Financing
How Should Emigrants Apply for Housing Loan
October 15, 2009 by Aaron Smith · Leave a Comment
In Singapore, housing loan packages have two categories: fixed rates or floating (variable) rates.
Fixed rates are sometimes extended for up to 3 years. Still, other lenders can go up to 5 years or 10 years. In many Western countries, fixed rates can be made throughout the loan tenure.
On the other hand, floating rates are classified into published rates or board rates. Published rates are mainly rates that are published daily, example being the Singapore Interbank Offered Rate (SIBOR) or Singapore Swap Offer Rate (SOR), while board rates are determined by the individual bank or financial institution. Many of the lenders put their board rates to a certain financial benchmarks, yet the accurate components are sometimes not clear and variations in board rates become indefinite.
There are no limits for emigrants applying for housing loans. Still, the following elements should be studied.
Loan to Value
In Singapore, the maximum loan to value (LTV) is 90% of the purchase price or valuation, whichever is smaller. Some loaners do not give maximum LTV to emigrants, thus, housing loan packages for 90% financing are restricted. Loan approval for 90% financing is also tighter than for LTV 80% and below.
Income Proof
A letter of appointment from your local employer or your latest income tax assessment is essential for housing loan. Some local lenders do not accept tax assessments from other countries.
Landed Property
Before an emigrant can buy restricted properties like vacant lot or landed properties such as bungalows, semi-detached, and terrace houses, the approval from Singapore Land Authority is mandatory.
In-principle Approval
You may also look at an in-principle approval before buying. Consider of hiring a respected and professional housing loan consultant. This may help you spare time and money with your loan approval.
Find out more about a premier Housing Loan advisory firm, providing Housing Loans with free mortgage broking. You are welcome to reprint this article – but get your own unique content version here.
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