Shopping For A Housing Loan
How to shop for a housing loan in Singapore
A lot of banks (if not all) provide housing loans in Singapore. It is normal if you find it confusing. You can actually find it really easy to compare housing loans in Singapore if you understand the basic facts about them. Ask yourself the following questions before seeking out one.
How much can I borrow?
It really depends on your monthly income. It also depends on your purchase price and valuation of the property you are buying. Banks and financial institutions in Singapore use their own internal credit assessment criteria to determine the housing loan quantum that you can qualify for. Because of this, there cannot be a specific guide on how housing loan in Singapore quantum are determined. Generally, a higher income and lower monthly expenses will help your home loan application.
What types of housing loans are available in Singapore?
You may find many fancy names used to describe housing loans in Singapore. These are just marketing activities. Most of the them belong to 2 types of home loans. One that has a fixed interest rate. And another that is subject to interest rate changes during the period of the mortgage tenure.
Fixed rate housing loans
The advantage of taking up fixed rate housing loans is that you know exactly what you will be paying throughout the life of the mortgage. This give you certainty and you can plan your personal finances accordingly.
Variations of fixed rate housing loans can be in the form of 30-year fixed rate, 15-year fixed rate, etc.
Do find out the details of the housing loan with your mortgage lender before taking up an offer, Different banks can have different terms on the types of products and services that they offer.
Adjustable Rate Mortgages
Adjustable Rate Mortgages (ARMs) is one of the most popular types of housing loans.
As the name suggest, interest rates for this type of housing loan can fluctuate. Depending on your risk appetite, this type of mortgage may seem desirable or undesirable to you.
