Purchase

buy property

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purchase loan

  1. IN-PRINCIPLE LOAN APPROVAL
  2. Get a rough indication of how much you can borrow from the bank.
  3. Each bank may have different credit approving guidelines but a good indication would be that your total debt ratio should not exceed more than 60% of your monthly income based of TDSR (Total Debt Service Ratio).
  4. A bank will also often use a much higher interest rate tier (3.5% - MAS Requirement) to compute your loan installment to project for future interest rate movement, hence it’s always good to maintain some buffer.
  5. For an assurance on the amount of loan financing that the banks may grant you, you may put in your application to banks for an in-principal approval assessment.
  1. VIEWING
  2. Now that you know how much you can borrow, you can continue your search for your dream home property’s location, type, size, price and affordability.
  3. Be sure to take notes of the different properties that you have viewed.
  4. At the end of each viewing, have a summary of the properties that you have viewed and prioritise the features and characteristics of the properties.

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  1. NEGOTIATION
  2. After viewing and shortlisting of properties, you should then re-contact the seller or let them or the salesperson contact you. Propose another viewing so that you can have a second look at the property. 
  3. The rule is: a fairly price property will sell quickly, whereas an over-priced property won't or might not even sell at all.
  4. If you are engaging a salesperson, leave this portion to the salesperson so that you do not attach any emotional feelings to the property during negotiation process.
  1. OFFER TO PURCHASE / OPTION TO PURCHASE
  2. When you have agreed on a price with a seller, the most common practice is to issue an option fee in exchange for an Option to Purchase agreement from the buyer.
  3. Before you hand over the cheque, check the ownership proof of the owner. This can be in the form of an INLIS property search, E-valuation list from IRAS.

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  1. MORTGAGE LOAN PACKAGE
  2. Decide which mortgage is best for you.
  3. There are over 50 - 60 mortgage plans offered by the various lenders, banks and financial institutions in Singapore.
  4. Fixed rate, Variable rate, tracker interest rate plans, interest offset etc.
  5. Find one that is best able to meet your needs and priorities with the lowest financing cost.
  1. MORTGAGE LOAN
  2. With your home purchase confirmed and the right mortgage plan sorted out, you would put in your application for a formal approval with the bank. A copy of the option to purchase is needed for submission to the bank.
  3. Once your loan application has been approved, the bank will generate a formal letter of offer for your acceptance.
  4. When the letter of offer is ready, the banker will call you to fix an appointment to go through and accept the letter of offer.

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  1. EXERCISING THE OPTION / LEGAL COMPLETION
  2. The buyer has 14 calendar days to decide if he/she wants to proceed or not with the transaction.
  3. Once you have exercised the Option to Purchase, you have entered into a legal binding agreement with the seller and backing out of the deal will have legal consequences.
  4. If buyer does not exercise the OTP, the seller will forfeit the option fee 
  5. If buyer proceeds, then the process varies depending if you are purchasing a private property or a HDB flat.