CPF withdrawal limit and housing

Reply to CPF withdrawal limit and housing on Sun, 25 Nov 2012 19:40:41 GMT

kooky83 — Sun, 25 Nov 2012 19:40:41 GMT

if im not mistaken, that's not necessarily accurate. As long as you don't have enough money in your cpf, the govt will deduct the essential amount to reach the minimum amount from your sale and put it back into your cpf. So if you had paid cash, you would be making a deposit into your cpf esentially, Just take your loan from a bank lah, easier than going through hdb. I got my http://www.dbs.com.sg/personal/loans/default.page from dbs, no such bs about deducting here and there really...

Reply to CPF withdrawal limit and housing on Sun, 14 Oct 2012 03:52:27 GMT

Www — Sun, 14 Oct 2012 03:52:27 GMT

hquek:
Cpf will only take the monies used and the accrued interest. If you pay in cash, the cash will be refunded to you. You can see the expected amount due to cpf when you log into cpf website and go to property section.

Pay hdb loan in cash, then return in CASH to me if sell off the house?

If like that, then still alright, as long not lock into cpf OA or SA...

Reply to CPF withdrawal limit and housing on Sun, 14 Oct 2012 01:11:00 GMT

hquek — Sun, 14 Oct 2012 01:11:00 GMT

Cpf will only take the monies used and the accrued interest. If you pay in cash, the cash will be refunded to you. You can see the expected amount due to cpf when you log into cpf website and go to property section.

Reply to CPF withdrawal limit and housing on Sun, 14 Oct 2012 00:58:00 GMT

Www — Sun, 14 Oct 2012 00:58:00 GMT

Not allow to use CPF to pay for HDB loan after reach valuation limit, even though have amount available in OA? Ask to top up in cash.

If pay in cash, later sell of HDB flat, the amount will bounced back into cpf account, then cannot touch the money as cannot reach the minimum sum?

Reply to CPF withdrawal limit and housing on Wed, 20 Jun 2012 09:51:03 GMT

hquek — Wed, 20 Jun 2012 09:51:03 GMT

if you are below 55, and want to use CPF to pay for your 2nd property, you have to maintain at least HALF the min sum (it’s not the full sum) before you can do so. this one I quite sure.

Yes, if you sell off 1 property, the logic goes that property 2 will be bumped up to property 1.

well, if you can use cpf to pay off the loan on property 1; I think that’s great. But I think the paperwork to do this could be quite cumbersome - vaguely, I understand CPF must have a charge over that property (that’s why when the property is sold, monies will first flow back to CPF before leftover to you). Sorry, you may have to consult cpf/lawyer directly on this. My suggestion is to go visit the friendly folks at cpf (consultation is free mah) and ask.

The valuation limit is the amount of value placed on your property. Previously there was no cap on cpf to be used. So potentially we can be using cpf on 150% or 200% to repay the loans (interest on loans will eat up a huge chunk).

Yes, the first 60K in ordinary and special accounts earn 4%. Existing bank loans may not be 1% - depends on whether the bank is willing to extend that to you. if you owe less than 100K, banks won’t want to refinance or consider their rates. That’s why I paid up for my hdb flat fast.

Perhaps you can consider if to pay a lump sum (not to repay the full amount) toward the home loan (partial capital repayment usually dun attract penalties; only full capital repayment will). Then if shit hits the fan and property prices plummet such that banks are calling back your loan (dun think that will happen to you), you still have some cpf to tide over on the loan part; else it may be a bit late for you to use your cpf to pay (this part I imagine one).

