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6 Common Problems When Getting A Home Loan In Singapore!

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If you are like most people in Singapore, you will have to take out a housing loan to finance your new home purchase. Obtaining a home loan is a time-consuming process, with numerous roadblocks along the way. From being outright rejected to not getting the desired loan amount, this article will discuss how to overcome these problems.

Most people think banks are always ready to lend the money they want as long as they are willing to take the loan. However, this is not the case.

Getting a home loan may seem easy from the outside, but the reality is far from true. Banks and financial institutions have their own set of eligibility conditions that the applicants must fulfil to get a home loan. We will focus on the common problems faced by Singapore residents while trying to secure a home loan – along with their solutions.

What problems do Singaporean homebuyers face when getting a home loan?

Here’s a quick overview of the challenges (and their solutions) we are going to discuss:

  1. Too many home loan options to compare & choose
  2. Difficult to check on home loan application status
  3. Home loan application rejection in the primary stages
  4. Long waiting time for the home loan application process
  5. Approved home loan amount is less than your expectations
  6. Dilemma of choosing the right interest rate type

Let’s get started…

1. Overwhelming number of home loan packages to compare

There are more than 10 banks offering home loans in Singapore, including DBS, OCBC, Maybank, UOB, HSBC, RHB, CIMB, Citibank, Bank of China, Standard Chartered Bank and Hong Leong Finance.

Based on the property type, homebuyers have the option to choose from one or more fixed and floating loan packages within each category. Turns out that homebuyers have potentially several dozens of home loan options to choose from and compare before buying a new property or refinancing their existing home loan.

As a result, homebuyers are overwhelmed with choices, making it harder for them to make the right decision. Such a situation is referred to as “analysis paralysis”.

Besides, the decisions you make when buying a new home are not limited to choosing the right home loan package. There are several other decisions you will have to make when purchasing a new home, including the home’s locality, furniture, renovation costs, etc.

One benefit of having a lot of home loan options is that consumers get competitive interest rates and a high level of service from banks.

The solution to having too many options for home loans

You can choose home loan options from different banks using a range of home loan comparison tools available to you. These tools do the heavy lifting by comparing home loan interest rates currently offered by the top banks in Singapore.

If you need some help, consider contacting a trusted mortgage broker who can give you a narrowed down list of options to consider based on your unique situation.

Apart from this, please read and understand the terms & conditions of the home loan agreement carefully and do not hesitate from seeking an explanation for any clause related to a particular condition that confuses you. It will help you steer clear of any surprises later on.

2. Troublesome to check on the home loan application status

Once you have applied for a home loan, you must keep track of your loan application status. Typically, it is time-taking to check your home loan application status as you have to go through various representatives. The real problem is that nobody tells you the exact status of your loan application while it is still under process.

Since a lot of paperwork is involved in the application phase, it is difficult for loan applicants to keep a check on the status of the application. Paperwork is critical, irrespective of the applicant’s income level and credit rating.

The application process can often be cumbersome unless the applicant has a clear-cut understanding of why a particular document is important.

The solution to the difficulty in checking the status of a loan application

Take help from one of our trusted and qualified Dollarback mortgage consultants for your home loan application. They can assist you with the necessary paperwork to streamline the submission and speed up the application process.

Mortgage consultants who have been a part of this industry for many years have the experience to manage all kinds of home loan applications on a daily basis. They are well aware of the bank’s processes and procedures, which enable them to provide you with insights on the chances of your application approval.

Experienced mortgage consultants at Dollarback Mortgage can answer your questions and regularly check your application’s status to keep you updated.

3. Rejection of application in early stages

A lot of times when homebuyers apply for home loans, their applications get rejected in the initial stages. But why? Well, the reasons may vary from case to case.

Sometimes home loan applications are instantly dismissed because of the wide gap between the borrower’s eligibility and expectations and what the bank is authorized to offer based on the borrower’s qualifications.

Similarly, the home loan application can also be rejected due to incomplete or missing requisites as well as for not meeting the minimum age, qualification or income criteria explained by the bank. If the bank is unable to verify the information given by the applicant, they may reject the application in the primary stages.

Another reason for rejecting your home loan application is poor credit history or credit score when applying for a home loan.

