Frequently Asked Questions about Mortgage
Finding a house of your dreams and then getting the best mortgage package according to your requirements can be the most hectic and stressful job of your life. You probably have plenty of questions on your mind. Below are some frequently asked question and their answers that potential buyers and mortgage borrowers should ask their mortgage broker:
- Do I need to have at least five percent for down payment?
A down payment of 5% is compulsory for many banks, but you can find internal or external funding to cope with it. Depending on your circumstance, you may be able to borrow your down payment from a personal line of credit or gifted funds.
- Won’t my bank offer me the least interest rate?
Not so much. Banks actually get profit from their customers’ loyalty, because devoted clients would not bother to “shop around” elsewhere. Many loyal customers think that their bank would offer them the best rates they have or that the rates won’t difference too much. They feel that they would be obligated to because they have been a client for so long or find it a hassle to compare rates. So, go for a mortgage broker who specialises in home financing for discounted rates or at the very least, look around and compare mortgage loan rates in Singapore .
- If I have to pay a penalty to get out of my mortgage then I should just wait until it is paid off?
Penalty costs can be large but it may be worth it in the long term. Basically all you have to do is ask your broker to do some calculations. Calculate the difference between the penalty to break your current mortgage and then the costs associated with breaking that mortgage and registering a new mortgage versus the savings and interest over the term of the mortgage. Some lenders actually cover a portion of the penalty if you switch your business over to them. They might even cover all of it depending on the amount. All you have to do you just ask your broker and discuss your situation with them. Getting a new loan to pay off your mortgage is known as refinancing your mortgage. To get a loan more favourable to your situation, look around for refinancing mortgage loans in Singapore.
- Do I have to make payment against service fee of a mortgage broker?
No, most mortgage brokers do not charge their service fee to the client. They are not the lawyer, so, they don’t charge you for any of the advice. They normally charge their referral fee from the lender. So, in those cases they would have to charge you but your mortgage broker would disclose that so you would know that right away.