How to Improve Your Chances of Getting a Mortgage in Singapore

Strengthen Your Financial Profile & Understand the Mortgage Process

Purchasing property in Singapore—whether public or private—requires a clear understanding of the mortgage application process and careful financial planning. Whether you're a Singaporean, Permanent Resident (PR), or foreign investor, establishing a strong financial foundation, knowing loan eligibility requirements, and preparing the necessary documentation can significantly improve your chances of mortgage approval.

This guide outlines the essential strategies and considerations for enhancing your mortgage eligibility in Singapore, especially if you're planning to buy an HDB flat or a private residential property.

Step 1: Establish a Strong Financial Foundation

1. Stable Income & Employment
Banks and financial institutions prioritize applicants with a consistent income stream and stable employment history. Those with at least 6 to 12 months in their current job or industry are viewed as lower risk.

2. Manage Existing Debt
Reducing outstanding debts such as personal loans or credit card balances will improve your Debt-to-Income (DTI) ratio, increasing your creditworthiness in the eyes of lenders.

3. Maintain a Healthy Credit Score
A good credit score—based on your repayment history and credit behavior—is vital. Foreign buyers, in particular, should ensure their international credit records are accessible if they don’t yet have a local score.

4. Accumulate Sufficient Savings
Prepare enough funds to cover the minimum down payment (5% to 25%, depending on the property type and loan type), Buyer’s Stamp Duty, legal fees, and other miscellaneous costs.

Step 2: Understand the Mortgage Application Process

1. Get an In-Principle Approval (IPA)
Before beginning your property search, obtain an IPA from a licensed bank. This document reflects the maximum loan amount you are eligible for and ensures you do not exceed your financial means.

2. Compare Loan Packages
Not all mortgages are the same. Compare interest rates (fixed vs. floating), lock-in periods, and repayment flexibility across banks to select the most cost-effective option.

3. Prepare Required Documents
Typical documents for mortgage processing include:

• NRIC or Passport (for foreigners)

• CPF contribution history (for locals and PRs)

• Payslips (past 3–6 months)

• IRAS Notice of Assessment (NOA)

• Option to Purchase (OTP) or Sale & Purchase Agreement

4. Hire a Conveyancing Lawyer
For legal documentation, title verification, and fund disbursement, engaging a qualified conveyancing lawyer is essential.

Step 3: HDB vs Bank Loan Considerations

1. HDB Loan Eligibility
For those buying public housing, eligibility for an HDB loan is determined by:

• Citizenship (at least one applicant must be Singaporean)

• Household income ceiling (up to S$14,000/month for families)

• No private property ownership within the past 30 months

2. Bank Loan Specifics
If opting for a bank loan:

• Loan-to-Value (LTV) Limit: Max 75% of property value (if no outstanding home loans)

• Mortgage Servicing Ratio (MSR): For HDB and EC purchases, monthly repayment must not exceed 30% of gross monthly income

• Total Debt Servicing Ratio (TDSR): Overall debt repayments cannot exceed 55% of gross income

Step 4: Leverage Expert Support & Digital Tools

1. Mortgage Brokers
Mortgage brokers offer a holistic view of the loan market, helping borrowers identify suitable packages, submit paperwork, and negotiate rates—often at no additional cost.

2. Online Planning Tools
Utilize planning calculators like DBS MyHome Planner or OCBC OneAdvisor to assess affordability, simulate loan repayments, and visualize ownership timelines.

Algene Toh

Senior Real Estate Salesperson

Asset Investment Brokers Pte Ltd

Email: admin@bsr2.com

Phone: +65 9008 8002

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