Financing
Can an ERA Real Estate Specialist help me with financing?
Yes. Whether you’re buying your first home or your fourth, your ERA Real Estate Specialist can offer you valuable assistance with the financing process.
ERA Real Estate Specialists have extensive training in real estate financing regulations and the different mortgage options available to homeowners. Their experience with different financial institutions and closing many transactions adds to their ability to offer professional advice. You can count on an ERA Real Estate Specialist to help make the task of finding and obtaining a mortgage as easy as possible. That’s what being 1ST IN SERVICE is all about.
What are the important points to note in a typical mortgage loan?
Most financial institutions in Singapore offer mortgage loans based on three main criteria: value of property, followed by age and creditworthiness (earning power or financial standing) of the borrower. The value of the property will be appraised by a licensed valuer appointed by the financial institution. The age of the borrower will determine the maximum loan period and the creditworthiness will determine the financing amount allowed.
The loan period is usually up to a maximum of 30 years and the interest rate charged is higher for a longer loan period. Mostly, the monthly interest payable is based on the outstanding loan amount either on monthly rest (calculated at the beginning of each month) or annual rest (calculated at the beginning of each year).
What does the approval process entail?
Your financial institution will need proof of your income in the form of a recent pay slip (if you’re self-employed, they’ll need your last 2-3 years’ income tax returns), plus account numbers for your savings and checking accounts and pertinent information on any debt you may have (credit cards, car loans, etc,),
If you find the process a little disconcerting, take heart. A financial institution’s diligence in checking your financial background doesn’t mean they don’t want you to qualify; quite the opposite. Your business is every bit as important to the financial institution as theirs is to you – the fact is, residential mortgages are one of the most secure assets any financial institution can have today. You can bet they want you to qualify for a mortgage as much as you do.
How long does the approval process take?
It will take approximately two to three days for your application to be approved, although the process can take more or less time, depending upon the financial institution and the type of transaction.
Should I “pre-qualify?”
Pre-qualifying for a mortgage up to a certain amount is an increasingly popular practice among buyers who don’t want to worry about going through the approval process after they’ve found the home they want. We strongly recommend it.
As a pre-qualified buyer, you can bid on any listed home up to a set amount knowing that your mortgage application will be approved.
What should I look for in a financial institution?
You’d be cheating yourself if you simply took your mortgage needs to the first financial institution without first shopping around for the best terms on the type of loan you’re seeking, Again, your business is very important to financial institutions, and they can be very competitive about pursuing it to your advantage.
Start by checking the mortgage advertisements in the newspaper. These ads usually give you rate and term information on several different types of mortgages available. You’ll be surprised at the difference between financial institutions.
Then talk to your ERA Real Estate Specialist about the financial institutions you have in mind. ERA Real Estate Specialists are quite familiar with some of these financial institutions and can give you sound advice about an institution’s qualifying procedures and any unique benefits they offer home buyers.
Is there any penalty for paying off early?
Most financial institutions usually impose a penalty charge of 1% to 3% for any outstanding loan amount redeemed within the first one to three years of the approved loan. There are usually no penalty charges after the said first few years if a three-month notice period is given. If you’re unsure about the rules governing pre-payment, ask your ERA Real Estate Specialist or a representative of the financial institution concerned.
Is pre-payment worth it?
If you can afford it and are interested in the considerable advantages of owning your home free and clear at the earliest possible date, the answer is yes.
