank loan.
HDB loans require no cash downpayment, which makes them ideal for first-time buyers and those who have limited savings. If you have some cash set aside, you may want to look into bank loans as an alternative.
If an HDB loan is the one of preference, you’ll have to apply for an HDB Loan Eligibility letter. This document, as well as all additional financial documentation will be required during your first meeting with the HDB. Make sure you have an entire file put together to speed up the upcoming steps.
A final tip here is to be very selective with bank loans. Don’t just go for the first one being offered. Take some time to compare financial products and their conditions. There are many online tools you can use for the purpose.
Step 5: Schedule Your First HDB Appointment
You now have an approval and you’ve gotten your finances in order. The next step would be to schedule your very first HDB appointment, during which you’re going to select your flat.
Usually, there will be a few months between the completion of balloting and the first HDB meeting.
Use this time period to shortlist a few ideal flat choices. Do understand this is only preliminary research. There will be many other approved applicants and some of them will be ahead of you in the queue (on the basis of their queue number). Hence, the flat you fall in love with isn’t necessarily the one that will come in your possession in the end.
Online tools are available to check your selection progress before the actual HDB appointment.
When heading over for the appointment, bring along your IC, documents certifying your income and the documents pertaining to the loan you’ve secured. Once you select the unit you’re interested in, you’ll get the purchase process going by paying the option fee. The sum is 500 dollars for a two-room flat, 1,000 dollars for a three-room flat and 2,000 dollars for a four-room flat or bigger.
Step 6: Schedule Your Downpayment Appointment
The next HDB appointment you’ll schedule will need to occur for the downpayment to be completed before you sign your lease agreement.
As a general rule of thumb, the lease agreement needs to be signed within four months of booking your unit. This condition gives you enough time to get your finances in complete order before making the downpayment.
During this appointment, you’ll have to make a decision on the BTO flat ownership status. You have two options – joint tenancy and tenancy in common. The term joint tenancy refers to both owners having a 50-50 percent ownership of the BTO flat. Tenancy in common gives two or more owners different shares. This option is often chosen by people who contribute different amounts to the purchase.
As far as the downpayment goes, the amount will depend on several factors.
Those who have obtained an HDB loan will need to put an initial sum of 10 per cent into the downpayment (based on the purchase price of the flat). In the event of a bank loan, the downpayment is going to be at least 25 per cent of the property’s value. At least five per cent of that amount will have to be paid in cash.
There will also be legal fees and stamp duties to take care of.
Step 7: Collecting the Keys
A long journey has finally come to an end.
If all of the previous steps are completed successfully, you’ll now move on to collecting your BTO flat fees and coming up with additional arrangements (like a BTO renovation and moving in).
The HDB will be responsible for notifying you when the keys to your brand new apartment can be collected. Again, there are different timeframes. Some new owners will get their keys before others but this isn’t anything to feel alarmed by.
Step 8: Home Interior Design and Renovation
Once you have your keys, you can start conceptualizing a BTO interior design and renovation, the acquisition of the right furniture, appliances and accessories for your home.
This is where professional assistance is going to come in really handy.
Home Guide is an HDB licensed home interior design and renovation company. Through the years, we’ve helped numerous homeowners bring their perfect flat vision to reality. You can check out our residential portfolio for a better understanding of our style and capabilities.
In addition, we’ve put together a good range of affordable BTO renovation packages. You’ve already spent enough on getting your BTO flat. Chances are that you would want to save as much money as possible on your renovation (while still getting a high quality outcome).
Contact Home Guide now to discuss the specifics of your BTO renovation and to get the process started.