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Should you take a renovation loan

Yes or No to Renovation loan in Singapore

Buying a house in Singapore is expensive however it is still possible for families to own one. Additionally with mandatory CPF savings, the upfront payment for a house can be paid off easily.

Apart from getting the house, what other other cost that you need to consider?
Renovation cost at least $15,000 to $30,000.
Furniture ranging from $10,000 to $15,000.
Other miscellaneous cost such as curtains, kitchen and storage racks about $1,000 to $3,000.
Electrical, lighting and painting cost $2,000 to $4,000.
Toiletry and kitchen items $500 to $1,000.

Are you getting a new house or moving to a new property?
For new homes, renovation is essential as the house will be in bare bone condition. Thus, it is recommended for home owners to start saving money 1 or 2 years ahead before purchasing their houses. Apart from renovation, there will be additional electronics and furniture cost.

Here is a list of items that you should consider before rushing to complete your house.

  • Is your current salary enough to pay monthly mortgage loans?
  • Would you have an emergency funds after your home completion?
  • Apart from rushing to complete your house, do you have alternative accommodation, such as parent house?
  • Are you be able to sustain the loan with your CPF or savings if you go out of job?
  • Alternatively, are you looking to make a profit from selling this property after 5 years?
  • If there are more than 3 nos to the answers above, you should reconsider your property purchase.

    What are the other cost to consider after house purchase?

  • Family plans such as welcoming a baby
  • Buying a transportation vehicle (optional)
  • Maintenance cost such as electrical, water and SC&C bills
  • Annual aircon repair, cleaning and festive decorations etc…
  • Yearly events which requires angbaos and gifts.
  • Monthly expenses
  • Ultimately, it is entirely up to personal choice when it comes to renovation loans. A good recommendation would be to carefully weight your current finance situation. Hence, it is best that you consult mortgage loan specialist you proceed with a renovation loan application.

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