Condo - Down Payment

[pisces 0]

For purchase a resale condo here is the deal

1) 1% of the purchase price by cheque under the owner name. Ask yr agent to provides u document proof of the owner details. Yr agent will furnish u a copy of Offer to purchase.

2) Once the owner accept yr offer, yr agent will provides u a document called Option of Purchase. Another cheque is require of 4% of the purchase price.

3) Yr banker will get u a lawyer to coordinate the legal issues etc.

In sort, cash involved are 1% + 4% + Stamp Duty (u need to pay upfront but will reimburse after the deal is approved by CPF)

bal 15%(using CPF).

The above is based on 80% loan approval by the bank. For yr case is 1% + 4% + Stamp Duty (cash) and balance 5% by CPF.

Didnt know that now banks giving 90% loan of the property, early of this year for my case is 80%.

Hope this helps. Good luck!!!

Very precise instructions. Thanks.

And oh yes, banks are giving a 90% loan, but of course that is subject to your financial situation.

[therat 18]

Therat,

That's not exactly true. Technically what you say is correct but based on the lending guidelines, what shingirl mentioned is possible.

Example:

To keep it short, assume that after all my liabilties, based on my nett income flow, the bank says that I can borrow say $400,000.00 Loan Quantum.

Typically, the credit guidelines are based on debt servicing ratio (DSR).

On the other hand, I want to take a loan of 60% of the property. Which is 500,000.00.

In this case it is possible because based on the lending guidelines, the risk to the bank is minimal and they could grant. This is an established lending guideline for some banks.

so.. the finial decision still the bank.

If my record is good, the bank might rent me more than their valuation. Am I correct?

[therat 18]

hi,

now i have found my unit. =)

next step.... bank loan............ now im not so concern about being approved or not approved.

There are so many packages in the different bank, im more concern with the difference between them.

So should i walk-in every bank and find out more?

or i can just call then bank up and ask?

had you sign OTP?

u sign w/o getting in-approval principal (hope I get the name correct)?

Just call the bank or write a email to them.

Just remember, don't take board rate. It sucks

[shingirl 0]

had you sign OTP?

u sign w/o getting in-approval principal (hope I get the name correct)?

Just call the bank or write a email to them.

Just remember, don't take board rate. It sucks

Hi...

Yes i had signed the OTP.

I have not gotten the in-principle approval yet but im pretty comfortable because i had set aside cash in case my loan is reduced.

now u said dun take board rate......... so do you mean do not take those rate that is sibor + X.XX% ?????

dbs now having this promo

locking period 2 years

first year is flat rate @ 1.5%, second year onwards is 3 months sibor + 1.35%

what do you advise?

thanks alot........ im a first timer so i do not know much.

[shingirl 0]

sorry......... my OTP = offer to purchase.

Not the option to purchase =P

[therat 18]

Hi...

Yes i had signed the OTP.

I have not gotten the in-principle approval yet but im pretty comfortable because i had set aside cash in case my loan is reduced.

now u said dun take board rate......... so do you mean do not take those rate that is sibor + X.XX% ?????

dbs now having this promo

locking period 2 years

first year is flat rate @ 1.5%, second year onwards is 3 months sibor + 1.35%

what do you advise?

thanks alot........ im a first timer so i do not know much.

Bank has 3 type

1. SOB

2. SIBOR

3. Board rate

1 & 2 is more transparent and base on market rate

3 one basically is up to the bank to adjust.

[Phantom 1]

hi,

now i have found my unit. =)

next step.... bank loan............ now im not so concern about being approved or not approved.

There are so many packages in the different bank, im more concern with the difference between them.

So should i walk-in every bank and find out more?

or i can just call then bank up and ask?

both also can.

[Phantom 1]

Phantom, as long as we take a bank loan , the bank ARE gonna have the last laugh. The banks have only to benefit unless we default and the price of the property decreases....like the US sub prime crisis.

I do not exactly understand your point 1. Why can't i refinance and why can't banks value the porperty ? I am assuming the refinancing option after lock in is over. Appreciate if you could shed some light on your opinion.

What I meant was taking a high loan quantum e.g. 90%. then valuation drops. which alot of people are in at the moment. Hence you can refinance the property to another bank PROVIDED that the you top up the difference to the current valuation.

