There are some things you may not know if you’re thinking of selling your Tembusu Grand. You might be asking yourself the common question, “What happens to my mortgage if I sell my Tembusu Grand condo?” If you are moving from a flat into Tembusu Grand or EC you may also be curious about how much you can get out of your HDB sales proceeds.

Can your house be sold before you pay off your mortgage?

Yes, you can. You will still have to repay your loan before the property can be transferred to you.

You will use the proceeds of your sale to pay off your mortgage

You will get less when you sell your house because you have to include the mortgage payment, CPF refunds and grants, commissions, and other administrative payments. These are some things to keep in min

Repay your outstanding home loan

Your first task is to pay off any outstanding home loan. This could be a HDB housing loan, a bank loan or anything else. Your sale proceeds will include the outstanding amount.

Get your CPF money back

You would have to return the principal amount and accrued interest to your CPF Ordinary Account (OA), if you used funds from that account to purchase your house. These funds could have been used for downpayments, monthly loans, and buyer’s stamp duties. If you had been granted a housing grant, you would have to return it your CPF OA.

All of this would need to be taken into consideration, as well as the accrued interest. This is the interest the principal amount would have earned if it were sitting in your CPF OA and not being used for your house. The current CPF OA interest rates are 2.5% per year.

This article will provide a step-by–step breakdown of the calculations.

You might feel that a lot of your sale proceeds will be taken, but don’t worry. The amount you receive back to your CPF account may be used to help finance your next home.

Miscellaneous fees – agent commission, resale levy etc

The sale proceeds will also go towards miscellaneous fee, including legal fees and agent commission (if applicable).

Although agent commissions can be negotiable the average practice is to charge 2% of the home’s sale price. If you’ve purchased a subsidised flat, and plan to purchase your next flat with subsidies, you will be charged a resale tax.

Do you need to pay off your mortgage before you start your new EC?

You don’t have to sell your home until you transfer from an HDB to an EC. You won’t be subjected to Additional Buyers Stamp Duty (ABSD).

Sellers might consider whether it is better to pay their mortgage upfront or continue making monthly mortgage payments until they sell their house.

It will depend on how much money you have available and your cash flow. It is important to determine if you have enough funds for your living expenses after you pay off your mortgage. Also, you will need funds to pay your EC, legal fees, and resale levy, if necessary.

You don’t have to pay your mortgage off immediately. The proceeds from the sale of your property can be used to repay your remaining mortgage. It’s better to have extra money in the bank in case of an emergency or invest in higher-return investments.

You’ll ultimately have to weigh the pros & cons of each option.

Exemption from existing property loans from TDSR

You can still get a second loan for your property even if you already have one.

If you plan to sell your HDB apartment to buy a new property, the Total debt Servicing Ratio. It won’t impact the maximum loan amount that you can obtain for your new property. To complete the sale of your HDB apartment, you will need to submit documents like a copy the approval letter from HDB or a letter of commitment.

If you are selling an EC after MOP or private property, your monthly loan repayments can be exempted from TDSR. To do this, you will need to sign a sale-purchase agreement with the buyer and a certificate from IRAS proving that stamp duty has been paid.