Found a house you really like? Before you get carried away, do not be complacent and neglect the importance of getting an approval in-principle for property loans, whether it is in Singapore and Australia or UK, especially with TDSR framework here.
Why you should apply for approval in-principle
a) With an approval in principle of your mortgage loan, you will have an idea of the amount you can borrow and hence the price range you can afford to buy a property. This saves your time and improves the productivity of your real estate agent during the search and negotiation.
b) With a formal commitment of the approved loan amount from the lender, you also can work backwards to estimate the amount of down payment required for your loan. If you have substantial funds, you can either make a larger deposit and borrow lesser, or increase the purchase price. If required, you can liquidate necessary assets when you decide to buy your chosen property.
c) In some cases, home buyers also lose their booking fees just because they couldn’t get a mortgage for financing their purchases. Moreover, the recent Singapore cooling measures on home loans has also led to some people losing their down payments, which could have been avoided with approval in-principle of mortgage loans on hand. Do not assume the credit report of yours and any joint applicants are good. Do not presume that you are doing well within the limits of TDSR. HDB loans are subjected to 30% MSR too.
It’s also possible to obtain pre-approval for mortgages in Australia, UK, Japan and Malaysia. For these countries, multi-currency mortgages and interest rates in different currencies are available. By talking to mortgage consultants early, you are in a better position to determine the right mortgage solutions.
d) With an approval in-principle of property loan in hand, you can immediately make your commitment in buying your house or apartment when you are ready for it. This is a handy tool for negotiation.
In a nut shell, approval in-principle of property loans let you move fast in making commitments at purchasing real estate, prevent you from losing any deposit, and assure you have banks to borrow you the required loan amounts. If you are looking to buy outside Singapore, approval is also available for overseas property loans. As we said at FindaHomeLoan, do not leave home without it. Click on the below links for mortgage options in the following countries and obtain approval in-principle:
Contact us today for the best mortgage advice!