I asked a taxi driver, who is in his 50s, if he has fully paid up his HDB flat. He shared his personal experience.
He bought a 3 room HDB flat for $29,000. Eight years later, its value increased to $60,000. He sold it and bought a resale 4 room HDB flat for $80,000. He took an additional loan for $20,000 and paid a monthly installment of $150 (or thereabouts) for 15 years. He has fully paid up his 4 room HDB flat, which is more than adequate for his needs. His children have grown up.
I said that he had managed his finances wisely.
He shared the experience of a neighbor who sold the first HDB flat, took out the profit and spent it away. The neighbor took a full loan on the resale HDB flat and now had to pay $1,000 a month up to age 75. This was very stressful.
Another friend sold the HDB flat on two occasions and took out the profit. He invested in the stock market and lost the money entirely. He could not pay the mortgage on the 5 room HDB flat which was repossessed. Now, he had to downgrade to a 3 room HDB flat, and was in a worse condition than the taxi driver.
Another relative could not pay the mortgage installment for more than 10 years. The HDB did not repossess his flat but continue to add interest and lawyer fees. As the value of the 5 room HDB flat was above the money owed, he was allowed to continue living in the flat. When he sells the flat, the net amount, after paying the loan, would not be sufficient to buy a 3 room flat today.
The three cases of over-spending on HDB flats are quite common and has harmed the finances of many Singaporeans.
He bought a 3 room HDB flat for $29,000. Eight years later, its value increased to $60,000. He sold it and bought a resale 4 room HDB flat for $80,000. He took an additional loan for $20,000 and paid a monthly installment of $150 (or thereabouts) for 15 years. He has fully paid up his 4 room HDB flat, which is more than adequate for his needs. His children have grown up.
I said that he had managed his finances wisely.
He shared the experience of a neighbor who sold the first HDB flat, took out the profit and spent it away. The neighbor took a full loan on the resale HDB flat and now had to pay $1,000 a month up to age 75. This was very stressful.
Another friend sold the HDB flat on two occasions and took out the profit. He invested in the stock market and lost the money entirely. He could not pay the mortgage on the 5 room HDB flat which was repossessed. Now, he had to downgrade to a 3 room HDB flat, and was in a worse condition than the taxi driver.
Another relative could not pay the mortgage installment for more than 10 years. The HDB did not repossess his flat but continue to add interest and lawyer fees. As the value of the 5 room HDB flat was above the money owed, he was allowed to continue living in the flat. When he sells the flat, the net amount, after paying the loan, would not be sufficient to buy a 3 room flat today.
The three cases of over-spending on HDB flats are quite common and has harmed the finances of many Singaporeans.
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