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Which is My Best Option to Fund My Condo Purchase? (Guest Post)

Which is My Best Option to Fund My Condo Purchase? (Guest Post)

A long time reader wishes to purchase a condo that is valued at $1.65 million. Currently, the family is staying at a 5-Room HDB valued at around $500,000 that is fully paid-up. This HDB can potentially rent for a gross rental income of $2,500 a month.

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This post was originally posted here. The writer, Kyith Ng is a veteran community member and blogger on InvestingNote, with username known as Kyith and has 995  followers.

He considered 3 options.

Option 1:

  1. Sell current HDB
  2. Use the sales proceed + CPF + cash to buy the condo
  3. Do not leverage up

Option 2:

  1. Sell current HDB
  2. Use the sales proceed + CPF to purchase
  3. Also loan $300,000

Option 3:

  1. Keep HDB
  2. Use CPF + some cash to buy a condo
  3. Also Loan $900,000
  4. This will incur an additional ABSD of $198,000 since this is the second property they would own.

Other assets the family own include:

  1. CPF OA: $900,000
  2. Cash: $500,000
  3. Stocks and Bond: $1,500,000

So he asked for my second opinion. I can’t give much advice since I am not his planner. But I think I can provide him some guidelines how he can go about to identify which option is most ideal for his situation.

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