Basic Guide to Securing Mortgage in Singapore

Buying a house in Singapore is a big step. If you think you are ready, buying a house is more practical than renting. Buying is not an easy process and it will require time but if you are patient, you will have the best deal with the help of property agents and lawyers.

Here in Singapore, there are different types of property that you can choose. If you are a foreigner, your choices are limited. If you are a citizen, you do not have plenty of choices from private apartments, condominiums like Riverfront Residences, Housing Development Board flat, 3Gen flats, and landed property.

Your choice of location and the developments around will determine the price of the unit. The prime location is called Core Central Region (CCR). CCR offers units with the highest property prices. The Rest of Central Region (RCR) is a popular option for those who want to buy a property that is still near to the central business district without expensive prices. The last area is called Outside Central Region (OCR). OCR refers to the suburban areas.

The mortgage market in Singapore is one of the most established in Asia.  As of 2015, the mortgage market here rose to 45% of the GDP from 14% in the mid-1990’s.  This looks promising for people who want to secure a mortgage. If you want to know more about mortgage and how to secure one, here’s a guide:

Consult a specialist

It is imperative that you start early. As soon as you decided to buy a property, you need to act right away. The first thing is to do is consult a mortgage specialist to find out about financing.

Know the Loan to Value (LTV) ratio
The government regulates the mortgage amount through the LTV ratio. The LTV ratio is 80%. This means you have to come up with 20% from your own funds. If you have other existing home loan, the LTV ratio is 60%. If you are an expat, there are different factors to be considered like your income, the location, and the employment history. It is important to know your LTV ratio so you can prepare the necessary amount needed to successfully make a purchase.

Decide your loan tenure  
You have to know that the maximum loan tenure is forty years. Loan tenure is the length of time that you need to repay the loan along with its interest. The tenure will depend on the age of the borrower.

Pick your loan package
Most banks in Singapore offer 3 kinds of home loan packages to include fixed, variable and market-pegged. It is important that you make sure you understand the home loan packages to make an informed decision. Also, consider the perks given by particular banks. For example, there are banks that offer free fire insurance for the first year.