The solution to application rejection at the first stage

The best way to avoid being turned down is to thoroughly pre-check the eligibility requirements laid out by the bank for a home loan before applying. Apply only to the bank or financial institution where you meet the home loan eligibility conditions.

Prevent any confusion over the real value of a property by getting an indicative property valuation before applying for a property loan. If possible, try to get the property’s market value from at least two valuers. Sometimes, there could be a discrepancy between the property valuation done across different banks. In such a situation, the bank would only lend you as per its own property valuation.

If you want to avoid getting your bank loan application dismissed in the initial stages, please also re-check the qualification parameters of the bank and the accuracy of the given information. Make sure the information you supply to the bank is accurate and easily verifiable so that all the supporting documents sail through the preliminary process effortlessly.

4. Long waiting time for the application process

According to Property Guru’s Consumer Sentiments Study H1 2021, one of the biggest challenges around applying for a home loan in Singapore is the time banks or financial institutions take to verify the submitted paperwork.

This long waiting time can be attributed to a fair bit of paperwork involved and the in-depth assessment done by the banks before approval.

In case of missing or incomplete information in the submitted documents, your bank or financial institution may ask you further questions, which results in more time to complete the approval process.

The solution to cutting down the application process

To speak the truth: there is no way one can shorten the processing time of a home loan application. The time they need to process your application is crucial to ensure they are giving the money to the right candidate and he/she can repay them in time.

With the in-depth knowledge and experience of a mortgage broker, you can speed up the application process. They can help you prepare your paperwork so that there is no missing information or documents at the end of the day when your bank starts to assess your loan application. It requires a careful review of a big bunch of documents.

Experienced Dollarback mortgage consultants help ensure all your paperwork is up to the mark and prepared timely to help you present your case in the best light so that it has the highest chance of approval and obtaining more favourable terms.

5. Sanctioned amount less than expected

Not getting the desired loan amount approved is another issue a borrower faces while getting a home loan in Singapore.

Banks and financial institutions can lower the amount to be approved depending on the borrower’s repayment capacity. However, it is not the only parameter considered. Other factors that help determine the amount of loan that can be sanctioned include the borrower’s credit score, other outstanding loans, total debt servicing ratio (TDSR), employment stability and mortgage servicing ratio (MSR).

The final call for your home loan approval is taken by the bank only after considering all these factors.

The solution to being approved for a lower loan amount

If the bank approves a lower home loan amount for any of the above reasons, you must try enhancing your home loan eligibility. For this, you can include your working partner (spouse) or parents to present a higher gross monthly income and improve your loan eligibility.

Keep documentation for all home loan borrowers involved to keep the verification process smooth and avoid any last-minute discomfort.

6. The interest rate dilemma

One of the most common problems faced by every home loan borrower is whether to choose a floating or fixed interest rate. This is why it is crucial to know about the different home loan packages as well as the updated interest rates available in the market before applying for a home loan. Keep in mind that home loan interest rates keep changing from time to time.

The solution to the discrepancy in interest rates

Take help from a mortgage expert to understand how fluctuations in interest rates will impact your monthly instalments and the overall cost of the home loan. Only then you can make a well-informed decision about choosing the best interest rate for your home loan.

Mortgage broker vs banks – which one is better for homebuyers?

There are two main sources of information for home loans – mortgage brokers vs banks.

While banks are more easily accessible than mortgage brokers, the latter provides in-person consultation and support for the home loan process. However, you must bear in mind that speaking to a home loan banker from a bank might not always show the complete picture for the lowest rates offered by the bank.

Mortgage agents or consultants come in handy in such situations. They can help you understand your loan options better and provide a real picture of your home loan options available.

Mortgage brokers or consultants stay up-to-date with the different types of home loans available in the market and which will suit you best based on your financial needs.


Buying a home can be a daunting process for the unfamiliar. These are the common challenges that most borrowers face when trying to avail of a home loan in Singapore. By following the solutions provided, homebuyers can avoid these issues and make their home loan application process easier and smoother.

Dollarback Mortgage is committed to providing you with a holistic property purchase experience to its customers. From finding their dream home to offering hassle-free financing to a home loan, we have a team of talented and experienced mortgage consultants that can provide you with every bit of knowledge you need regarding best home loan rates and refinancing home loans in Singapore.

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