Applying for a mortgage can be one of the most exciting parts of the property purchasing process. It is the moment where you are preparing to make your dreams a reality and take one step closer to becoming a homeowner. However, it is vital that you get all of your ducks in a line before then. Here are some of the things you need to sort out before you begin to apply for a mortgage.
Where You Want to Live
Singapore is a big place, and you need to make sure that you pick a district before you decide to apply for a mortgage. This will give you the chance to work out exactly how much you are going to need to borrow too. Not all apartments or houses cost the same, so you need to make sure that you are looking in a neighbourhood that you know you can afford.
If it is one that you don’t know so well, take the time to get to know it a little better. One of the best things about Singapore is how vibrant and different each of the districts can be, so you need to make sure that you are going to feel at home in the one that catches your eye. Finding out how much the properties are and what the average cost of living is in the area should give you a realistic understanding of how much you are going to have to save and spend.
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The Loan Provider
You shouldn’t just go for the first type of loan that you see. There is so much to consider when applying for a home loan, so you need to ensure that you are going to a company that wants you to get the most for your money. Do your research, and make sure that you choose a bank or loan provider who will give you what you need in terms of an interest rate and a repayment scheme.
For example, you might think that you want to opt for a DBS home loan. However, there are several that they offer. It is not as simple as just applying for the one loan. You should make sure to investigate each type of loan that they offer so you can be certain that you have applied for the right one to meet your needs.
One of the most important parts of applying for a mortgage will be getting the deposit together. This is the part of the house cost that you pay upfront, and the lender will give you the rest of the money as the mortgage.
You have two options with deposits. The typical amount for a deposit tends to be around 10% of the property’s value. This is what most people tend to aim for when they are searching for somewhere. However, you can also choose to pay a higher deposit and therefore take out a lower mortgage. If you are able to pay, for example, 25% of the property upfront, you are not going to need as large a mortgage as someone who would only have a deposit of 10%. This then means that your monthly repayments will be much smaller than they otherwise would be. You could also choose a shorter repayment schedule, which means that the property would be yours a lot sooner.
The banks are not just going to give a mortgage to anyone. They ideally want to see that you have a proven history of being a good spender. This means that you need to ensure that you have a good credit score before you think about applying for a mortgage.
If you have a bad credit score, you might want to think about some of the steps that you can take to boost it. This could take some serious work, plus maybe a rethink in your spending habits, but it will be worth it overall. Your credit score can affect so many parts of your life, so take a desire to get a mortgage as a good motivator to sort things out.
Apply for a Mortgage the Right Way
It can be tempting to jump the gun and apply for the first mortgage you come across, but there is a high chance that this might not happen in quite the way you want it to. Applying too soon could mean that you are underprepared, and so there is less of a chance that you will be able to sort things out.
Take the time to organise everything you need and find a mortgage that really works in your favour. After all, there are so many properties out there on the market. It is always going to be better to sort your finances out instead of trying to rush through!