Now that you have finally shortlisted your dream home in Singapore that you are interested in purchasing, you need to apply for a loan to finance it. Try to find a lender who can offer you the best deal on your mortgage loan. Even if you are looking for options in refinancing your housing loan, you should also take time to compare the mortgage loan rates in Singapore in order to make sure you always choose the best lender. Whenever you apply for a mortgage loan, your lender will typically consider the collateral value of the home, your credit score, and your capacity to repay the loan amount. In the banking world, these are termed as the three Cs of mortgage underwriting. Under the MAS regulation, lenders follow the TDSR to calculate your borrowing capacity – the amount you can safely handle to purchase a property. Still if the loan underwriter determines that you possess good borrowing capacity, you may be granted the maximum of the mortgage loan under the TDSR framework. However, if this is not the case, you may not be able to borrow the loan amount you are looking for at an ideal interest rate. Therefore, boosting your borrowing capacity is important, if you want to pull a good deal from your lender. Luckily, there are ways you can increase your borrowing capacity in order to qualify for a better mortgage deal. Let us see how it is possible to increase your borrowing capacity:
Improve Your Credit Score
Your credit score plays an important role in determining your borrowing capacity. Therefore, it is important that you try to improve your credit score all the time. The best way to go about it is to pay all your debt payments on time.
Consolidate Your Existing Debt
Besides checking your credit score, the lender may also check your current debt status in order to determine your borrowing capacity. Therefore, it is always a good idea to reduce your current debt level as much as possible before you apply for and compare mortgage loan rates Singapore. One of the ways to go about monitoring your current debt level is to consolidate all your existing debts into a single loan and manage from there.
Reduce your liabilities
You come also try to improve your TDSR score by closing all the credit cards that you do not use. This might help you to get a higher loan amount.