ZERO DOWN Investment Strategy 4 – Power of Statutory Savings (EPF)

For many working employees, it is mandatory for you to contribute a portion of your monthly income to a statutory savings provident fund call Employee Provident Fund  (EPF). 
        
At the time of writing, the employee portion (you) will require to contribute 11% of your monthly income into EPF, while the employer portion (your company) will require to top up another 12%, make it a total of 23% savings towards your old age retirement, medical emergencies etc.

If you are 1st time house buyer or keen to buy another house, you may consider leveraging on your EPF money as a ZERO DOWN investment strategy. 

The money in the EPF is subdivided into 2 accounts,  account I is mainly for mutual fund or share market investment, while account II will serve as withdrawal for the housing related matters such as application for withdrawal to pay for house purchase down payment or withdrawal to reduce the housing loan amount.        

Considering the same scenario under ZERO DOWN Investment Strategy 3 – Power of Landlord;

After obtaining a 90% loan from the bank, the borrower can then approach the EPF to apply for withdrawal to purchase house. This is how it works :            

EPF withdrawal to purchase house( with loan) is calculated as follow : 

* (260k – 234k) + 10% of 260k

With the 52k or all your savings in account II in hand, you have already acquired the property with ZERO DOWN payment and ready to embark on the next property hunt.