Is DBS Home Loan the Best Deal For Your First Home?
Looking for your first home gives you a sense of adulthood.
And choosing the right home loan gives you the sense of being financially responsible.
There are two ways that a home loan can affect your life. For one, you will use it to finally get your home. This is one of the most important achievements in your adulthood. Also, a home loan can bring a critical blow in your finances if you are not careful with choosing the right one.
Banks can see how we rave to get our homes as soon as we can. Now, they are offering a lot of options and this includes DBS home loans. DBS has four housing loan products for various purposes. Can a DBS home loan give the best deal for your first home?
DBS Home Loan Eligibility
DBS offers home loans to Singaporeans and Permanent Residents of legal age but not older than 65 years old upon the maturity of the loan. This loan is not only for first time home owners only.
Borrowers may be an HDB owner with existing home loans from other banks/financial institutions or from Housing Development Board. Owners of a new HDB homes with finished flats can apply too.
DBS Home Loan Documents Required
Just like the other banks, DBS is strict with the required paperwork. It may be tedious, but this gives the bank the ability to know your creditworthiness.
For employed, you will need to present a photocopy of your NRIC (front and bank) and your computerized payslips for the past three months. You may also need your Notice of assessment and your CPF statements for the past three months.
If you are a self-employed, you will need to present a clear photocopy of your NRIC and the last two years’ Notice of assessment. You may also present your last 15 months’ CPF statement. This is to prove that your business is indeed thriving.
In case that you are a foreigner, you’ll need your passport, valid Employment Pass, and your computerized salary slips for past 3 months.
DBS Private Property Home Loan
Take note that there are three types of interest rates in DBS Private Property Home Loan. The Floating Rate Package (FHR9) pertains to the prevailing 9 months Singapore dollar fixed deposit interest rate for amounts within S$1,000 to S$9,999.
The Fixed Rate Package, on the other hand, is a fixed rate for a number of years. After a certain period, the interest rate will be increased by 1.55% p.a.
So how does it work?
DBS Home Loan Private Property Checklist for Resale Properties
- Find a home you want to buy. Contact a DBS Home Advice Specialist and check your loan eligibility. Pay Option Fee with the seller which could be 1% of purchase price or up to $1000 in cash. Secure an Option to Purchase (OTP).
- Then, apply for a loan. Receive Loans Factsheet accompanied with instructions via email. Choose your ideal home loan package before sending the required documents to your DBS Home Advice Specialist or Relationship Manager.
- Accept the approve loan. Sign Letter of Offer and other related documents.
- After getting your loan approved, you need to meet with the bank’s lawyer to finally sign the OTP. Pay the relevant Stamp Duty in cash and the remaining 15% downpayment which is not covered by the DBS Home Loan.
- Sign the mortgage documents at lawyer’s office. If there is any remaining balance for the downpayment, this is the time to settle it. You may also use your CPF savings if applicable. Take note that you will also have to pay the legal fees.
- Collect the keys from the seller and receive a bank letter on loan disbursement and monthly instalment amount.
- You can now move in. Ensure that you diligently pay your monthly instalments to prevent any financial problems.
Refinancing Private Property
There are times when you might realize that you have bitten more than you can chew. Or simply you can’t handle your current home loan in another financial institution.
DBS offers to refinance private properties. You have to make sure that the home loan’s lock in period has already expired before you apply for a refinancing. DBS will take the time and review your needs and current financial status before recommending a loan.
A Home Loan Specialist will help with your loan approval and a DBS lawyer will start the process. Take note that you might be required to pay the legal fees involved. If your refinancing home loan gets approved, you need to repay the monthly instalments diligently.
Buying HDB Flat
You can use a DBS home loan to buy HDB Resale Flats and BTO (Build-To-Order) Flats. This means that whether the flat is preowned or not, you can acquire it with this type of loan. While this loan boasts of its lower interest rate than the HDB Concessionary Loan, it only covers up to 80% of the property’s market value. HDB Concessionary Loan covers 90% of the property value.
HDB Concessionary Loan also does not require any cash downpayment, unlike DBS which require at least 5% cash payment and 15% CPF.
DBS Renovation Loan
Renovation loan has specific purposes. It is strictly only for the home’s renovations such as structural alterations, flooring and tiling, painting and redecorating works, basic bathroom fittings, and electrical and wiring works.
The maximum amount you can borrow is S$30,000 which can be paid up to five years. The applicant must be the property owner or the immediate family member
- Handling Fee is charged at 1% of approved loan amount
- Insurance Premium is 1% of approved loan amount.
- There is a cancellation fee of 1% of approved amount should you change your mind.
- Pre-payment fee is 1% of outstanding loan amount.
As a first time home buyer, you must realize that there is more to consider other than the interest rate on home loans. You need to read the term and conditions as well as the fees and charges.
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