Finding the right home is just half the work. But with, POSB Home Loan is a smart choice when purchasing your new home.
You need to shop for the best housing loan to fit your needs. Are you considering various home loans? It is best to compare rates charges.
If you think of applying for POSB Home Loan, you should read on first.
The POSB HBD Loan has a Fixed Deposit Home Rate (FHR18) + 1.58% per annum. Since the monthly amortization is fixed for the first 18 months, you can make a budget or a long term plan for your finances. And if the rate increases, you are assured that the interest rate has a cap at 2.5% p.a. for the first 5 years.
1st Year: FHR18 + 1.58% p.a.
2nd Year: FHR18 + 1.58% p.a.
3rd Year: FHR18 + 1.58% p.a.
4th Year: FHR18 + 1.58% p.a.
5th Year: FHR18 + 1.58% p.a.
Thereafter:FHR18 + 1.58% p.a.
You can borrow up to 80% of the purchase price and handle the remaining 20% cash. If you plan to use your CPF savings, 15% will be settled through CPF. Meanwhile, you must pay in cash the 5%.
How can you purchase a home with POSB Home Loan?
If you want to purchase a private home, you may opt for POSB Home Loan. Ask the bank’s home loan advice specialist before paying the Option Fee and receive Option to Purchase (OTP). After finally choosing which home loan you will take, you will have to submit the OTP, photocopies of your NRIC, proof of stable income and credit cards or other financial commitments.
You must get a Home Loan approval and sign relevant documents. Then, meet the lawyer to sign the OTP. Afterwards, pay the stamp duties and the downpayment. Keep in mind that the more downpayment you take care of, the lesser amount you have to borrow.
In addition, you must sign other Mortgage Documents. Also, include the unfinanced portion of the downpayment and the legal fees. Then, you can collect your home keys and receive a bank letter telling you that your loan has been disbursed. Do not forget to pay the monthly repayment dues.
The home loan service offers interest rates under two packages.
You may choose the Fixed Rate Package with a fixed interest rate for a period or the Floating Rate Package (SIBOR).
The Floating Rate Package will depend on its interest rate based on the Singapore Inter-Bank Lending Rate (SIBOR). The rates are pegged to SIBOR every three months.
SIBOR is the interest rate used by banks when dealing with each other. If it rises, so as your home loan interest rate.
The POSB Renovation Loan is dedicated only to home renovations and legal fees involved during the renovation. You can use this loan for your home’s built-in cabinets, redecorations, wall paintings, flooring and tiling, basic bathroom fittings and even external works within the house’s compound.
The POSB Renovation Loan offers an interest rate of 2.31% p.a. while the Effective Interest Rate is 4.38% p.a. You can borrow up to $30,000or six times as much as your monthly salary. You can even stretch your loan up to 5 years.
Interest rate – Though the advertised interest rate is 2.31% per annum, the Effective Interest Rate is 4.38% a year. It means you have to check how much you will settle in a month carefully.
Do not forget to pay the Handling Fee (1%), Insurance Premium (1%) and tax. If you want to cancel the loan, you have to pay the Cancellation Fee, which is 1% of the remaining total balance. If you opt to settle the loan earlier, you will be penalized with a Prepayment charge of 1%.
Use the loan calculator to assess better whether you can handle the monthly amortization. You will consider the amount you have to pay and the existing financial responsibilities. Seeing the interest rate is the usual major part of choosing a home loan. However, a loan calculator will show the realistic figures you have to pay a month.
Is the POSB Home Loan the best deal for you? When you take an HDB loan, you will not have to pay any prepayment fees, the interest rate is stable, and the maximum downpayment is S$5,000.
Consider the purpose of your loan. For example, if you only want a minor home repair, you can get a personal loan from a legal money lender. Cash Mart is an excellent example. Its loan product and services are more flexible than others.