HDB / Private Home Loan
We Advice On:
For a new 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 home loan based on whichever value is lower.
At the same time, the stamp duties payable for your new property purchase will be based on whichever value is higher. Having a difference in your property purchase price and valuation is a costly predicament as it would involve a significant top up in cash or CPF towards your property purchase.
If you are refinancing your home 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 equity in your property before you will be able to refinance your home loan.
If your outstanding home loan amount exceeds 80% of the market value of your property (aka LTV), the only way to refinance is to pay down your HDB or private 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 HDB / Private Home Loan amount.
Not many are aware that the process of how much of your monthly income is recognised for a home 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 trying to secure their desired loan amount.
If you would like to assure yourself of the best home loan package for your specific requirements, it would be best to have a comparison of the loan amounts from at least 5 banks before making that very important decision to sign on the dotted line.
Our mortgage consultants will do the legwork and get you a bank which can offer the highest loan amount.
Staying within the Total Debt Servicing Ratio (TDSR) limit is one of the important factors a bank considers when granting you a home loan in Singapore. TDSR is basically a ratio of your total monthly debt obligations (including the monthly instalment of the future home loan 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.
DollarBack Mortgage Consultants perform TDSR calculations and recommend strategies to secure your desired loan amount.
Mortgage Servicing Ratio (MSR) – *Applicable to HDB and Executive Condominiums only*
MSR limits are only applicable for HDB and EC properties and if you are purchasing a HDB unit above $500,000 it would be trickier to clear the MSR limits due to the significantly higher gross monthly income required.
The MSR limits are similar to TDSR limits in the sense that they are both ratios of your gross monthly salary to a debt obligation. The key difference is that unlike TDSR which takes all your monthly debt obligations into account, MSR only takes the applicable monthly instalment of the home loan you are applying for.
MSR is a ratio of your monthly home loan payments to your monthly gross income. The MSR limits are usually imposed at 30%.
A simple example is as follows:
Gross monthly salary = $6,000
Monthly Instalment for a 500k loan = $1,400
MSR = ($1,400 / $6,000) x 100% = 23%
Since the MSR is at 23% which is below the limit of 30%, you will be eligible for a 500k home loan.
Our mortgage consultants perform MSR calculations and advice on how to pass the MSR limits for your HDB / EC purchase.
Relevant fees for a home is often an overlooked but critical aspect in managing your finances for your new home.
Different banks and law firms have different prices for fees associated with a home loan in Singapore.
– Valuation fees
– Legal subsidies
– Cancellation fees
– Early repayment fees
– Stamping of mortgage documents
– Conveyancing documents
For the uninformed, these feeds add up to quite a hefty amount.
DollarBack Mortgage will inform you which banks offer the lowest fees and recommend reputable law firms for conveyancing needs.
Different banks have different requirements for the documentation required for a new purchase or refinancing of a home loan in Singapore.
A DollarBack Mortgage Professional will assist you with documents required for an application. This ensures that only the necessary documents are submitted to the bank which allows for a quicker application process.
A part purchase/decoupling is a process where an owner has the option to remove his/her’s ownership in the property as well as mortgage obligations.
Why is a Decoupling / Part Purchase useful?
– Helps to significantly save on stamp duties for a 2nd property purchase
– Being eligible for the maximum loan quantum of 75% of your property price for your 2nd property
– Significantly decreases amount of debt obligations which makes it easier to apply for any credit facilities from banks in future
*Do note that the manner of holding (joint tenancy or tenancy in common) of the property is essential and many savvy investors take advantage of this to prevent burning a hole in their pockets. Get in touch with a DollarBack Mortgage Professional to learn of this well-kept secret!