Best Loan Type For First Time Buyers

Best Loan Type For First Time Buyers – At Stacked, we get a lot of inquiries about the home buying process, especially from those looking to buy their first apartment. Naturally, this prompted us to decide to create a file

Therefore, in order not to burden you with information, we decided to divide the guide into different parts, which contain articles on topics and issues, for ease of reading:

Best Loan Type For First Time Buyers

In this series, we take you step-by-step through our original content journey. If you’re serious about looking for your first home and equipping yourself with the knowledge you need to make the right decision – this is for you.

First Time Home Buyers Blog Article

. We don’t just mean a dancing persona; What we mean is, carefully assess how much you can afford to spend. In addition to calculating the cash on hand, this also means getting initial approval from the bank.

This is sometimes called approval in principle (IPA) or pre-approval. This is a statement from the bank that tells you how much money the bank can lend you if you want to buy a home within a certain period of time (approval usually ranges from two weeks to 30 days).

For example, an AIP may stipulate that a bank may lend you up to $1.125 million if you purchase a property during the term.

One of the riskiest things you can do is to take out an option to buy (OTP) with an asset deposit before you get your AIP.

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The deposit is usually 1% of the purchase price and must be paid in cash (for example, $15,000 for a $1.5 million property). Remember, this is a down payment

. Imagine putting down $15,000 and then finding out you can’t get a loan big enough to pay for the rest of the house.

In this case, the seller gets to keep the $15,000 and you walk away with nothing.

Also, keep in mind that most one-time payment providers only give you 14 days to use this option, so you’ll have little time to look for a loan.

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When reviewing your AIP application, banks will check your credit score, pull your salary numbers, and all the other things they normally do with a loan application.

Assuming you use the same bank that offered you AIP, all the paperwork is complete. Loans can be approved and disbursed faster (this is one reason many real estate agents and sellers prefer to deal with buyers who have an AIP; they know delays are less likely).

We came across a case where a woman applied for AIP only to find out that her loan was denied. In the end, the culprit was a student credit card I’d been using for almost a decade with a face value of $500.

For whatever reason, the debt on the card was never paid off and the bank took it off, but it showed up as a default on his credit score. This small amount can derail the home loan application process.

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In another case, another buyer was mistakenly identified as the company secretary (he was the company president’s secretary, not the actual company secretary). This interferes with his credit and loan approval.

(Note that, as in other industries, you’ll encounter both competent and incompetent bankers. It’s worth your time to find someone you can trust who will do a good job of providing you with accurate information. AIP.)

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It’s hard to list viable apartments if you don’t know exactly how much you can spend. You may be interested in properties worth hundreds of thousands of dollars that are out of your reach.

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Please note that banks take many aspects into account when processing your loan. For example, if you and your spouse are self-employed (SEP) and jointly earn $10,000 per month, you will actually only receive $7,000.

This is because of the reduction in variable income, which means you can afford a lot less than you think.

(We explain more about mortgage income requirements in this guide – follow Stacked on Facebook for updates.)

You might ask, what do sellers care about? If you don’t get the loan, they keep the deposit, right?

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Your deposit may actually be a very small compensation to the seller of the property. For example, during the two weeks they wait for you to use your one-time password (OTP), they cannot sell the property to anyone else, not even someone who offers $100,000 more than you.

Also, don’t forget that sellers have their own pressing issues. Some of them may rush to sell within six months to get an additional exemption from buyers’ stamp duty (ABSD) – and if your deal falls through and they delay, they could lose 12% of the purchase price of their next home. Of course, if the seller is buying a new home to move into, your deal may fall through.

Because of this, some sellers and real estate agents do not like to negotiate with buyers who do not have an AIP. Even if they do, they may prefer those who have already taken out loans.

First, select the bank from which you want to borrow. There are hundreds of home loan packages available at any given time (we can help with that).

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Alternatively, you can contact your agent (if you have one) to introduce them to a reliable mortgage partner. As mentioned above, in order for the transaction to go smoothly, real estate agents want a mortgage banker they trust to handle your AIP correctly.

If you still prefer to work directly with the bank, after choosing a bank (or banks), you can submit an application form and ask them to review your case. Each bank has its own procedures, but make sure you have your SingPass handy to check CPF, IRAS tax forms, etc.

Note that there is generally no cost to obtain an AIP, except at the time of application. same thing for you

The obligation is to use the bank where you obtained the AIP; However, if you want to use another bank, we recommend you get AIP from them.

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You can start choosing apartments and you can do this when you have a clear idea of ​​what you can afford.

That concludes Part 1 of the Ultimate Home Kit Guide for Your First Home Ownership.

If you want to get updates as soon as the next episode comes out, join our mailing list!

Ryan J. Ryan is an old-school print journalist going digital. He has lived in almost every type of housing in Singapore, from apartments to country houses. For the past 18 years, he has been a content developer for large and small companies, a co-founder of educational projects, and an occasional radio station speaker. He also spent a lot of time and money painting little plastic soldiers.

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My name is Sean and our goal is to help home buyers and sellers in Singapore make the best decisions possible. do you have any questions Email us: hello@

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