Evening all..
Wanted to ask some financial gurus here some questions..sorry to
bother ah.
My mom spoke to me last week on buying a condo as an investment.
She said her savings put in bank is earning peanuts and said if she
bought a condo, atleast rent it out can cover the monthly payment
and after awhile, can sell our HDB house and move in or rent the
HDB house out and move into the condo.
Her financial situation is as such. She has V amount of TOTAL
savings. V consists of W, X, Y and Z. W=Normal bank account for day
to day expenditure. Total amount is around $20k. X=Money for me and
my brother's education. Total amount is around $80k. I have a
diploma and my brother is having his O level this year. We are
looking at this $80k as our tertiary funds. Y=Retirement funds for
my mom. This is standing at $100k. And finally, Z=Investment funds
which is currently in a fixed deposit in a local bank but is
earning peanuts. Standing at slightly over $300k.
My mom is currently working in the govt sector with a pay of
$4k+. She does not have much CPF funds left as she is using it to
pay for the HDB house we live in. Reason much of it is depleted on
the house is due to the fact that there is only one person
contributing as she is a single parent. We live in a HDB house
which is an Executive Mansionette and my mom has about 8-10 years
more to pay for it. The things we are looking at is if we buy a
condo, how much is bank interest p.a.? I've checked with DBS and
it's 3.25% and offers a 30 year loan period. My mom is in the early
50s so will the bank give us a 30 years loan? Or will it be
something lesser like 15 years? We will not move into the condo
anytime soon as my mom plans to rent it out to FT. The cost of a
condo we're looking at e.g LakeShore which is a new condo at Jurong
West costs around $750-$800k for a 2 bedroom condo. If my mom
decides to pay $300k upfront, how long a loan period will we be
given by the bank? The main reason my mom is planning this
investment is because in the long run she wants to leave 1 house
for me and 1 house for my brother so that in the case the
unmentionable happens(touchwood), we will not be at a lost. The
montly payment comes to $2868/mth adding in the 3.25% interest p.a.
over a period of 15 years including a $300k payment upfront. Cost
of condo estimated at $800k. This $2868 does not includes the
montly maintanence fees such as securtity and stuffs needed to pay
to the management of the condo. We would like to know how much is
the market rate for renting such a condo.
Another thing is, I understand in the HDB ruling, if one of the
owners passes away, the other does not need to pay for the house.
However this rule was like 10 years ago when we bought the HDB
house so we're unsure does this rule still stays should we purchase
a new house. My mom is covered but now she's diabetic so she will
not be covered if she buys a new house. Do condos have such policy
or it's like no matter what happen still need to pay the cash? My
mom also doesn't wants to let her colleagues know of this so is it
possible my mom purchases the condo under my name? However I've
just completed my Diploma and currently awaiting National Service.
So even if my mom pays the monthly payment, will the bank not
approve as I do not have a montly income.
I'm sorry to bother everyone with so much question and this wall
of text. We're looking at not engaging an agent yet as we do not
want to be committed to one and force us into buying something
we're not interested or not give us full details on how and what
are we covered for.
The last and final question would be: Is it a feasible
investment? Will it work out for us in the long run as my mom has
about 10 years left to work. Or are we better of leaving the money
in the bank?
Thanks everyone for your time.
