Short Term Bridging Loan for New Launch EC Purchase
Are you wondering how the bridging loan can help you in the process of buying a New Launch EC?
Bridging loan is not for everyone, it is designed to help those EC buyers who are not eligible to get 75% bank loan, to proceed with the EC purchase without the needs to sell their existing HDB first.
Bridging loan is the difference between the purchase price of the New Launch EC and the eligible housing loan amount. It is a short term/temporary loan that helps EC buyers to tide over their short term financial needs for the housing loan shortfalls.
To be eligible, the EC buyers have to opt for the EC Deferred Payment Scheme. Perhaps, they are awaiting the realisation of the proceeds of sales of their existing HDB. Or, they will start marketing their HDB when their new EC is almost ready for occupation. The potential proceeds of sales (Cash + CPF) of their existing HDB should be higher than the bridging loan required.
Following is a simple example to illustrate how the eligible proceeds and bridging loan are calculated and applied:
THE ELIGIBLE PROCEEDS FROM THE SALE OF THE EXISTING HDB ≥ THE BRIDGING LOAN REQUIRED
$340,000 ≥ $210,000
|Current HDB Market Value (based on bank’s indication)||$700,000|
|Recognised Current HDB Market Value (75%)||$525,000|
|Less: Existing Outstanding Housing Loan||$185,000|
|Less: Existing CPF Utilised + Accrued Interest||$217,000|
|Potential Cash Proceeds||$123,000|
|Total Potential Eligible Proceeds (Cash + CPF)||$340,000|
|New Launch Executive Condo|
|Eligible Bank Loan
(Assuming the EC buyers able to obtain 55% loan-to-value)
|5% Cash Payment (Option Fee)||$52,500|
|15% Cash or CPF (Downpayment within 9 weeks)||$157,500|
|5% Cash or CPF (to be disbursed upon TOP)||$52,500|
|20% Bridging Loan Required (to be disbursed upon TOP)||$210,000|
|40% Bank Loan (to be disbursed upon TOP)||$420,000|
|15% Bank Loan (to be disbursed upon CSC)||$157,500|