How Should Emigrants Apply for Housing Loan

There are two types of housing loan packages in Singapore: fixed rates or floating (variable) rates.

Singapore fixed rate packages are noramally tendered for up to 3 years, but there are some lenders that cover up to 5 years fixed rates or even 10 years. This is different from some Western countries where rates can be fixed 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 specified by the respective bank or financial institution. Most lenders attach their board rates to certain financial bech marks such as the SIBOR but the correct constituents are often confusing and variations in board rates tend to be versatile.

There are no limits for emigrants going for housing loans. However, the following components should be considered.

Loan to Value

The maximum loan to value (LTV) in Singapore is 90% of the purchase price or valuation, whichever is lower. Many loaners do not give maximum LTV to emigrants, thus, housing loan packages for 90% financing are limited. Loan approval for 90% funding is also stricter than for LTV 80% and below.

Proof of Income

A letter of appointment from your local employer or your latest income tax assessment is asked for housing loan. Some local loaners do not honor tax assessments from other countries.

Landed Property

Before an emigrant can purchase restricted properties like vacant lot or landed properties such as bungalows, semi-detached, and terrace houses, the commendation from Singapore Land Authority is necessary.

In-principle Approval

You may also look at an in-principle approval before purchasing. Consider of hiring a good and professional housing loan consultant. This may help you save time and money with your loan approval.

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