Reply to CPF withdrawal limit and housing on Wed, 20 Jun 2012 08:58:09 GMT

verykiasu2010 — Wed, 20 Jun 2012 08:58:09 GMT

MMM:
verykiasu2010:
you still get the same good feeling if your cpf $$ equals or exceed the bank loan and earning higher interest than what you pay to the bank

I know this doesn't make financial sense. But frankly... I don't feel happy with a growing CPF $$$..... With the constant change in ruling, I really wonder if I will get to see my CPF monies alive/ be able to use it when I eventually need to.

for cpf$, whether it is in cpf cash or in property, you can't touch them till after death, unless you sell the property after age 55 and withdraw based the prevailing rules.

before age 55, can see cannot touch, might as well make it work harder to earn the higher interest instead of pumping it into the house

after age 55, withdraw the cpf if you are able to make it earn higher than 2.6% p.a. net; and of course cash in bank is better than cash in cpf

hence not wrong to say CPF = coffin purchasing fund, make it work harder lor

Reply to CPF withdrawal limit and housing on Wed, 20 Jun 2012 08:34:29 GMT

MMM — Wed, 20 Jun 2012 08:34:29 GMT

verykiasu2010:
you still get the same good feeling if your cpf $$ equals or exceed the bank loan and earning higher interest than what you pay to the bank

I know this doesn't make financial sense. But frankly... I don't feel happy with a growing CPF $$$..... With the constant change in ruling, I really wonder if I will get to see my CPF monies alive/ be able to use it when I eventually need to.

Reply to CPF withdrawal limit and housing on Wed, 20 Jun 2012 08:23:36 GMT

verykiasu2010 — Wed, 20 Jun 2012 08:23:36 GMT

MMM:
verykiasu2010:
CPF $ in ordinary accounts earn about 2.6% p.a. in interest, tax free

bank loan now is less than 1% p.a. -- the choice is obvious. not true that you cpf $ is idle

as you grow older, the amount you can borrow is also impacted by age limit vis a vis monthly repayment ability.
It's true and interesting idea too. Alternatively we can just hold the payback in CPF till our bank loan agreement is up so we are not liable for any breakage free. But need to consider that there is no more rental income to offset.

It's just that the feeling having no more housing loan commitment is just so great.

you still get the same good feeling if your cpf $$ equals or exceed the bank loan and earning higher interest than what you pay to the bank

your have at least 3 years to arbitrage this situation because at this point in time, banks are willing to cap the loan interest rate at max 1.4% p.a. or lower

Reply to CPF withdrawal limit and housing on Wed, 20 Jun 2012 08:19:34 GMT

MMM — Wed, 20 Jun 2012 08:19:34 GMT

verykiasu2010:
CPF $ in ordinary accounts earn about 2.6% p.a. in interest, tax free

bank loan now is less than 1% p.a. -- the choice is obvious. not true that you cpf $ is idle

as you grow older, the amount you can borrow is also impacted by age limit vis a vis monthly repayment ability.

It's true and interesting idea too. Alternatively we can just hold the payback in CPF till our bank loan agreement is up so we are not liable for any breakage free. But need to consider that there is no more rental income to offset.

It's just that the feeling having no more housing loan commitment is just so great.

Reply to CPF withdrawal limit and housing on Wed, 20 Jun 2012 08:09:45 GMT

verykiasu2010 — Wed, 20 Jun 2012 08:09:45 GMT

CPF $ in ordinary accounts earn about 2.6% p.a. in interest, tax free

bank loan now is less than 1% p.a. – the choice is obvious. not true that you cpf $ is idle

as you grow older, the amount you can borrow is also impacted by age limit vis a vis monthly repayment ability.

Reply to CPF withdrawal limit and housing on Wed, 20 Jun 2012 08:02:03 GMT

linden2000 — Wed, 20 Jun 2012 08:02:03 GMT

MMM:
After I have sold my property and refunded the CPF used to my CPF account, can I re-use the savings to buy another private property or redeem another housing loan with my CPF?

A: Yes, If you are below age 55, you can use the savings and the amount refunded in your Ordinary Account to buy another private property or redeem another housing loan.

If you are aged 55 and above, the CPF refund will be credited to your Retirement Account. If you intend to buy another property or redeem another housing loan, you can use the savings in your Ordinary Account and the savings in excess of the required Minimum Sum cash component in your Retirement Account (excluding interest earned) to do so. Please click here for the applicable Minimum Sum cash component for different cohorts of members aged above 55.

