Get financial help to purchase your dream property in Singapore

1. How to get financial help to purchase your dream property in Singapore Maybe the biggest concern while buying your first apartment in Singapore is to handle the initial cash outlay. Even a small portion of the property value can cause a massive sum. So most of the time the buyers tries to minimize the downpayment to ease the load. There are various options available to do so. In a country like Singapore, which is considered as one of the heavens for real estate market and the launch of various new age properties with modern amenities and facilities, it gets tough to purchase a high-value apartment. To ease this situation there are the various loan and financial option available in the market for the buyers. In this article, we will discuss some points that will help to understand the basic eligibility and the nature of loan that can be applied for. The Loan to value (LTV) ratio The amount that you can borrow while buying the property of your choice is called the LTV ratio. For example, an LTV ratio of 75% means, one can borrow up to 75% of the property price or the value whichever is lower. In Singapore, for HDB loans, the maximum LTV is 90% and the remeaning 10% should be paid in cash. For availing bank loans the maximum LTV is 80%. The next question comes how does it work? Suppose someone wants to buy a resale property, valuing at S$ 500,000 and the actual price being S$ 515,000 the difference of S$ 15,000 is called the Cash Over Valuation or COV. So to avail a loan using the HDB Concessionary Loan, one can borrow S$ 450,000 (i.e. 90% of the S$ 500,000) Getting the loan approved The major part is to get the loan approved. While looking for HDB flats, there is two option. An HDB concessionary loan or a bank loan. The interest rate for HDB loans stays at a stable position at 2.65 compared to the bank loan, which varies from 1% to 1.68%. This may also change over the years according to the economic scenario. HDB loans are considered to be more forgiving than the bank loans. As it charges 7.5% per annum for late payment. Again for HDB loans, one can pay the down payment with the CPF funds, whereas for bank loans, one has to pay at least 5 % cash upfront. For bank loans, there is also a lock-in period for few years. So in a nutshell, bank loans are favorable for those opting for lower interest rates and HDB loans for those who are looking for more flexibility. Remaining lease on the property The general rule for maximum availability of LTV is often capped at 60 % for those properties having lease period for 36 to 40 years. Although one can make the payment upto 15 % of the total property price or the value whichever is lower, with the CPF fund. Property loan is not possible for those homes with 30 years or fewer on the lease. Location and condition of the property

2. Based on the location and the state of the property the LTV limit can get decreased. For instance, a property located in an unfavorable location or abroad may cause some to acquire lower LTV limit. Also, properties like condos having any defects can also fetch lower LTV loans. Age of the borrower and loan tenure If the age of the borrower is more than 65 years and the lone tenures, the LTV will be capped at 60%. But if someone having outstanding home loans, the loan tenure may fall to 40 % or even to 20%. The credit score During the process of applying for home loans, the lenders often check the credit score of the borrower. This credit score helps the lender to understand the borrower’s creditworthiness and the ability to pay back the loan amount in due time period. The credit score reveals the history of any late payment or failure to make any payments. The credit score includes every home loans, personal loans, and credit card payments. So take the maximum advantage of getting the loan approved, one must make all his loan payments on time. The above points are some of the major factors that help a borrower to get financial help while purchasing his dream HDB flat or condo in his desired location.Find good property agents in Singapore