[Phantom 1]

Very precise instructions. Thanks.

And oh yes, banks are giving a 90% loan, but of course that is subject to your financial situation.

90% loan also means higher interest rates most of the time.

most of the time above 80% loan quantum, banks will increase the interest rates.

[Phantom 1]

so.. the finial decision still the bank.

If my record is good, the bank might rent me more than their valuation. Am I correct?

Every bank has different lending practices. Generally mortgage lending depends on the following

1) Valuation of the property. Different banks might have different valuers who value property differently.

2) Record good? meaning payment? that helps definately.

3) Banks will NEVER lend more than a certain percentage of the valuation. typically at 80% or 90%.

4) If you want to borrow 80% but then 80% = 600,000, and based on the Debt servicing ratio, the bank feels that you can't cope with the installments, then they will only lend lessor.

[Phantom 1]

Hi...

Yes i had signed the OTP.

I have not gotten the in-principle approval yet but im pretty comfortable because i had set aside cash in case my loan is reduced.

now u said dun take board rate......... so do you mean do not take those rate that is sibor + X.XX% ?????

dbs now having this promo

locking period 2 years

first year is flat rate @ 1.5%, second year onwards is 3 months sibor + 1.35%

what do you advise?

thanks alot........ im a first timer so i do not know much.

There's no BEST package. Only the right package.

Example.

Bank A rate is the best, but they value your property at 1m.

Bank B rate is 2nd best but they value your property at 1.3m.

Which is better? Clearly that depends on your situation.

At the same time, have a view on the interest rates.

If you think rates are going to go up in the future, you should prefer a fixed rate interest type of mortgage or a mortgage that doesn't lock you in for too long.

If you think rates are remaining stagnant and/or going down, you should prefer a floating interest type of mortgage.

Legal Fees.

Do you have a lawyer representing you? Using Bank Lawyers? what is the legal fee? and the subsidy?

Clearly you have offered the seller but have yet to sign the option?

Based on the discussion here I believe you don't need to apply for in-principal approval / approval in principal.

Just go straight to apply for the loan. You don't commit yet until the bank approve your application and you sign on the Lettor of Offer from the bank.

Assuming First Property

-Self Employed / Full Commission Earner (2 Years Notice of Assessment)

-Employee (Latest Computerized Payslip)

-IC back and Front

-CPF Statement 6 months

Details of the property

-Name of Development

-Address (including Unit Number)

-Renovation done? e.g. Yes 20k When?

-Buit-in Size (Loft unit?) e.g. 1200sq ft

-Type (Condo/Walkup) e.g. Condo

-Purchase Price e.g. 1.1m

-When TOP. e.g. 2007

-Type of Leasehold (99/999/Freehold)

Details of property will assist the banker in getting you a desktop valuation from the valuers on the bank's panel.

Edited May 26, 2009 by Phantom

[blackcar 0]

Ya get a loan approved in principle before u go hse hunting. My package is Sibor + bank rate, coz the Sibor rite now is quite low and transparent too. U can obtain the Sibor rate thru business times. Those who interested can pm me, i recommend my banker to u. Compare and Compare before u sign up ya.

Good luck!!

[shingirl 0]

hi... thanks for your help.

anyway im shortlisted to 2 packages:

SC

lock in 2 years: first year 1.5% fixed, second yr onwards sibor + 1.35%

Monthly installment will be awarded point just like credit card......

Maybank

lock in 3 yrs.

first year 1.6%

second year 2.6% (if i loan below 70% then 2.2%)

3rd year 2.9%

most likely i will go with maybank....... i shall apply from these 2 banks first and see how. =)

[LingEr 0]

hi all,

i have just bought a resales condo in may... now waiting for my 2nd appt with the lawyer and 3rd appt to collect my key...

i gotten my loan from scb...

Cheers,

[LingEr 0]

90% loan also means higher interest rates most of the time.

most of the time above 80% loan quantum, banks will increase the interest rates.

banks will also charge a higher interest if the QOF is lesser than 80%... for eg, OF at 70% or 60%...

the general better rates are reserved for 80% only...