How can I get financing for the 20% down payment on my Singapore home mortgage?

Homeownership in Singapore is an uphill battle when it comes to raising the money for the equity or down payment. Your home loan may be secured by real estate, but you must pay the cash portion of the down payment from your own pocket or source of funds. Let’s put it that way. If your loan application qualifies for an 80% loan, you need to find cash and come up with the remaining 20%. In Singapore, you must pay the difference between the purchase price of the home and the approved amount from your own funds under a credit facility. How do you think you can achieve that?

Borrow from your company or employer

It is possible to borrow money from your company. Businesses have the privilege of helping their employees and borrowing the money they need for equity. Some companies are generous enough to loan their employees money with no interest for a few months.

Borrow something from your parents, friends or relatives

Based on the new ruling, you should be cautious about taking out more loans as it will affect your loan application from the bank, specifically the amount approved. At some point, you’ll probably need money that you don’t have on hand. You can contact your parents, family, friends or relatives who can withdraw money for you at short notice and with little or no interest.

CPF Savings

You can see your total CPF savings and make the deposit. If it is not enough, you have to pay the balance in cash. Replenish your balance later when you have paid the amount you had withdrawn from your CPF savings. Buying a home is the largest and possibly longest financial commitment you can have and should be carefully planned before the actual purchase takes place. Your expected approved loan amount depends entirely on your income, existing debt obligations, available savings, and existing expenses.

What can you afford?

To calculate your budget, you need to factor in additional expenses like property taxes, insurance, and some buffer for potential rate hikes. You must pay for these things in cash as you cannot deduct them from your CPF savings. This also includes the fulfillment of your other existing financial obligations, e.g. B. Your ongoing monthly living expenses.

save money

Get your cash savings at your fingertips. You’ll need this to look up your advance payments when you decide to buy your homes. Keep in mind that the CPF savings can only be used on owned or leased properties. Once you have reached the allowed withdrawal limit, you will not be able to use the CPF savings and will have to pay the remaining amount in cash. It’s taboo to tell a seller to wait if you really want the house. Have an immediately available source of money that accounts for about three to six months of your gross income. The loan principal and repayments take up a large portion of your savings and expected income. This is more relevant if you are out there renting a property while waiting for your new home to be ready. The thing is, you need to prepare for the cash flow problems.