FAQ for Commercial/ Industrial Loan
One of the first steps to take in buying a property is getting the mortgage process started. The borrower can use our free comparison website to compare competitive rates and to look out for promotional tie-ups with lenders for preferential interest rates. Do not get pressured by property agents to put down any deposit for the purchase. Instead, get an IPA (In-Principal Approval) as purchasers often have to forfeit their deposits due to the rejection of mortgage loan or reduced quantum.
A typical option to purchase (OTP) has to be exercised within 14 days, failing which the option fee will be forfeited (usually 1-5% of purchase price).
Depending on the purchase price, typically the amount to be prepared is as indicated below:
• Upon exercise of the OTP, you would usually be required to pay 5-10% of the purchase price (excl. option fee) as a down payment.
• If this is your first property for which you are taking up a loan, you can pay up to 75% of the purchase price with your loan.
• If this is your 2nd Property, the loan to value drops to 45%.
• If this is your third or subsequent property, the loan to value drops to 35%
• Stamp Duty -
|On or after 20 Feb 2018|
|Purchase Price or Market Value of the Property||BSD Rates for residential properties||BSD Rates for non-residential properties|
• Additional Stamp Duty if applicable
• Conveyance Fee (No Legal subsidy for new purchase as per MAS guidelines, while refinancing can enjoy legal subsidy from certain lenders - typically ranged between $1,500- $3,000)
• Valuation Fee (No Valuation Subsidy for new purchase as per MAS guidelines, while refinancing can enjoy valuation subsidy from certain lenders - typically up to $500)
• Fire Insurance Note that for any new launches with cash rebates or incentives such as renovation or furniture, banks will typically factor in the rebate into the purchase price resulting in a lower approving amount.
Most Banks offer up to 20 or 30 years tenure to purchase the property.
For equity cash out using private property. the loan tenure for lenders such as ORIX, ETHOZ or ValueMax will be much shorter (10-15 years), but they may be able to offer terms and conditions such as interest-only loan and without TDSR guideline.
Nobody likes to purchase a property above market valuation as any difference in the amount will need to be topped up in cash by the borrower. Most mortgage bankers will be able to give an indicative valuation provided by reputable valuers. Alternatively, you can email us at firstname.lastname@example.org and we will get the indicative valuation for you in an instant. Please note that an indicative valuation is not legally binding.
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