Mortgage Process

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When should we search for bank?

 

Generally, for a 70 % mortgage loan, bank will take 2 to 3 weeks for approval, home buyer will usually apply from bank after signing the provisional sale and purchase agreement.

 

When should we apply for loans on trading up a property?

 

Loan on trading up property is a kind of bridging loan, which refers to the short term loan offered by bank for home owner to transit from the original loan to the new loan. Generally, if the vacant possession date of the original property is later than the new property, home owner may borrow the bridging loan from bank for short term cash flow and repay it after the transaction completion of the original property.

As bridging loan is a kind of personal loan, its interest rate is usually higher than the mortgage rate. Borrower should confirm that the original property must be sold out before application, otherwise, there will be two mortgage loans and a bridging loan at one time.

 

What should be considered before applying Partial / Full Prepayment?

 

There are usually terms and conditions stipulated in the loan agreement that bank will charge the mortgagor a penalty fee if the mortgaged property is redeemed in an early set period (normally one to three years). The penalty fee is usually paid by a certain percentage of the loan amount or a fixed amount, whichever is higher. Penalty rate and period vary from banks, borrower should ask more for details before application.

 

When should we need "Guarantor"?

 

A guarantor is a person who agrees to pay or perform another person's debt or duty if that person should fail to do so himself or herself. The requirement for a guarantor is usually based on bank assessment on the borrower’s repayment ability.