QUOTE(jetzxp @ Oct 27 2020, 02:30 PM)
I have really no idea. I will ask for clarification when i sign my spa.
Anyway, I was not planning to take a full loan. So it still is the same for me, if got free mot then will be a plus lo.
Well, I just asked my SA about this. This is what he said (I hope I do a good job explaining the pros and cons).
When you buy the property under HOC, the discount (let's say 10%) is reflected in the SPA. so, let's say the price of the property is 600K 10% off is 540K. this shall be reflected in the SPA amount. So the Loan shall be up tp 90% of this discounted amount. 540K x 10% So you still need to fork out a 54k down payment. Well, there is good and bad about this. If you do not wanna pay a single cent, this would be good to not take the HOC campaign for this property. Because the loan from the bank will be 90% of the 600k price. Get it? So the 10% discount has canceled your requirement for the down payment.
So, you can keep your 54k money for now and do other investments. (you have about 4 years to do as you please with the money so to speak). Advantage number 1 for not taking the HOC deal.
ins
Next, don't forget your SPA is on the lower amount. If you in the future do sell the property, your capital gain from the sale is larger. For example in 2030, you sell the property for 1million let's say. your capital gain is, 1mil - minus 540k. instead of the 1 mil - minus 600k.
So, you gotta work it out on that part. No idea in the future how much is the RPGT tax rate will be.
The MOT is going to be many years down the road. probably about 1 year after VP and its not too substantial (you can pay installment to pay it off also. I think this unit I'm getting the MOT is 11-12K?). So basically, you gotta weigh what is important for you. Would you want to pay DP now or not?
Jetzxp, I got my loan through CIMB. It's a Flexi loan and rate is 3.1%. Instead of paying up more and not get a full loan to save on interest, you can put your money and park in the bank to reduce the interest just the same but if you need the funds in an emergency or whatever, you can take it out from the bank account and use it first for a fee. CIMB charge like 25 bucks per withdrawal under the Flexi loan offer they stipulating to me. It's a type of Flexi. I forgot the name. There is another type of Flexi which has slightly higher charges for the withdrawal but has other advantages which i can't recall at the moment.
This post has been edited by totoromo: Oct 27 2020, 03:36 PM