If you're buying a property in Singapore, it's important to ensure you get an affordable mortgage loan. To do this, you should be aware of these costly mistakes that can be made when applying for a bank mortgage loan.
1. Not Shoring Up Your Income:
The costliest mistake to make when applying for an affordable bank mortgage loan in Singapore is not having your income on hand. In Singapore, you need to have a stable source of income at least 180% of the property price and 20% in savings and investments to apply for mortgage loans. If your employment changes or if you lose your job temporarily, there might be problems with getting approved by banks.
2. Failing to Provide the Minimum Requirements:
The most costly mistake when applying for a bank mortgage loan is not having all the documents that a bank needs. It is important to ensure that you are giving banks all of the necessary documents required to get your mortgage loan. Failure to do so might result in your application being turned down, and you will have wasted time and money.
3. Declining the Bank's Initial Offer:
One way of ensuring that you get a mortgage loan is by comparing banks' initial offers and then negotiating the final amount of loans before signing a contract with any bank. Negotiate with different banks to ensure that you get the best offer possible. Do not accept the first offer.
4. Applying for a Loan That is Beyond Your Means:
When applying for an affordable bank mortgage loan in Singapore, it's important to compare the property price and your income before deciding how much you can apply for. If you need help in calculating your finances, you can turn to a financial advisor for help.
5. Failing to Have a Down Payment:
When applying for a bank mortgage loan, it's important to ensure that you have a down payment. The lender might ask you for a down payment in addition to the 20% equity that is needed. Without having money saved up as your down payment, you will not be able to get your mortgage loan.
6. Failing to Get Pre-Approval:
It is important to ensure that you have pre-approval before applying for a bank mortgage loan. When applying for loans, banks will give you an initial offer and then evaluate your application based on the initial offer. Getting your loan approved might be difficult if you do not get pre-approval from the bank. It is important that you get pre-approval, or else your application might be denied.
7. Signing the Contract Without Reading it:
Always read the contract before signing it. If you sign a contract without reading it, you might have problems with the bank later. This could lead to fines and other penalties that you might have to pay, so always ensure that you are aware of what is written in your contract.
Each of the mistakes mentioned above can result in you paying fines, penalties, and having to repay the bank, so it's important that you are aware of them. Research each before applying for a bank mortgage loan, and ensure that you are aware of your options when applying for a loan.