Pic: AP.

Pic: AP.

There is nothing quite as important in life as landing the home of your dreams. However, if you are living in Singapore, or if you plan to move to Singapore, you’d better be willing to spend a pretty penny to chase the happiness. Why? Because Singapore is the most expensive city in the world to live in by far. That being said, if your future plans involve Singapore, then you’ll not only need a house to live in, you will need a mortgage loan to help you support it.

Understanding your Limits
Everyone has limits in life, from physical, to mental, and everything in between. Here we are talking about a physical limitation, or, in particular, deciding exactly what you can afford. How much can you borrow? What will the bank allow you to do? First of all, it depends on your salary as your loan is determined by a loan-to-value ratio. In other words, the bank must assess your value before they can provide you with a credit. It might sound a little strange, or even insulting, but it is something that must be done. If you are a first-time homebuyer, then there is a good chance you will have trouble figuring out what you can afford. However, there are mortgage calculators online like this one on PropertyGuru that will give you the information you need. It is strongly advised that you spend some time with this calculator before you invest any time speaking with a mortgage adviser or lender. It might take a bit of time, but it will save you much trouble in the future.

HDB Loans and You
In Singapore, HDB loan is designed for individuals who have obtained HDB eligibility letter. This letter contains the maximum loan that you can borrow, along with the maximum installment that you can pay each and every month. Do you feel that you qualify for an HDB loan? If so, you can always apply for an HLE letter online and see if you can score a favorable outcome. Once you have passed the eligibility, you will be able to use this letter to finalize a loan with the HDB. Keep in mind that the letter will be valid for six months, and only six months, though it is assumed that this is more than enough time to tender an agreement with the HDB.

Why a Bank Loan?
Why would you want to take a bank loan when you can enjoy the benefits of an HDB loan? Housing loans from banks are slightly better because they offer more complex repayment options. You have your choice of a fixed rate mortgage as well as floating loans, and those that are associated with the Singapore Interbank Official Rate, otherwise known as SIBOR. Taking a bank loan can help you to tap into a far better interest rate, and you will pay far less than you would if you were to participate in an HDB concessionary loan. The choice is yours, of course, but there are obviously many benefits to going the route of the bank loan.

Apply for the Bank Mortgage
The first thing you need to do in your attempt to get a bank loan is get an In-Principal Approval or IPA. The IPA shows how much you are able to borrow from the available packages, and this will tell you just what you are looking at in the future. You will then be given a Letter of Offer stating the loan amount and other important pieces of information. The letter of offer is not cash, but you can use it as such to purchase the property in question. Housing loans in Singapore can be daunting at first, but you can get through the system, and you can ultimately get yourself the house that you want. Remember, the mortgage marketplace has a massive selection of loan packages for you to choose from, and eventually, you are bound to come across something that you like. Start planning today and make sure that you are able to secure the loan that will secure your future. It is only a matter of time before you need that letter of offer, and before you find it necessary to start looking at all of the available houses on the market. Are you ready to see your future home and enjoy all that it has to offer? If so, then use the mortgage calculator and start planning. Your entire life is laying ahead of you. So you want to spend as much of that life as possible in a beautiful, warm house that doesn’t have a massive ugly mortgage attached to its name.