1) Majority of home buyers (borrowers) seldom complete the housing loan. You wont be the first and neither the last.

If seller sells the property above purchase price, is quite straight forward. Seller will make some profit after minus cost.

However, if is below, then seller will make a loss. How to deal with this situation ....

a) if the SP is above outstanding loan, then is straight forward again. You will make a paper loss but you will receive some cash balance after the sale completed.

b) If the SP is below outstanding loan, the seller have to settle first the differential sum before the sale can be completed.

2) Rpgt is calculated based on sales profit minus sales, purchase and initial property improvement expenses.

Is difficult to say how many % of appreciation does it take to BREAKEVEN after all the other related fees considered as it depends on Purchase Price, Selling Price and cost.

Purchase cost is about 5% of purchase price.

Selling cost
a) Agent fees is 3% of Selling Price
b) Legal fees is about 3% of Selling Price if you appoint a lawyer.
c) Improvement cost ..... ?

Every citizen is allowed once is a lifetime exemption from rpgt tax for residential property only. Is not specific to the first sale and seller can select which property to claim exemption.

Property topic is very wide and every situation have different asnwers to suit individual. It can never be always 1 answer fit all.

What I have explained above is brief as I have not taken every details into consideration but what you want to know as a layman is there. Unless you have specific questions or problems, answer will be simple without taking consideration of the technicality.

You need to specific ....

The breakdown for 200k assuming ......

Down payment ..... 80k

Loan ...... 90% ..... 720k

Repayment ..... 120k paid for 5 years .... 2,000 per month.

In a housing loan, the initial monthly repayment of which a large portion (60%) goes towards interest charged. 40% will be princpal reduction.

So, 1,200 will be interest and 800 to reduce principal. After 5 years, principal loan will reduce by 48 000. So nett principal after 5 years will be 672k.

If selling price is 900k, the cashback 228k.

Gross profit from sale is 100k.

Assuming total cost incurred is 40k nett profit is 60k.

The above is calculation is for easy understanding ......but

The monthly repayment should be more than 2k per month and interest higher. The total payment will be more than 200k. Your cashback should be lower than 228k.



This post has been edited by mini orchard: Aug 20 2021, 08:19 PM

Maintenance and interest expense are consumption cost which cannot be taken as cost of ownership which is in lieu of rental payment.

In investment, those are taken as expenses against rental income.

At the end, one must compare consumption cost against rental to make a decision whether which is a cheaper option.

Interest is calculated based on the outstanding loan sum.

Naturally, is higher at the begining and therefore higher interest. Towards the end of 30 years, the reverse happen. As principal slowly decreases, interest becomes less.

Similar to fixed deposit. A higher principal will have higher interest earn. If you reduce the principal every year the interest becomes less. I am sure you wont agrees bank pays lower interest on fd at the begining.

The 60:40 ratio is to accomodate borrowers ability to repay the loan. The interest portion is oredi fixed as is based on principal outstanding. Anything less means the bank is giving discounted interest loan something similar like the moratorium....without collecting interest for 6 months.

If borrower wish to increase monthly repayment, he can take a shorter loan tenure to spread the principal over shorter months.

Paying more monthly or a certain lump sum to reduce principal sum is allowed and depends on the type of loan agreement.

If the agreement doesnt provide for it or if the bank is not given notice as required in the agreement or if the minimum lump sum is less than required, any excess money paid will be treated as advance instalment.

Signing up for the right loan package is important and an experience bank officer can guide you.

There is alway mix and match package available to suit borrowers.

This post has been edited by mini orchard: Aug 21 2021, 09:16 AM

As long Sale Price is above Purchase Price or Loan Outstanding, seller will received some money upon completion.

Profit is another matter.