Housing Loan for Emigrants
Written by Henry Smith on December 2nd, 2009 in Investment.
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. Still, other lenders can cover up to 5 years or 10 years. In many Western countries, fixed rates can be made throughout the loan tenure.
On the other hand, floating rates are 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 published daily. Meanwhile, board rates are defined by the respective bank or financial institution. Most lenders attach their board rates to certain financial benchmarks such as the SIBOR but the correct factors are often confusing and variations in board rates tend to be uncertain.
In general, there are no limitations on emigrants getting 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. Some lenders do not give maximum LTV to emigrants, thus, housing loan packages for 90% financing are restricted. Loan approval for 90% financing 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 asked for housing loan. Tax assessments from some countries may not be respected by the local mortgage lenders.
Landed Property
The commendation from Singapore Land Authority is mandatory before emigrants can purchase restricted properties such as vacant estate or landed properties such as bungalows, semi-detached, and terrace houses.
In-principle Approval
Try to apply for an in-principle approval before moving with a purchase, since loan applications are more intricate for emigrants. Consider of hiring a reputable and professional housing loan consultant. This may help you save time and money with your loan approval.
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