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Thread: Can home loans bridge the gap between financial dreams and reality?

  1. #1
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    Default Can home loans bridge the gap between financial dreams and reality?

    http://business.asiaone.com/property...ms-and-reality

    Can home loans bridge the gap between financial dreams and reality?

    iMoney

    Wednesday, Mar 05, 2014


    Picture this - You are in the midst of an incredibly financially delicate decision of selling your old property and purchasing the dream home you always strived for; however, you got so caught up in the excitement that you didn't see the brick wall that is stubbornly guarding the road to your dream home.

    The brick wall in this case, turns out to be your inability to put together the required downpayment for it because the sale of your old property can't quite cut it to help you make it. To make it worse, the bank is throwing another wrench in your plans by refusing to extend the mortgage handed out by them that you have already exhausted.

    So what do you do now, troubled Singaporean? Perhaps you can consider a bridging loan.

    A bridging loan is a short-term financial product that is primarily utilized for funding property assets. It can help overcome the monetary gap preventing you from attaining your dream home.

    Bridging loans could also be an option for homeowners who wish to renovate their properties as they await approval for their mortgage applications.

    Everything You Need to Know About Taking a Bridging Home Loan

    A bridging home loan can allow one to successfully finance a new property purchase under the condition that repayment happens within a fixed short term period. These loans tend to have a repayment tenure of approximately 6 months.

    You can present the Option to Purchase to successfully acquire the bridging loan to fund your new property. Usually, both the mortgage loan and bridging loan are made available by the same lender in order to facilitate a smooth financial procedure.

    In case you're wondering what formalities and nuances are involved in taking a bridging home loan, here is an easy step-by-step breakdown of the whole process:

    • Present policy dictates that you can only pay 70 per cent of the property value via loan money. Apart from that, you need to make a mandatory 10 per cent cash downpayment along with another 20 per cent in cash or CPF.

    • To get an 80 per cent property loan amount approval, you must take an appointment with the HDB to get a letter that you must present during the property transaction in order to grant the HDB sale.

    • In order to lock in your bridge home loan, you must also acquire a signed exercised option to purchase provided by your buyer of HDB flat. Additionally, you must also have 1 per cent option money, 4 per cent exercise money, and 3 per cent money for stamp duty.

    Dissecting the Two Types of Bridging Home Loans

    The two primary forms of bridging loans granted to Singaporean property buyers are:

    a) Capitalized interest bridging loan

    b) Simultaneous repayment bridging loan

    In the first case, bridging loans are approved to finance the entire amount of your new home. However, your repayment period is only activated once you finish selling off your previous property.

    Over this period (6 months), there is an accrued interest on your principal loan amount that is supplemented with the principal loan when your repayments officially start.

    In the second case, your bridging loan compels you to make repayments simultaneously for your new and existing loans. This scheme gives you an extended leeway of 12 months to sell off your old property. However, it will require proof of your financial commitment to repayments during this period.

    There are a few lenders that will generously let you simply complete the interest repayments during the bridging period to avoid putting excessive financial stress on you. You must also watch out for restrictions related to the total number of lump sum repayments.

  2. #2
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    Quote Originally Posted by reporter2 View Post
    http://business.asiaone.com/property...ms-and-reality

    Can home loans bridge the gap between financial dreams and reality?

    iMoney

    Wednesday, Mar 05, 2014


    Picture this - You are in the midst of an incredibly financially delicate decision of selling your old property and purchasing the dream home you always strived for; however, you got so caught up in the excitement that you didn't see the brick wall t.
    Control Measure 8 - Bridging loan Ban.

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