Penalty for downgrading
- Thread starter sherri
- Start date
hi i think there isnt any penalty involve if you downgrade, but you cant get the hdb 2.6% loan if you downgrade and need to get bank loan. that was what i learnt when i sold my 5 room flat last yr. wanted to get 5 room near my parents but hdb told me that if i upgrade and both combine income less than 8k we can still take hdb loan. so that time hubby n myself short of like $80 then hit 8k, so we upgraded to EA and used hdb loanThink you can call hdb to ask better
From my understanding, if you want to take HDB loan again, you have to pay a level of $45k cash if you downgrade from 5 rm to 4 rm. If you do not wan to pay the level,you have to opt for bank loan.
It's true that if you downgrade you can't take the HDB loan (2.6%)
But, you can still get a bank loan from POSB pegged to CPF rate (2.5%) but you can only borrow max 60% of your valuation. The loan name is POSB Home Ideal Loan (HDB).
I'm selling my house (5-room) @ Sengkang Fernvale & will be getting that loan.
michellechin
New Member
Hi Lulu. Sorry for intruding...but do u need an agent to help you sell ur home? U c, my dear husband is a property agent. let me know if you need his service. thks!
shiseru
Member
Yep heard of it, $45000 lohz, that's a lot ya :/ If this is your 2nd time buying a flat and it happens to be near your parents place, no subsidize.
I just sold my 4 rooms in Sengkang, the agent is around age 40 and pretty experience so the flat was sold in less than 2 weeks above evluation. He advised me to go for resale, help us apply HDB loan (I upgrade to 5 rooms). In addition, helps us calculate how much we can loan from HDB and how much our financial burden per month before we go ahead with selling and buying. I managed to buy below evaluation, a 5 rooms in Tampines, 137 sq ft lohz. Very satisfactory
When it comes to buy and sell housing, it's really important to get the right agent. I got to know him through recommendation, he never advertise on newspaper, it's all through word of mouth/intro from others.
I am glad everything went smoothly. The 2 previous agents I met had not offered such explanation.ancing_wub:
I just sold my 4 rooms in Sengkang, the agent is around age 40 and pretty experience so the flat was sold in less than 2 weeks above evluation. He advised me to go for resale, help us apply HDB loan (I upgrade to 5 rooms). In addition, helps us calculate how much we can loan from HDB and how much our financial burden per month before we go ahead with selling and buying. I managed to buy below evaluation, a 5 rooms in Tampines, 137 sq ft lohz. Very satisfactory
When it comes to buy and sell housing, it's really important to get the right agent. I got to know him through recommendation, he never advertise on newspaper, it's all through word of mouth/intro from others.
I am glad everything went smoothly. The 2 previous agents I met had not offered such explanation.
ancing_wub:
Last edited:
shiseru
Member
I had a good buy. I bought the tampines unit 5 rooms @380K, size 137sqft!! I got it 20K below valuation, top floor somemore.
If you go for resale, no levy, and everyone can loan from HDB 2x. Anyway, check your PM, i will provide you the agent's nunber. I am very pleased with him.
Hi Michelle,
thanks for the offer, but i think we've decided to engage one person as our agent. He's recommended by my hubby's friend.
I'm selling my 5-room sengkang flat and will be moving to toa payoh.
Let me know if you have any toa payoh flats....we'll be keen to view.
can drop me an email foodiezz@yahoo.com.sg
thanks
o..erm, didn't know abt this rule. but anyway, we're going to buy resale flat @ TPY so we're not affected by this.
~m3m~
Member
Did you use the grant when applying for the current 5 rm flat? If you did and when you downgrade, you will have to pay about 40k or 50k back to HDB. I know for a 4rm flat is 40K but not sure for the 5rm. It's either the same or 10k more. But you cannot take up HDB loan when you downgrade, only bank loan, unless you upgrade, then you are allowed to take up HDB loan. Even if you appeal, it may not be approved. JMHO.
i've just checked with HDB.
They said:
- If you are buying another subsidized flat from HDB (not from resale market), you will have to pay the Resale Levy, regardless whether you're taking bank loan or HDB loan
- If you want to downgrade to a smaller flat, regardless whether from HDB or open market, you can only take Bank Loan (no HDB loan), regardless whether you pay the resale levy or not.
They're 2 different issues. The resale levy is not related to whether you take bank loan or HDB loan.
It's S$45k for 5-room....quoted from HDB website:
"Those whose first subsidised flat is a 3-room, 4-room, 5-room and Executive flat will pay a resale levy of $30,000, $40,000, $45,000 and $50,000 respectively when they purchase a second subsidised flat"
pinkieroxy
Member
I had a good buy. I bought the tampines unit 5 rooms @380K, size 137sqft!! I got it 20K below valuation, top floor somemore.
If you go for resale, no levy, and everyone can loan from HDB 2x. Anyway, check your PM, i will provide you the agent's nunber. I am very pleased with him.
Hi can you PM me your agent contact number. I also intend to sell my 3 room flat and upgrade to either 4 or 5 room. Thanks in advance.
weatherbys
New Member
You only have to pay a resale levy on downgrading if you're getting a subsidy for the second time (excluding the Proximity Housing Grant). You can see all the cases to pay for resale levy when downgrading your HDB here. There's a table for each case.