Here in Singapore, financial institutions are permitted to lend up to 80% of the value of a private residential property. Of the balance, 10% must be paid in cash with the other 10% either in cash or through the Central Provident Fund (CPF). A valuation of the property-in-question by an independent surveyor is normally required.
In addition, financial institutions also require that monthly repayments on all loans including housing loans should not be more than 40% of the borrower’s monthly gross income.
Housing loans comes in different forms, some with fixed rates while others are based on floating rates that are pegged to the bank's board rates.
When choosing the right housing loan, you may wish to ask more about:- match duration
- monthly payment projections
- interest rate comparison
- fees and penalties
By preparing yourself and your credit before a home purchase or refinance, you can ensure a smooth finance process and can potentially save thousands on your loan. Improve your financial profile now so you can take advantage of the low interest rates before they disappear.
Basic knowledge on mortgage loans and refinancing preparations will prove very helpful as rates are always on the rise. Always be a smart borrower and save thousands by preparing your credit before you apply for a loan.
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