Before taking a home loan
You should consider
1. Shopping around
– Shop around and compare packages to find the best deal. Do not be enticed into making hasty decisions based on agent recommendation, time pressure, gifts or special tied up rates offered by bankers in the show flats.
1a. Will I be better off if I use the services of the bank recommended by my agent?
Generally estate agent must protect and promote the interest of the client and render any assistance to help the client in his transaction. If you are recommended a mortgage by your estate agent, ask if he receives any payment for the referral. Under the Estate Agents Act 2010, agents must now disclose to the client if they receive any payment for the referral of services rendered on by third parties to the client.
Proceed to compare the package with what you found before coming to a decision.
1b. How long is the process? Will I get my loan approved before the deadline to exercise my option?
Even if you have a good credit, you may not qualify for certain home loan packages. As such, you should be prepared to apply to more than 1 bank at the same time.
Banks typically can process and make an offer with 3-5 working days. Some banks even promised same day approval. As such, you will have ample time to search for a home loan and make a decision.
1c. Are tied up rates the best offer?
Generally, the rates are sometimes better than published rates. Depending on the purpose of the property, the tied up package may not suit your financial needs. You should still compare features like lock in period and fees before making a decision.
2. Talking directly to the banker
When browsing on the Internet for home loans or relying on referrals, note that some information may not be the most recent. To avoid misunderstanding, always talk directly to the banker on the latest product features, fees, terms and conditions.
3. Using the lawyer recommended by the lending bank
Generally, you may enjoy some savings if you use the lawyer recommended by the bank due to economics of scale. If you are recommended a lawyer by your estate agent, ask if he receives any payment for the referral and compare the fees before coming to a decision.
As a general guide, legal fee can start from
1. S$2,500 (property below S$2m) for private refinancing
2. S$2,500 (property below S$2m) for new purchase, private BUC
3. S$2,500 (property below S$2m) for new purchase, private completed
4. S$2,150 for HDB refinancing
Prices last updated on dec 2014. If you know of any better offer, do share with our reader.