Owning a property in the 21st century is considered a milestone by many. The reason is simple; the prices can reach the stars in the coming years. All thanks to the ever-growing human population and limited space on earth, house prices are never going to go down. One of the first investments any young adult makes is to buy a house of their own. Naturally, not everyone has enough cash on their hands to buy a home, so they resort to home loans.
But taking a home loan is a critical step. One must adhere to some crucial tips before deciding to take a home loan.
Before taking a home loan, judge the bank’s down payment requirements. Depending on the bank or the lender, the down payment can generally range from 10% to 25%. Assess whether your budget can support the down payment and only then decide to go ahead with the loan process.
Interest rates are very crucial as the right ones might help you save a lot of money. In comparison with the property prices, the interest rates may not seem like a lot. But you’ll be surprised to know how much you would have to pay at the end of the loan repayment. Due to fluctuations in the market prices, interest rates are almost always changing. However, they tend to lie between 0.80% and 2.50% in Singapore. Currently, the bank rates for home loan singapore are between 0.80% and 1.80%.
Types Of Interest Rates
There are two types of interest rates that are made available in Singapore.
- Fixed Interest Rates; fixed for the entire duration of the loan agreement.
- Floating Interest Rates; fluctuate due to price volatility in the market.
Only choose that type of interest rate that agrees with your financial condition.
The Lock-In Period
Usually, when a bank gives out a home loan, they specify a lock-in period. In this period, which can generally be between zero to five years, the bank is liable is collect penalty fees if you decide to cancel the home loan or pay the entire loan at once.
For a home loan singapore, it is recommended to avoid the banks with this provision, or consider only those with the lowest penalty periods and fees, to avoid any complications in the future.
Taking a home loan is no joke. One must compare different bank loan offers, assess your financial situation, to name a few. The above tips are crucial points that you must keep in mind while choosing the bank loan for your dream home in Singapore.