What Happens After Selling Your HDB?

HOUSING MATTERS

What Happens After Selling Your HDB?

This topic might be one that you might just want to ask your property agent to handle. But since it does involve your property and also your own money, it would be useful to know what happens when you sell your HDB flat.

Some might wonder why do they have so little of a cash profit when you indeed sold your place for quite a good sum. Hence this article will discuss the financial flow after you have made a sale on your HDB flat.

Where does the sale proceeds go?

First, we have to establish how the flat was financed. CPF Ordinary Account (CPFOA) monies and/or cash would be used to finance the flat. Thus where the money will go is where the money came from.

If you paid via CPFOA, you would have to pay back to your CPFOA. And if you paid via cash, you will get back in cash. Let’s just get that straight.

To make it easier and to follow the majority, we would make an assumption that the flat was fully financed via CPFOA monies.

Accrued Interest

Let us explain the term of accrued interest. This is an interest that you have to pay back as if the money from your CPFOA that you use for your loan and interest did not leave your CPFOA.

Here is an example:

Home price:                          $400,000

Downpayment:                     $40,000

Monthly loan repayment:    $1,633

Loan Tenure:                        25 Years

Loan Interest rate:               2.6%

Assumptions:

Home has been fully paid and all financed via CPFOA.

Therefore, if you are able to sell your flat at $1,000,000, and after you paid back to your CPFOA, you would only have a profit of $17,478 in cash.

Check on your estimated sales figure

It will be a different result if you were to finance your flat with both cash and CPFOA. Nevertheless, the fundamentals of where your money will land will stay the same. Prior to selling your home, you should check how much accrued interest you owe so that you will not have a shock with the amount of cash profit that you will get.

You can check the amount you used for your property via the CPF website and also the accrued interest will be shown as well.

That is the end of the article and hope the information is useful. Do share it with your friends and families. Till next time.

Disclaimer:

I am a financial adviser but I am not your financial adviser. Therefore, what is posted on this website, are my opinions and NOT to be taken as financial advice. Information provided might be relevant at this period of time but may be irrelevant due to alterations to rules, regulations or policies. The information provided is true to the best of my knowledge, but there maybe omissions, errors or mistakes.