Extracted this from CPF website.... Does min sum only apply to those aged 55 years and above???? So if we are below, we don't have to keep min sum????

Have to keep half the min sum(ie the cash component) in ordinary + special accounts

http://mycpf.cpf.gov.sg/CPF/my-cpf/buy-house/BH5.htm

Reply to CPF withdrawal limit and housing on Wed, 20 Jun 2012 07:27:01 GMT

MMM — Wed, 20 Jun 2012 07:27:01 GMT

After I have sold my property and refunded the CPF used to my CPF account, can I re-use the savings to buy another private property or redeem another housing loan with my CPF?

A: Yes, If you are below age 55, you can use the savings and the amount refunded in your Ordinary Account to buy another private property or redeem another housing loan.

If you are aged 55 and above, the CPF refund will be credited to your Retirement Account. If you intend to buy another property or redeem another housing loan, you can use the savings in your Ordinary Account and the savings in excess of the required Minimum Sum cash component in your Retirement Account (excluding interest earned) to do so. Please click here for the applicable Minimum Sum cash component for different cohorts of members aged above 55.

Extracted this from CPF website.... Does min sum only apply to those aged 55 years and above???? So if we are below, we don't have to keep min sum????

Reply to CPF withdrawal limit and housing on Wed, 20 Jun 2012 05:45:41 GMT

MMM — Wed, 20 Jun 2012 05:45:41 GMT

hquek:
Try my best here.

CPF for first property will be pegged at I think 100% of valuation limit.

After that, you will have to set aside at least 50% of the minimum sum (ie should be about $60+K for each account) before you can use cpf for subsequent properties. And assuming you have that set aside, again the cap will be 100% of the valuation limit.

Actually, the prudent way is to use cpf in your purchase whenever you buy. Open that window even if you don't intend to service loan with it. Once approval is given, it'll be easier to increase/reduce the contribution. Also, I'm assuming your property was bought before the limits kicked in; then it'll be even better as you would have been able to use more of it to service your property.

As for the housing agent, I think it's about 1-2% of the sale amount. But this is subject to agreement. I'm sure agents will be very happy to quote.

Hi Hquek,

Thanks.

So if based on 60k min sum each, it does appear that with the sale, the CPF can fully pay off property 2 and potentially monies for property 3. Unfortunately CPF was never build in for property 2 and 3 legal papers as we didn't have sufficient CPF for that.

What is this 100% of valuation limit? Our outstanding loan for property 2 is probably only 20% of the market value but around 55% of the original purchase price. So I assume with that, we will not be hit by the 100% valuation limit too? Property 2 and 3 were bought after year 2006.

On the note for \"subsequent\" property, once we sell off property 1, there is no other property using CPF. So property 2 effectively becomes the 1st property and property 3, the subsequent? So if we still have balance after the 60K min, we can use that for property 3 as well ?

I am doing a breakeven analysis. Unless we sell property 1 at certain price, otherwise we might incurr more cash outlay for those incidental costs Eg. agents, lawyers, early repayment, etc.... Need to go home to see the bank docs....

Reply to CPF withdrawal limit and housing on Wed, 20 Jun 2012 05:17:18 GMT

hquek — Wed, 20 Jun 2012 05:17:18 GMT

Try my best here.

CPF for first property will be pegged at I think 100% of valuation limit.

After that, you will have to set aside at least 50% of the minimum sum (ie should be about $60+K for each account) before you can use cpf for subsequent properties. And assuming you have that set aside, again the cap will be 100% of the valuation limit.

Actually, the prudent way is to use cpf in your purchase whenever you buy. Open that window even if you don’t intend to service loan with it. Once approval is given, it’ll be easier to increase/reduce the contribution. Also, I’m assuming your property was bought before the limits kicked in; then it’ll be even better as you would have been able to use more of it to service your property.

As for the housing agent, I think it’s about 1-2% of the sale amount. But this is subject to agreement. I’m sure agents will be very happy to quote.