My spouse and I decided that this might be the year we purchase a property in Singapore. This isn’t my first rodeo, but so much have changed since the last time we went through the process of purchasing a resale HDB flat in 2019. For one, the property market has heated up so much that there are cooling measurements and new processes.

Just for clarity, the resale flat bought in 2019 was not under my name. I was heavily involved in purchasing a resale flat back then for my sister.

Because so many years have passed and so much has changed in the real estate world in Singapore, I decided to record down the process. Hopefully, this will help you if you are planning to go the same route as I do.

Step 1: DO THIS FIRST - Apply for your HFE Letter

Before you do anything, start and submit your HFE letter application. HFE stands for HDB Flat Eligibility. It is a process newly introduced in May 2023. The letter will let you know whether you are eligible to buy new or resale flat, how much grants, and how much loan you can get.

You need HFE before you can submit an Option to Purchase (OTP) and the processing time for HFE is 21 business days. Yes, in a hot market with very high sales turnover, it could very well mean losing your dream house. So get this done before you even start your search!

To get the HFE letter, you will likely need the following documents:

• Past 12 months payslips - Get this from your employer
• Past 6 months bank statement - Get from your iBanking. Remember to include every bank account you own
• Credit Report - You can obtain a credit report here. If you recently applied for a credit card, you might be eligible for a free credit report.
• Latest Notice of Assessment (NoA) - You can download this from IRAS

An HFE letter is valid for 6 months. If you didn’t find anything you want to buy, you will need to apply for another HFE letter and you can do so 30 days before the expiry of the current one.

Step 2: Apply for an In-Principle Approval for your home loan

Once you’ve submitted HFE letter application, start contacting banks or mortgage advisory. I’ve gone through Redbricks before and I can confirm the agents are good and can help you.

If you’re not keen to work with agent, you can approach the banks directly. DBS, UOB, OCBC, HSBC are a few of the banks that can offer you home loan.

You will want to obtain a loan In-Principle Approval (IPA) from the bank which states how much maximum loan they can give you. An IPA is important because it will let you know how much you can afford. Also, some property agents will only let you view their units if you already have an IPA.

An IPA is valid for 30 days, but usually you won’t have a hard time getting another one if your income situation have not changed.

Step 3: Calculate how much you can actually afford

As I was saying before, an IPA determines the maximum price of the property you can purchase.

For example, based on your basic monthly salary, DBS might give you a loan of $750,000. A loan from a private bank makes up of 75% of the property price, so with that $750,000, it means the maximum property price you can afford is $1,000,000.

However, you must have enough CPF and cash for the 25% down payment and stamp duty.

If you don’t know how much stamp duty you need to pay, you can use PropertyGuru’s Stamp Duty calculator

Step 4: Search for resale HDB

Now that you’re waiting for your HFE letter, and you know what is the maximum price of a property you can afford, you COULD start shortlisting the flats you want to buy.

For this, my favorite website is PropertyGuru on desktop / laptop. I specifically said laptop because the search experience is so much better than the mobile experience. You get access to all the search filters, and you can view the property on a map, which makes it easier to single out the properties you want at the location you are keen for.

And this the step I’m on now. So I’ll stop the post right here. I am not sure whether I’ll actually buy a property this year or not. It depends on whether I can find the right place! Then, hopefully Part 2 will come.

Stay tuned, and good luck! To me, that is.