Despite the fact that the economy of Singapore has been quite good recently, it’s still important to ensure that you’re taking the best care of your finances when it comes to big purchases like buying a house in Singapore.
There are several key things to bear in mind, and they’re all things that most borrowers will find helpful in one way or another as they go through the home loan application process. Here are ten important points to take note of when applying for home loans in Singapore.
1) Loan application
Know how much you can afford – First and foremost, you’ll need to have a good idea of how much you can realistically afford before starting your search for a home. You can make use of mortgage calculators that can help you get an estimate of your monthly repayments and other associated costs.
2) Payment history
One of the most important factors that banks will look at when assessing your application for a home loan in Singapore is your payment history. This includes both your credit history (i.e. whether you have made timely payments on previous loans) and your CPF contribution history (i.e. whether you have been contributing regularly to your CPF account).
When taking a home loan, most importantly, you should know how much you can afford. To calculate how much you can afford, consider your current income and debts, as well as your future earning potential. You should also note that your monthly mortgage payment does not exceed more than 28% of your total gross monthly income.
4) Mortgage rates and payment breakdown
If you’re looking to purchase a home in Singapore, one of the first things you’ll need to do is apply for a mortgage. Home loans in Singapore typically have interest rates between 2% and 4%, depending on the type of property and your individual circumstances. Here are 10 important points to take note of when applying for a home loan
5) Information about the borrower
As a first-time home buyer, you may not be aware of the many different factors that go into obtaining a home loan. Your income, employment history, credit score, and the amount of your down payment will all play a role in the approval process. Here are 10 important things to take note of when applying for a home loan in Singapore.
6) Repayment information
The repayment schedule should be listed as either net or gross. If your monthly repayments are net, that means you’ll have to pay more money than you actually borrowed at first. Gross payments mean your monthly repayments will be lower than what you borrowed.
At the end of the day, when it comes to such a large financial decision, it is crucial that you are well informed about the process and what to expect. The mentioned above were 10 key points that you must take note of when planning for taking home loans in Singapore.