People typically take out a home loan to purchase a house, flat or a plot of land to build a house or renovate, extend, and repair an existing home; it is crucial to check all the documents and procedures followed before getting a bank housing loan singapore.
What is it?
A home loan is a financial assistance used to help pay for the purchase or construction. In today’s world, a home loan used to refinance an existing mortgage or compensate the cost of purchasing a second-hand home.
Types of home loans
Here are some of the various types of home loans available.
- Home purchase loan
- Construction home loan
- Land purchase loan
- Home improvement loan
- Home repair loan
- Home extension loan
The maximum amount of money borrowed.
Determine total eligibility before beginning the home loan process, based on the repayment capacity. Repayment capacity specified by the monthly disposable or surplus income, determined by total monthly income or surplus less monthly expenses, and other factors.
For home loans, banks have a list of eligibility criteria. The first thing a bank examines is a person’s credit history to determine their repayment habits. A credit score of 750 or higher is usually preferred. Other important considerations are as follows:
- Employment Type
- Minimum Annual Salary
- Collateral Security
- Margin Requirements
- Assets, liabilities, stability, and occupation continuity
- Residency status
What is the maximum loanable amount?
Most lenders require to put down 10-20% of the property’s value as a down payment. Some lenders refer to it as ‘one’s contribution.’ The lender finances the remaining 80-90 percent of the property’s value. Authorization, transfer, and stamp duty charges are all included in the total amount.
Even if the lender calculates a higher eligible amount, borrowing that amount is not required. It is possible to borrow even a smaller sum.
Benefits of taking a home loan
- Tax benefits
- Lower interest rate
- Due diligence of property
- Long repayment tenure
- No prepayment penalty
- Balance transfer facility
Thanks to the various channels that exist now with the advent of technology, obtaining a bank housing loan singapore have become easier than before. Either go to a bank branch and inquire about home loan options in person or fill out an online application.
The bank collects the required documents when applied. It starts processing the application, which includes checking the CIBIL score, asset value, and eligibility calculation based on income and liabilities, among other things.