Home Loans

Can I Apply To Buy A HDB Flat If I Worked For Less Than A Year?

I have a partner and we just started work for less than a year. We plan to apply for a HDB BTO and would like to ask when is the earliest possible time we can do so?

DollarsAndSense Answers:

Even though you can ballot with your partner for any of the BTO sales launches, you should only do so after carefully assessing your own financial situation and determining the size and location of flat you can actually afford to pay by the time the BTO is ready.

After you’re successful in balloting for a queue number and invited to select a flat, you’ll need a HDB Loan Eligibility Letter (if you’re taking a HDB loan) or Letter of Offer from the bank (if you’re taking a bank loan), as well as have enough cash and/or CPF to make your downpayment.

Banks have their own income and work history requirements, so do check with them if you qualify. If you’re interested in exploring a bank loan, you can use our landing page  to get a quote on how much you’re likely to receive.

If you’re taking a HDB loan, the HDB Loan Eligibility Letter basically says that you meet the basic requirements for a HDB loan. Given your short work history, you are likely to qualify for only a small loan amount that may not cover the cost of the flat, after deducting grants and your downpayment.

That is fine, since the Loan Eligibility Letter is valid for 6 months from the date of issue anyway, so you will need to apply for another one before your key collection. You just need to ensure that by that time, you qualify for a higher loan amount, or have enough CPF and/or cash to pay for any shortfall.

You might be interested to know that from the May 2018 BTO sales launch onwards, eligible couples applying for their first flat can defer income assessment for their HDB housing loan until their key collection.

To qualify for this deferred income assessment, couples need to be either 1) full-time students; 2) National Servicement; 3) Completed their studies or National Service in the past 12-months before the flat application.

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Can I Extend My Loan Tenure If I Perform A Refinancing Of My Home Loan?

Question:

If I am servicing a bank loan for my HDB flat, can I extend the loan tenure if I refinance the loan?

DollarsAndSense Answers:

The maximum loan tenure cannot exceed 30 years for HDB flats and 35 years for private properties, but the actual tenure that you’re offered may be shorter depending on your age and the years left on your property.

If the tenure of your original home loan was reduced by your age or lease of your property, then refinancing would not help you extend your tenure.

In addition, banks tend to look at when you purchased your property, and deduct that period from the tenure they are willing to offer you.

The only time when refinancing can help you get a longer tenure is if you took a short tenure loan previously, and would now like to stretch it to the maximum period you’re entitled to.

Read  More: Step-by-Step Guide to Refinancing Your Home Loan

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