What A Headache! Financing A Flat!

My headache shows that I've learnt quite a lot compared with before where I know almost nothing. But it's a headache still!

To purchase a flat, you need your HDB Loan Eligibility aka HLE to be approved. HDB will process & come to a loan figure based on CPF contribution, not income. How do I know this? As most of you know, I've been working as an agency nurse since Jan this year. It means that only Jeff has CPF contribution. We were approved for a HLE amount that is probably only enough for a cheap 3 room flat. So I went with my agent friend to HDB on Sat to make an appeal for the loan amount to be raised.

HDB just called me at 8.40 am, informing me that they're unable to raise the amount becoz I do not have CPF contribution. To raise the amount, I'll need to have at least 3 months' contribution in my next job. By then, it would be end Feb already!

I can still purchase a flat that's priced higher than my HLE amount but I need to top up the balance in cash. How much cash? Cash above valuation aside (becoz this amount, like its name suggests, needs to be paid in cash anyway), we calculate by valuation alone. Valuation - grant - CPF OA amount - HLE amount = amount needed to be topped up in cash.

Example 1: Valuation for the resale flat you're getting is 280k. You're taking up a 40k grant for staying near parents. You have combined OA amount of 10k. HLE amount approved is 120k. So, 280k - 40k - 10k - 120k = 110k in cash top up.

Example 2: Valuation is 280k. Taking up 30k grant for 1st timers but not staying near parents. You have OA amount of 50k. HLE approved amount is 150k. 280k - 30k - 50k - 150k = 50k cash top up.

But there're also instances where you don't even need to max out your HLE loan amount. Say you choose to buy a cheaper flat.

Example 3: Valuation 200k - 40k grant - 50k OA amount = 110k. HLE is 150k isn't it? So you only take up 110k loan from HDB.

Headache right? Each time we view a flat, it's not just the location & whether we like it or not. We have to factor in the cash amount too. Say we're buying at 20k above value. Say we take example 2. We're short of 50k in loan. This means total amount needed to be paid in cash is 70k. If we're using example 1... 130k cash! This is excluding the 5k stamp fees ok! Crazy!