Tips for Emigrants Applying a Housing Loan

There are two types of housing loan packages in Singapore: fixed rates or floating (variable) rates.

Fixed rates are sometimes offered for up to 3 years. However, other lenders can cover up to 5 years or 10 years. In many Western countries, fixed rates can be made throughout the loan tenure.

Floating rates can be classified into published rates or board rates. Like Singapore Interbank Offered Rate (SIBOR) or Singapore Swap Offer Rate (SOR), published rates are normally rates that are released daily. Meanwhile, board rates are set by the respective bank or financial institution. Many of the lenders laid their board rates to a particular financial benchmarks, yet the direct constituents are sometimes not clear and variations in board rates become uncertain.

In general, there are no limitations on emigrants starting housing loans in Singapore but do pay attention of the following.

Loan to Value

In Singapore, the maximum loan to value (LTV) is 90% of the purchase price or valuation, whichever is smaller. Housing loan packages for 90% financing are limited as some loaners do not offer maximum LTV to emigrants. Loan approval for 90% funding is also tighter than for LTV 80% and below.

Income Proof

A letter of appointment from your local employer or your latest income tax assessment is necessary for housing loan. Tax assessments from some countries may not be esteemed by the local mortgage loaners.

Landed Property

Before an emigrant can purchase restricted properties like vacant lot or landed properties such as bungalows, semi-detached, and terrace houses, the commendation from Singapore Land Authority is essential.

In-principle Approval

You may also consider an in-principle approval before buying. Consider to hire a good and professional housing loan consultant. This may help you save time and money with your loan approval.

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