Progressive Payment Schedule
Some of you may not have actually read the wordings in Clause 5 of the standard Sales & Purchase agreement use by all developers in Singapore under the Singapore Housing Developers (Control & Licensing) Act. Clause 5 pertains to Payment Schedule which will be progressive based on the stage of completion of the unit purchased (extract below):
Notice how at T.O.P. (temporary occupation permit) ie. collection of keys (sub-clause 5.3 above), the cumulative total paid would be 85% of the purchase price with one big disbursement of 25% at T.O.P. There’s still a last 15% of the purchase price yet to be called for where the payment is most certainly to be coming from the bank loan unless this is full cash purchase (purchaser’s downpayment or all the cash portion of the purchase price must be settled before bank will release any loan for remaining balance).
And when will this final payment be called? Typically by legal completion date of the project or C.S.C. (certificate of statutory completion) which can happen before or after a year from the date of T.O.P. (Final Payment Date) and there are rules governing how much of this 15% will be released to the developer and how much will be stakeheld by SAL (Singapore Academy of Law).
What you need to know is this – up to a year after T.O.P. there will be a loan amount equivalent to 15% of the purchase price that remains unpaid or undisbursed to the developer/SAL. Should you decide to refinance the home loan during this time to another bank, this amount of the loan will be treated as cancelled where a cancellation fee in the range of 0.75-1.50% will be charged to you.
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