What are the Questions you need to ask for a mortgage loan before buying a Real Estate?
Interest Rate
The interest rate for a mortgage is very low, are you willing to risk fix rate for a variable rate if the variable rate is super attractive now? This also depends on howlong do you plan to borrow, the tenure of the mortgage. Do you know about refinancing and repricing? How do determine if you need to refinance or reprice?
Many buyers do not question carefully when they hear 1.18% for first 3 years. What do you think of this statement? Please kindly follow up with the question, “Is it FIXED rate?”
Downpayment
Do you pay more or the least possible when deciding how much mortgage you would borrow? There is a few factors deciding this question, which involve funds in CPF, investment amount, mortgage interest rate and the mortgage amount. Will lower your downpayment has an impact on your mortgage interest rate?
Although the maximum loan is 80% but in some situation, the bank will only loan a certain percentage of the purchase price to buyers, due probably to age, income, or the TDSR framework. To decide on how much downpayment is required, the buyer must find out the maximum loan amount and the maximum loan percentage.
Monthly payment and the loan tenure
How much are you comfortable with the monthly payment and should you get a shorter loan tenure or stretch to a 25years tenure? Check with your mortgage institution on any TDSR impact for your loan amount. Recent government measure included the removal of TDSR framework for borrowers buying property with 50% loan or lower.
If you got the FIXED RATE, how long is it fixed? What happens after the fixed rate is over?
If you have the promotion for VARIABLE RATE, how long is the promotion and what happens thereafter?
Other costs
What are the costs involved apart from the agreed purchase price? There are some fees which may apply, like buyer stamp duty, additional buyer stamp duty, certification fees and commissions. Legal fee is necessary payment, look for a law firm that specialised in conveyancing services.
Summary
There are many services available online for interested parties to find out most of the bank packages but is it the most updated? Do you have anyone who is an expert to analyse each and every package to you? Shortlist the best in your opinion, and refer to this post. You should be in good hands. If you need help with Singapore mortgage, contact us.