Buying a new home is probably one of the biggest financial commitments you will make in your life. With the cooling measures implemented in the last two years, many Singaporeans are still confused by the new regulations. Here at GET.com, we hope to make the home-buying process a little easier with this step-by-step home buying guide for first-time buyers in Singapore.

In this Home Buying guide:
Step 1: Check your eligibility and the affordability of the property
Step 2: Obtain an Approval-In-Principle Approval from the bank
Step 3: Search for your ideal property
Step 4: Make an offer for the property you want
Step 5: Decide on your home loan
Step 6: Finalise your loan application
Step 7: Appoint a Lawyer
Step 8: Formal valuation of property
Step 9: Completion of your property purchase

Step 1: Check your eligibility and the affordability of the property

You will first need to check your eligibility first before buying either a HDB flat or private property.

Here is a checklist of what you need to check for eligibility:

1. Citizenship
2. Family Nucleus
3. Age
4. Income Ceiling
5. Ownership in other properties

Step 2: Obtain an Approval-In-Principle Approval from the bank

An approval-in-principle (AIP) is a conditional approval for your home loan.

One of the most important function of the AIP is that it gives you an idea of the loan quantum you are eligible for and the amount you need to pay monthly.

This helps you to filter a property that you can afford and not waste time viewing the ones that are out of your budget.

Step 3: Search for your ideal property

Now that you know how much you can borrow, you can continue your search for your dream home. Spend some time considering the property's location, type, size, price and affordability.

Step 4: Make an offer for the property you want

Once you've found an interesting property make an offer. Don't act too excited so that the agent doesn't hike up the price. Keep your cool and check other similar properties in the market to get a good idea of the prices. Once you have a price in mind, try to push it slightly lower than what you're willing to pay. It helps to make your offer in writing.

Step 5: Decide on your home loan

This is when you need to have an idea of the different kinds of home loans available.

In the current rising rates environment, you might want to consider getting a fixed rate loan to lock in the first few years and refinance after this period.

It does not mean the lowest interest rate loan is the best; this will be too easy as everyone will just choose the same loan!

Consider the conditions of the loan as well, such as the lock-in period, the clawback on reimbursement as well as whether it comes with any free repricing package!

The last condition is important if you are considering any repricing or refinancing after your lock-in period.

Step 6: Finalise your loan application

There are many documents and paperwork to prepare when taking a mortgage loan. Having a clean credit history definitely helps!

This is when you will be grateful for paying your credit card bills promptly. Any doubts that the bank has on your creditworthiness can affect the amount of loan you can borrow.

You can get a copy of your credit report from Credit Bureau Singapore, but it is not necessary if you have a clean credit history.

Other documents required include:

- CPF contribution for the last 12-15 months
- Current CPF Ordinary Account statement
- Last month payslip
- HDB status showing that you do not own any HDB property
- IRAS status showing you did not pay property tax
- Last notice of assessment from IRAS
- Scanned copy of NRIC
- Scanned copy of the Offer-to-purchase
- Bank loan application form,
- MAS declaration on credit
- Signed copy of Property Loan fact sheet

Step 7: Appoint a Lawyer

You would need to engage a lawyer to act for you and the bank on your conveyancing matter for your home purchase and mortgage loan.

Your lawyer will exercise the option-to-purchase agreement, advise the necessary legal matters, conduct title search, bankruptcy search, legal requisition checks, pay stamp duties to IRAS, prepare mortgage documents, act and liaise with bank, CPF Board and seller's lawyer with regards to your home purchase.

Legal fees usually cost between S$1750 to S$5000, depending on factors such as property type and choice of lawyer.

Step 8: Formal valuation of property

The bank will appoint a valuer for a formal inspection of the property. You may need to inform the seller or the housing agent to allow the valuers access to the property for inspection. This usually costs between $100 to $200.

Step 9: Completion of your property purchase

Upon the date of completion of your property purchase, your lawyer will call for the release of bank finances payable to the seller's lawyer.

Get ready to collect the keys to your new home!

New & Refinance Home Loans in Singapore

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