One of the first steps to take in buying a property is getting the mortgage process started. The borrower can use our free comparison website to compare competitive rates and to look out for promotional tie-ups with lenders for preferential interest rates. Do not get pressured by property agents to put down any deposit for the purchase. Instead, get an IPA (In-Principal Approval) as purchasers often have to forfeit their deposits due to the rejection of mortgage loan or reduced quantum.

Borrowers must be between the age of 21 and 65. Singaporeans, Permanent Residents and foreigners may all apply. Additional requirements may differ from bank to bank.

A typical Option to Purchase (OTP) has to be exercised within 14 days, failing which the option fee will be forfeited (usually 1-5% of purchase price). For private property, the standard Sale and Purchase agreement (S&P) has to be completed within 12 weeks from the exercised OTP date.

Depending on the purchase price, typically the amount to be prepared is as indicated below:

• Upon exercise of the OTP, you would usually be required to pay 5-10% of the purchase price (excl. option fee) as a down payment.

• If this is your first property for which you are taking up a loan, you can pay up to 75% of the purchase price with your loan.

• If this is your 2nd Property, the loan to value drops to 45%.

• If this is your third or subsequent property, the loan to value drops to 35%

• Stamp Duty -

• Additional Stamp Duty if applicable

• Conveyance Fee (No Legal subsidy for new purchase as per MAS guidelines, while refinancing can enjoy legal subsidy from certain lenders - typically ranged between $1,500- $3,000)

• Valuation Fee (No Valuation Subsidy for new purchase as per MAS guidelines, while refinancing can enjoy valuation subsidy from certain lenders - typically up to $500)

• Fire Insurance Note that for any new launches with cash rebates or incentives such as renovation or furniture, banks will typically factor in the rebate into the purchase price resulting in a lower approving amount.

Most Banks offer up to 20 or 30 years tenure to purchase the property.

For equity cash out using private property. the loan tenure for lenders such as ORIX, ETHOZ or ValueMax will be much shorter (10-15 years), but they may be able to offer terms and conditions such as interest-only loan and without TDSR guideline.

Nobody likes to purchase a property above market valuation as any difference in the amount will need to be topped up in cash by the borrower. Most mortgage bankers will be able to give an indicative valuation provided by reputable valuers. Alternatively, you can email us at towkay@smart-towkay.com and we will get the indicative valuation for you in an instant. Please note that an indicative valuation is not legally binding.

To adhere to MAS’ Total Debt Servicing Ratio (TDSR), all banks will require the following set of documents:

• Copy of NRIC/Passport of applicants • Income documents:

•Latest computerized payslip/IR8A o Two years’ tax return (for self-employed applicants)

•Two years’ commission statement (for commission-based applicants) • Option to purchase

• Latest CPF statement of account (if CPF usage is involved)

• Latest CPF withdrawal statement for existing property (if applicable)

• Option of sale for existing property (if applicable)

• Latest available statement for all existing credit facilities

• 6 months’ monthly bank statements 

A Bridging Loan helps you to meet your temporary cash flow needs. It allows you to A Bridging Loan helps you to meet your temporary cash flow needs. It allows you to commit to buying a new property even before receiving the proceeds from the sale of your existing property. You can borrow up to 20% of the property purchase price, with a repayment period of up to 6 months, to meet the initial down payment on your new property.

An Equity Term Loan (ETL) is a loan taken out against your property to acquire additional cash from the bank. This is a common form of financing as typically interest rates are at low prevailing mortgage interest rates. Basically, you pledge your property as collateral in a cash loan, and this allows you to keep your property and unlocks the value of the property by turning its value into a loan.

The amount that can be cashed out is calculated as such: [current valuation of the subject property x (70% to 80%)] – outstanding loan amount – CPF Usage.

So, let’s say you have a $1,000,000 property with an outstanding loan amount of $300,000 and CPF usage of $100,000.

Based on a conservative 70% Loan to Valuation (LTV), the amount you can cash out is $300,000.

Note that only private properties are eligible for ETL; HDB flats are not eligible.

Tenures for ETL are typically [75 years – your current age] – number of years spent servicing your home loan.

After signing the offer letter from the lender, the next step is to find a legal firm to do the conveyance. Lenders will have a list of approved legal firms on their panel, hence do check with your respective bankers to see if your appointed legal firm is on their panel.

Typically, a residential mortgage application should not take more than 3-5 working days to get approved and the usual timeline is approximately 1-2 days to get the approval letter.

Although most lenders need to adhere to Total Debt Servicing Calculation (TDSR), some will give leeway to borrowers with a poor credit bureau record.

In addition, lenders also calculate borrowers’ determined incomes differently, especially so for self-employed personnel. Thus, all is not lost if a particular lender rejects your application or gives a lower quantum than expected.

The typical lock-in period for most residential mortgages is 0 to 2 years. After the lock in period, you will probably receive notification from the lender that there will be an increase in interest rates.

Here, we will have 2 options:

1. Re-pricing: Go back to the same lender and ask for a re-pricing package. Depending on your initial mortgage package, a free conversion for a re-pricing of your mortgage rates might be offered. Otherwise, the lender might charge a one-time conversion fee.

2. Refinancing: If a lender does not give the best prevailing market rates, sometimes refinancing a package can yield more interest savings for you. Refinancing might incur additional conveyance and valuation fees but, more often than not, it will be subsidized by the refinancing lender.

For a better understanding of your current finances, you can always refer to https://www.areyouready.sg/YourInfoHub/Pages/News-How-much-CPF-can-I-use-for-my-house.aspx for more information on how much funds in your Ordinary Account can be used to purchase your property.

For more information on the two schemes offered by the Singapore government, you can take a look at Private Properties Scheme: https://www.cpf.gov.sg/Members/Schemes/schemes/housing/private-properties-scheme

Public Housing Scheme: https://www.cpf.gov.sg/members/schemes/schemes/housing/public-housing-scheme

Yes, of course. Besides applying by yourself, you can engage us to act as a middleman between you and potential lenders.

We understand the daunting task of going through the whole rigorous process of documents submission and numerous Q&As for a company to take up a Residential Mortgage Loan or Refinancing.

Our job is to work on your behalf to find the best mortgage home loans. We have a well-developed stable of lenders we work with, making your life easier. We are like your mortgage loan concierge; we do all the legwork for you, negotiate terms, and make the approval magic happen.

As we are independent, our advice on your loan selection will be neutral and unbiased. And the best thing is, we do this at NO COST to you at all. Contact us, or set an appointment with us, and let’s get started!

Yes, you can use CPF savings towards the purchase of the property, payment for stamp duty, legal fees and repayment of monthly instalments for the loan as long as you satisfy the following criteria:

• You must be the owner of the property. i.e. your name is or will be in the title deed.

• The property must have a remaining lease of no less than 20 years (as of May 2019).

• The property purchased is in Singapore, and the loan application is accompanied by a valuation report.