When you are somewhere while selling your old property and upgrade to a new one, you blindly trust on hdb bridging loan singapore. This bridging loan will help you cover up the monetary gap whose fulfillment is required to get your new property. While waiting for sale proceeds, this bridging loan can be used to cover up the down payment and other expenses related to the property transaction. Be it an upgrade or downgrade in property, bridging loans will help you meet all your needs.
Categories of bridging loans
There are two types of bridging loans provided in Singapore. The first type is termed as capitalized interest where the entire amount required for your new home is covered, while the repayments shall only initiate after your old home is sold. The second one being simultaneous repayment where you repay your home loan alongside bridging loans.
Eligibility for bridging loans
Not to confuse bridging loans with normal home loans. With bridging loans you can borrow up to 25% of the purchase price of your new property provided the fact that you will have enough from the sale proceeds of your old property. All permanent Singapore citizens and even foreigners who are willing to sell their property are eligible for hdb bridging loan singapore. The chief criteria for your eligibility also involve a good credit score. For the agreement, you need to also produce your Option to Purchase (OTP) document that states your right to purchase the said property. CPF withdrawal statements and outstanding bank loan statements may also be asked.
Things to keep in mind.
- Bridging loan interests are much higher (usually 5-6% p.a.) when compared to that of standard home loans.
- Before applying for such loans one must be aware of miscalculations. They shouldn’t overestimate the price of their current property.
- Your current property will be used as a form of security by the bank for your loan repayment.
- This form of borrowing is usually categorized as short term, so one should be aware of repayment in time.