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Buying a home in Singapore can be daunting, what with all the paperwork and loan approvals needed. This is especially so for first-timers who aren’t familiar with the process.
I know when my husband and I purchased our BTO, we kept asking around for advice and guidance.
Even for second-time property buyers, it can be a bit of a hassle. And there are just so many abbreviations to remember, such as TDSR and LTV.
Could there be some way to make things easier?
One such helpful resource is the DBS Property Marketplace, a one-stop shop with a home planner to determine your home affordability, listings suited to your budget, as well as a treasure trove of resources and information.
Here are some tools on the DBS Property Marketplace to help you make your property purchase with ease and confidence.
Simple but effective way to work out your budget
The very first thing you’ll see on the DBS Property Marketplace is the MyHome planning tool, which takes only 2-5 minutes to complete.
This useful tool takes away all the guesswork (or “agaration”), and helps you work out the sums for a home that fits your budget and preferences. You’ll get multiple planning options based on your needs, and a detailed report on your home affordability.
For example, since I already have a HDB flat but want to buy a condo with my husband, the home planning tool tells me how much we can afford, what our maximum loan is, our down payment amount, as well as our monthly repayment amount.
Based on my Loan-To-Value limit, our maximum loan is $360,000. If we want to buy a condo as our second property, our down payment on an $800,000 unit is $440,000 (CPF and/or cash $240,000 and cash $200,000). On a loan period of 30 years, each monthly repayment is $1,313 to $1,423.
If you’re a DBS customer, you can log in to your digibank account to save and retrieve your recent property budget, as well as get a more comprehensive report!
Save time on property searches
As you can imagine, being the kiasu Singaporeans we are, we want to look through as many results as possible for maximum options. But analysing each property takes time. Especially when the information-rich listings include maps, agent details, transaction history, nearby MRT/LRT stations, nearby schools and so on.
Wouldn’t it be easier if we could save our search, instead of inputting everything again or physically copying down the listings?
On the DBS Property Marketplace platform, you can search for properties to buy/rent via their location/project name, property type, number of bedrooms, price range, floor area, or exclusive listings… and apply advanced filters such as number of bathrooms, furnishings, and district or nearby MRT/school.
There are 2 search features — “favourite search” and “save search”.
With the “favourite search” feature — just login via digibank and you can save your searches and access them again later. This cuts down the hassle of rekeying in details from scratch, saving you time and effort.
And with the “save search” feature, you can opt to get email alerts from DBS Property Marketplace whenever there are new listings that fit your saved criteria. So there’s no needless checking for updates!
Getting an In-Principle Approval can speed things up
An In-Principle Approval (IPA, sometimes referred to as AIP or Approval In-Principle) is an agreement with a bank. Based on your credit history and financial health, a bank can assess your eligibility and pre-approve your home loan.
BTW, if you bought your BTO through HDB, an IPA is similar to what HDB makes you apply for prior — the HDB Loan Eligibility (HLE) letter.
But do note — there’s no actual loan that takes place when you get an IPA; rather, it’s a guarantee that the bank will extend you the loan when you need it.
An IPA is NOT a commitment that you’ll take up a loan from that bank, so if the interest rate is revised upwards and/or you find a better rate or suddenly inherit a house, you can let the IPA lapse or apply for your home loan through another bank.
It works the other way as well. If your financial situation suddenly changes, the bank reserves the right to reject or cancel your loan application or IPA. So don’t plan major life or job changes when buying a home.
In Singapore, the IPA lasts 30 to 90 days. During this period, you can go house shopping with a clear idea of what’s affordable.
Here are some benefits of getting an IPA:
- It just takes a day or 2 to get an IPA with DBS
- Once you have an IPA, it’s assurance to all parties (bank/property agent/yourself) that you can definitely afford your new home, and that your loan will be approved by the bank
- It’s easier and quicker to find your dream home when you already know what you can afford (and you won’t end up disappointed that you cannot afford a certain property)
About Home Loans
There’s no way that normal Singaporeans like you and me can dish out $500,000 in cold, hard cash at the HDB office. It’s a (super) big-ticket item. So we need to get a home loan.
Compared to a lump sum of $500,000, regular but affordable mortgage repayments over 25 years make it much easier for us to afford our own home.
Some of us go with the HDB home loan (and switch to a bank loan at a lower interest rate after a few years).
Or we can get a home loan from a bank, such as DBS, which offers rates as low as 2.05%* p.a. (fixed), with other perks such as additional interest on your DBS Multiplier Account savings and Home Payment Care protection.
And just as we do our due diligence to ensure we have enough funds to pay for our home, lenders (HDB/banks) will also need to assess our loan eligibility.
*Rates as of 3 June 2020
Pfft! I don’t have an IPA, so what?
Hey, non-believers, don’t take this lightly (unless you are super rich). NOT having an IPA can cost you more than just time. Here are a few scenarios:
Scenario #1 — You realise you cannot afford the home you’ve set your sights on
Disappointment costs nothing, but what if you’ve already paid the booking fee for the property? If you don’t have an IPA, and your home loan request gets rejected later, that’s money (plus time and effort) gone down the drain! Not to mention the sound of tiny hearts breaking, if you already have little ones who’ve fallen in love with their supposed new home.
Scenario #2 — The process is fuzzier
With an IPA, you know exactly what loan amount the bank can offer you. So it’s easy to pick houses that fit this loan amount. However, without an IPA, you’re sort of going in blind. Hmm, nice house. Should I go ahead to “chope” it by paying the booking fee now? Should I reach out to the owner and commit with an Option to Purchase? And can I get my loan approved within a short period? In addition, it’s difficult to have absolute confidence when negotiating. I’m sure your agent would be stressed too.
Scenario #3 — Can’t budget effectively now
Having an IPA helps you plan your budget effectively as you’ll know exactly how much the monthly repayment amount will be. Without an IPA, you just need to guess and hope that you’ll still be able to afford all the luxuries in your life. Sometimes, even $100 can throw you off balance.
Scenario #4 — Where are all the agents?
You want to buy a house, but agents all ghost on you the moment they learn you don’t have an IPA. You see, they don’t want to be in a position where their client (you) cannot accurately figure out which property they want/can afford, and IF the bank will even approve their loan. That’s a lot of extra work for them, and time wasted if everything falls through.
It’s quick and easy to get the DBS IPA
Obtaining an IPA from DBS is a quick and hassle-free process; signing up only takes 10 minutes. There are only 3 steps — provide details, upload documents, and click apply!
Even if you don’t know what documents to prepare, there’s a helpful checklist here. And even if you can’t do everything in one sitting, DBS gives the option to upload the documents later.
The DBS Property Marketplace has all the tools to take me through my property-buying journey, from budgeting to getting an affordable home loan (the interest is lower than HDB’s, actually) PLUS the assurance of an IPA.
Check out the DBS Property Marketplace here.
What else would make your home-buying journey less stressful? Let us know in the comments below!