New home buyer always feel perplex by the huge amount of paperwork that is involved when applying for a home loan. They are not alone, because seasoned buyers feel the same ...
By: Zeng Han Jun, CPCG, Singapore
New home buyer always feel perplex by the huge amount of paperwork that is involved when applying for a home loan. They are not alone, because seasoned buyers feel the same way too when refinancing. Still, in order to successfully purchase that dream house and start a whole new life, you will have to tackle that housing loan. Remember that the lenders are the ones who will eventually make or break your dream as they are the ones who will approve or disapprove your housing loan. There are a few things to take extra care of, when applying for that loan. They are: 1) The sale agreement, 2) Your personal information, 3) Your employment history, 4) Your financial information
The Sales Agreement
One of the most important pieces of document that is required for your housing loan application. A lender can determine details of the property that you are planning to buy, from that piece of document. From that agreement, your lender will then determine the asset price of the property and use it as one of the factors in determining how much will they lend to you.
Your Personal Information
As usual, you will have to provide information such as your name, date of birth, gender and etc. Most probably, you may have to provide information such as the number of dependents that you have, your present level of education and etc. You may find it strange that you have to provide so much information which you may deemed as irrelevant to the purchase of your house. However, the banks, after long years of operations, have work out a formula which includes all these information to determine if you are a good credit risk. Without all these information, they will not be able to process your loan properly.
Your Financial Information
It is never just about how much you earn. More importantly, it is about how much you spend relative to how much you earn. You will have to fill in details about the different kinds of credit facilities that you may own. The kinds of credit facilities that you may own could be: credit cards, personal loans, education loans, car loans, housing loans, renovation loans and etc. Some of your credit facilities may be on revolving terms and a good example of it is a credit card. You may not use that credit card often and think of not filling that in, because you feel that its inclusion may decrease your credit profile. Just include it and state how much of it do you use per month. Honesty is always a factor highly valued during loan applications.
Your Employment History
Your lenders will want to know if you are still gainfully employed and if you will be able to meet the monthly installment payments. Certain professions are also looked upon favorably by your lenders and is a plus when applying for that home loan. You will be require to fill up this information in the application form and it will also be reflected when you submit it together with your CPF contribution history. The worst thing to do is to cheat on your lenders and lie to them that you are still employed when you are not. You may not be able to meet the monthly housing payment with the decrease in your income cash flow and that may prompt them to do a foreclosure on your new house. A foreclosure is never beneficial for both your lender and you.
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