Commercial Mortgage Loan
We Advice On:
Different banks have got individual guidelines for a commercial property loan with the differentiating factor being the classification of the commercial property.
A commercial property can be simply separated into fully commercial (units in a commercial building) or quasi commercial (HDB shophouses). The LTV limits will differ according to the classification of the property as per the banks’ guidelines.
Just to give a simple example, a HDB shophouse might be classified as a residential property by Bank A and a commercial property by Bank B. If you have an existing housing loan and choose to take a mortgage from Bank A, your maximum loan eligibility would be 45% (LTV of 45%) of the property value. Compare this to taking a commercial mortgage from Bank B which would give you a maximum loan eligibility of 80% of your property value (LTV of 80%).
If you didn’t know better and had not gone to different banks to check, you would have been forking more cash than necessary for your commercial property purchase.
Our mortgage professionals will recommend the bank which provides the highest loan to value for your commercial mortgage.
For a new commercial property purchase, the bank indicated value and the purchase price of your property as indicated on your Option To Purchase (OTP) has to be exactly the same. If these 2 values do not match, the bank will only grant you a maximum loan based on whichever value is lower.
If you are refinancing your commercial mortgage, the bank indicated value is of even greater importance as it determines your refinancing eligibility. The bank has to ensure that there is atleast 20% of equity in your property before you will be able to refinance your commercial mortgage loan.
DollarBack Mortgage is able to obtain property valuations across 16 Banks in Singapore. This ensures you get an accurate valuation.
*Do note that different banks provide different bank indicated values for the same property. Finding a valuation on your own would mean having to hop around from bank to bank just to find an exact match.
TDSR is basically a ratio of your total monthly debt obligations (including the monthly instalment of the future commercial mortgage you are applying for) to your monthly gross income.
The TDSR limits are usually imposed at 60% which means that your total monthly debt payments cannot exceed 60% of your monthly gross salary.
Our Mortgage Consultants perform TDSR calculations and provide solutions to secure the housing loan you desire.
Different banks have different requirements for the documentation required for a new purchase or refinancing of a commercial property in Singapore.
A DollarBack Mortgage Professional will advise you on what documents are required depending on your financing type and desired bank. This ensures that only the necessary documents are submitted to the bank which allows for a quicker application process.