HDB requires buyer get PRIOR Loan approval b4 purchase

[Dennis Ng]

Even HDB finally realised it is WRONG for people to go hunting for HDB flats, whether new flats or resale flats without FIRST getting loan approved either by HDB (if you can qualify for HDB concessionary rate loan) or by Bank (if you need to get a bank loan).

From 1 Jan 2007 onwards, please note that the HDB Loan Eligibility Letter or Bank Loan Approval must be obtained before buyers exercise the Option to Purchase for the HDB flat.

According to estimates, as high as 20% of purchase of HDB flats were subsequently REJECTED due to non-approval of loan by HDB and/or banks. These buyers can be subject to legal suit by sellers because they did not fulfill their legal obligation to COMPLETE the purchase of the property from seller. The seller can sue for damages from buyers.

As I mentioned earlier, it DOES NOT make sense for people to buy a house first (sign an Option to Purchase or Sales & Purchase agreement) without getting a LOAN APPROVED before they do so. They stand the risk of forfeiting their option money (1% of $500,000 is $5,000!) by not getting PRIOR Loan approval.

What should consumers do?
the RIGHT thing for them to do is first get PRIOR bank approval before they start "shopping" (looking) for a property. This is what other more advanced countries such as U.S. and Australia have BEEN practising for MANY, MANY years.

Instead of trying to get "help" from property agents, who are NOT financially trained and NOT in a position to offer value-added advice on home loans; plus the fact that most property agents only work closely with 1 or 2 banks (note: there're 10 financial institutions out there) and LIKELY not able to help you source for the BEST deal in Housing Loans.

Instead, consumers should approach eg. http://www.HousingLoanSG.com. Just one email to info@HousingLoanSG.com or call us at 6737 8801 and we will help you settle everything from there.

What do we do:
1. first we understand your financial situation and help you work out the MAXIMUM loan amount you can qualify for. Thereby, helping you to decide on the maximum budget you want to set for purchase price of property.

2. secondly, from more than 100 different Housing Loan packages from 10 financial institutions, we help you ZOOM down to possibly the TOP 6 packages that are suitable for your needs (eg. penalty period preference; flexibility to make partial repayment etc); thereby saving alot of time (easily 2 to 5 hours compared to you yourself trying to DIY, by checking with different banks yourself. Please note that bank website information might be incorrect and they DO NOT list out all their packages on their website, thus DIY through surfing is likely to be unwise.

3. we help you get PRIOR Bank approval (100% confirmed approval, not in-principle approval which still might be rejected subsequently).

4. if you are negotiating with seller on the price, we can help you by getting from bank approval valuers, a FREE indicative valuation of the property. Sellers might try to sell their properties at as high a price as possible, by having access to FREE valuation figure from approved valuers from us, it can help you in your "bargaining power" in negotiatin with seller.

In the past, we have managed to help buyers cut down the purchase price and saved money anything from $5,000 to $120,000! And this EXTRA value-added service we provide is FREE!

5. We help you appoint a law firm approved by the bank so that you can enjoy legal subsidy from bank. If you appoint a law firm NOT approved by bank, you might have to pay the full legal fee yourself.

We also negotiate with law firms approved by banks for lower legal fees. From past experience, we have managed to CUT DOWN legal fees and helped clients saved money anything from $200 to $900 in legal fees!

6. we provide 7-day support and service. If you call the bank on weekends, you only hear an answering machine informing you bank operating hours are from 9 am to 6 pm on Monday to Fridays. Our trained consultants are reacheable 7 days a week anytime from 9 am to 11 pm everyday including weekends and public holidays! Any email enquires to info@HousingLoanSG.com we answer 7 days a week.

Best thing is the the above extra value-added service is available FREE to you. We're paid by banks separately.

Just one email to info@HousingLoanSG.com or call us at 6737 8801 and we will help you settle everything from there.

[Dennis Ng]

in more advanced countries such as U.S., UK and Australia, consumers are educated to know that it does not make sense to "risk" (commit money) to buy a property without FIRST getting Bank Loan approval. It is inconceiveable to them.

Consumers would typically get PRIOR Bank Loan approval before they shop around for properties. In Singapore, it's the reverse. People paid Option Money on property first, then they start to think about getting a Housing Loan.

The situation is so "worrying" that HDB has finally decided to put it as a NEW rule from 1 Jan 2007 that anybody buying a HDB flat, whether new or resale, need to get Prior Loan approval from HDB (if they qualify for HDB concessionary rate loan) or from Bank before they can Exercise Option to Purchase.

However, for private properties where the price is much higher than HDB flats, without govt coming up with a similar rule, many consumers are still going ahead to buy a property first, before securing Housing Loan. This might seem unbelieveable but it is an "accepted" practice in Singapore. Strange, isn't it?

[snoopy]

Hi Dennis,

Can i check how long does the bank loan approval valid ?
if the approval letter is expired and we still not purchase any HDB,
do we need to re-apply for it ?

Pls advise , thanks.

[Dennis Ng]

Hi Dennis,

Can i check how long does the bank loan approval valid ?
if the approval letter is expired and we still not purchase any HDB,
do we need to re-apply for it ?

Pls advise , thanks.

Hi snoopy,
Bank approval is only valid for 1 month. After 1 month, you need to re-apply, the process will be more straightforward then, since they already have most of your information, they just need you to provide the latest pay slip and the bank would do another Credit Bureau check on you again then.

[snoopy]

OK, thanks for reply Dennis.