SIBOR or SOR?

SIBOR is generally more stable while SWAP tend to fluctuate more. However 3-month SWAP has recently stayed consistently lower than 3-month SIBOR for an extended period of time. SOR is also very reactive to currency exchange rates.

Which bank offers the best home loan deals?

Interest rates and spreads are not all that matter. Don't ignore the closing costs involved. Different banks can have different customized home loans for you. Don't be surprised if you will save more on a home loan that charges more interest because of the lesser closing costs involved. This is especially so if you know that you will refinance your home loan as soon as the lock in period has expired.

HDB loan or bank housing loan?

Our opinion is to always take a HDB concessionary loan if you are eligible for one. One of HDB's objectives is to to provide affordable housing for the people. While a bank is profit driven.

Negative Amortization?

Negative amortization for a housing loan occurs when your outstanding housing loan balance increases instead of decreases. There are a few instances that this can happen. Speak to us to learn more.

Pre Approved Home Loan

Pre-approved home loans are housing loans that are conditionally finalized before you have picked a HDB flat or private property to purchase. This helps you to have a better understanding of the properties that you can afford to buy. In principle approval home loans eliminate so much extra hassle that some real estate agents in the existing housing market may refuse to commit to a home seeker unless the is an existing pre-approval from a lender.

Such an approval indicates that the buyer of a house can afford a house within a particular price. This give a seller greater confidence in the buyer and shows that the buyer has the means to purchase the property in question. Nobody seller would want to deal with buyer who cannot financially afford the home.

Here’s what you should know if you are looking for a pre-approved home loan.

Start looking around early

Establish contact with at least 3 different housing loan lenders to find a package that suits your personal needs. Home loan packages are more or less similar in a number of ways. Getting more offers to make housing loan comparison does not necessarily mean that you are going to unearth a gem of an offer. However getting to know what is on offer from at least 3 lenders will give you a good feel of what is available in the market. Mortgage bankers are experienced and uses tools like a housing loan calculator to assess their mortgages. You can quickly be given an estimate by an experienced mortgage banker on how much you can get for a loan quantum. This helps you to better look out for a suitable home to buy.

Prepare your personal financial documents

Applying for a pre-approved home loan means that your housing loan application will be assessed before you buy a house. So be prepared to submit financial documents required for the application. Your lender will inform you of exactly what documents are require. They can include:

  • Notice of Assessment for the last 2 years of all relevant guarantors
  • Most recent 3 months to 6 months payslips
  • Personal bank statements for a specified number of months
  • Documented proof of investment income

Don’t feel an obligation to enforce a pre-approved home loan

Pre-approval for a home loan does not bind you to the lender that issued the approval. It is just a conditional promise for a housing loan. You are under no obligation to take up the offer. You can simply let it expire if you are not going with the offer.

Do not expect a determined rate offer

A per-approved home loan will indicate the housing loan quantum. However, it does not necessarily fix the type of loan or interest rates. At the point of your application, the interest rates used to calculate your loan is based on the existing rates to estimate your monthly payments and costs involved. By the time you have enforced the pre-approval, market changes may cause the lender to deem the rates offered previously as untenable. This will surely be stipulated clearly in the approval documents.

Keep track of your time frame

Pre-approvals will have expiry dates. There is a time period for you to enforce the offer. Once the expiry date passes, you may have to apply for an extension or reapply for the housing loan. However, if your financial position has not changed at all, you should be able to get an approval by providing your most current statements.

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