Singapore’s residential property market is finally awakening from a four-year slump. A recent survey by Bloomberg indicates that the winter may be over and analysts anticipate that the residential property market will experience a resurgence of up to 5.5 percent.
However, higher housing loan rates might be put in place, and this might not be the best thing for new homeowners.
One of the most important and financially demanding decisions for most Singaporeans is owning a home. Despite high levels of education and access to information, many first time homeowners direct their focus solely on comparing mortgage loan rates in singapore on their quest for the best housing loans.
But, loan rates are not the only aspect they should focus on. Below are some tips on determining the best housing loans for new homeowners in Singapore.
HDB Loan vs Bank Loan
Bank loans may be flamboyant and colourful compared to HDB loans. However, applying for an HDB loan is a matter of principle firmly founded on your finances and ability to service the loan.
HDB concessionary loans are capped at a Loan to Value ratio of 90 percent, and customers can fund the remaining 10 percent, including stamp duties, using their CPF. It is a better offer than housing loans from the bank, where customers can only access an LTV of up to 80 percent. However, some clients insist that bank loans are a better option when you compare housing loan rates in singapore. This is because HDB loans rates are rigid, making clients unable to cash in on dips in the interest rates.
Shopping for Favourable Interest rates
When you compare housing loan rates, it is very different from other personal loans where flat rates are often applied. Focus your attention on the ‘rate type’ instead of how high or how low it is. There are two types of interest rates in housing loans, the fixed rate and floating rates.
Fixed rate mortgage loans often have higher interest rates than floating rate packages so that the lender is cushioned from fluctuations. Floating rate packages, on the other hand, increase and decrease in accordance with the market.
Other Aspects to Consider
If you are a new homeowner make sure to take a second look at the following aspects before signing on the dotted line:
The lock-in period – auxiliary penalties such as partial payment penalties and early redemption penalties. Don’t forget to check out other miscellaneous costs such as documentation fees and legal fees and the terms of the subsidies.
In conclusion, as the number of people seeking to own homes in Singapore is rising, new homeowners need to compare housing loan rates with more scrutiny and consider the above tips to get the best housing loans in Singapore