Obtaining an HDB Loan for your Purchase

0
72

Before you can apply for a Singapore home loan with Dollarback Mortgage under the HDB program, the borrower must ensure they meet the eligibility requirements. What are these requirements? Before researching the requirements, ensure at least one borrower is a citizen of Singapore. If this condition isn’t met, all others won’t be of importance, as the loan will not be approved.

Household Status

To qualify for an HDB loan, the household must not have obtained two or more housing loans using the HDB program. Furthermore, the program states the borrower must have taken one housing loan from HDB and the last property they owned could not be a local or overseas private residential property. This includes HUDC flats, a property that a person inherited, one received as a gift, or one that was owned, obtained, or disposed of with the help of nominees.

Household Income

The HDB loan program comes with an income ceiling. A family applying for a loan through the program cannot have an average gross monthly household income that exceeds $14,000. If an extended family is buying the property, the amount increases to $21,000. Individuals looking to purchase a property using this type of loan will find their average gross monthly income must be $7,000 or less if they are purchasing a five-room or smaller resale flat. The same holds if they are purchasing a new two-room flat under the Single Singapore Citizen Scheme. This flat must be in a non-mature estate for it to qualify under the program.

Ownership or Interest in the Property

To be eligible for an HDB loan, the borrow cannot have owned or sold a private residential property in the two-and-a-half-year period prior to applying for the loan eligibility letter required under this loan program. This includes properties they have received as a gift or inherited as well as those they owned, received, or sold via nominees. They also cannot own multiple market/hawkers stalls or commercial and industrial properties. Borrowers who own a single market or hawker stall or commercial or industrial property must operate a business from the stall or property. Furthermore, they cannot have additional sources of income.

Remaining Lease

The amount a person can borrow when buying a property under this program varies. This amount remains dependent on the age of the youngest buyer and the lease amount. This amount refers to the money the bank will provide toward the purchase of the property and is a percentage of either the value of the flat or the property’s purchase price.

If the remaining lease is greater than 20 years and will cover the youngest buyer until they are 95 years of age or older, the maximum loan amount is 90 percent. The loan tenure will be 25 years, 65 years minus the buyers’ average age, or the remaining lease at the time of the application minus 20 years. If the remaining lease is more than 20 years and will cover the youngest buyer until before their 95th birthday, the loan-to-value limit is 90 percent. However, the amount depends on how long the lease will cover them until this age.

Many individuals wish to know more about this loan program along with its benefits and drawbacks. An experienced lender becomes of great help in determining which loan program best meets the needs of the buyer, as one size does not fit all in this situation. Don’t hesitate to ask for help. Lenders are more than willing to answer any questions a potential buyer may have.