Why you should get loan approval before paying option money?

[Dennis Ng]

Other than FREE valuation, what we can do for you before you buy a property?

We can help to seure you "bank loan approval" before you commit your money and sign the Option to Purchase. This service is provided FREE to you.

Because there's risk that you might not get the loan that you want and you might be forced to forfeit your option money. eg. a S$500,000 property, forfeiting 1% option money equals to S$5,000 down the drain!

What are the pitfalls of not getting loan approval before you pay option fee??

1. "Loation risk"
Recently, a person approached us for Housing Loan after he already paid option fee. What happened was becos his property is in ?Geylang?, ALL local banks and foreign banks do not want to lend, in the end I think only Hong Leong Finance can lend to him.

He was very shocked as he never knew that ?location? of property can make a difference in loan approval. In the end, he gave up the option and forfeited his 1%.

Actually, it is risky for people to pay option money before getting a bank loan. Other circumstances include:

2. person downgrade HDB flat. However, because downgrade you need to borrow from bank. At the end, the person end up cannot buy a flat because no bank approve his loan as his credit was bad (he was in financial trouble, that?s why he wants to downgrade).

3. person buying lease of less than 60 years. Yes, banks can finance, however, the loan period might be shorter due to the short lease. This person end up not buying becos he can?t afford a shorter loan. Another thing is he does not know that lease of less than 60 years, the CPF withdrawal limit is not 132%, but can be just 60% or less depending on your age and the remaining lease of the property.

4. person rejected loan due to low reported income ? common amongst self-employed.

5. person rejected loan due to high debt-servicing ratio.

All the 5 circumstances above are people who have lost their 1% option fee due to them thinking they can get a bank loan when they could not. I believe that many people out there are unaware of the danger of not getting a loan approved before they sign on the dotted line.

Thus, before you sign on the Option to Purchase, please call us at 6339 9255 or email us at info@HousingLoanSG.com so that we can help you get a loan approval first.

As you might know, we don't charge a fee for our service, we're paid by banks separately. Thus, there's everything to gain and nothing to lose by engaging our service.