Equity/Cashout Loan

We Advice On:

A equity housing loan has 3 main factors which come into play:

  • Market value of property – Essentially the bank indicated value of the property
  • Remaining housing loan amount – Your principal outstanding housing loan at the point of applying for a term loan
  • Amount of CPF usage plus accrued interest to date (Can be found via myCPF portal) – The amount of CPF used towards the downpayment of the property at the point of purchase, accrued interest over the years and monthly instalment amount if CPF is used to service your housing loan

These 3 factors have to be taken in tandem to determine the eligibility of an individual to take up a new equity loan or refinance an existing one.

It is much more painstaking to apply for an equity loan compared to a usual housing loan. Often times, you would have to go from bank to bank to find a high enough bank indicated valuation to allow for an equity loan.

If you require an equity housing loan or would like to refinance your existing equity loan, do get in touch with a DollarBack Mortgage Consultant who will assist with the following:

  • Finding the highest bank indicated value from 18 banks
  • Performing preliminary calculations to determine equity loan eligibility
  • Advising on alternative methods to securing your equity loan

For a new equity housing loan, the bank indicated value effectively sets the precedent for how much you can ultimately cash out from your property. The aim is always to get the highest valuation possible so that your equity housing loan amount can be maximised.

If you are refinancing your equity housing loan, 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 paid up equity in your property before you will be able to refinance your equity housing loan.

If your outstanding equity housing loan amount exceeds 80% of the market value of your property (aka LTV), the only way to refinance is to pay down your home loan to build more equity in your property.

DollarBack Mortgage is able to obtain property valuations across 16 Banks in Singapore. This ensures you get the highest valuation possible and maximise your equity loan amount.

*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 the highest value.

Not many are aware that the process of how much of your monthly income is recognised for an equity housing loan application differs from bank to bank.

Some banks may be able to accept your monthly allowance as an addition to your monthly gross salary while some banks will not. These different recognition methods result in Bank A giving you a higher loan amount than Bank B even though the same payslips were submitted. Self employed individuals have an even harder time getting a home loan due to the income volatility.

Our mortgage consultants will to the legwork and get you a bank which can offer the highest loan amount.

Tips: Why Is It harder To Get a Home Loan if You Are Self-Employed & What To Do?

Staying within the TDSR limit is one of the important factors a bank considers when granting you an equity housing loan in Singapore. 

TDSR is basically a ratio of your total monthly debt obligations (including the monthly instalment of the future equity loan you are applying for) to your monthly gross income.

There are variations to TDSR limits from different banks when applying for an equity loan and there is no hard or fast guideline when it comes to an equity loan application. Due to the complexities involved for an equity loan, it has to be reviewed individually for every client and a standard criteria does not apply.

Our DollarBack Mortgage Consultants will propose the best solutions to secure your required loan amount.

Tips: Learn the Techniques You Can Use to Secure A Higher Loan Amount!

Different banks have different requirements for the documentation required for a new or refinancing of an equity loan in Singapore.

A DollarBack Mortgage Consultant 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.