A Guide for Foreigners Applying for a Home Loan in Singapore
Looking to purchase real estate as a foreigner in Singapore?
As a foreigner, it is possible to invest in a residential property in Singapore. You can do so by taking up packages for a loan offered by several banks.
It is important to note that the Additional Buyer Stamp Duties (ABSD) for foreigners buying a property in Singapore is 15%, on top of the standard 3% Stamp Duty. This additional 15% often compromises the potential return on the property, and usually puts foreigners off buying.
But if you want to get your hands on some real estate in Singapore, there are a few ways foreigners can finance their mortgage with local banks, although the interest will be much higher relative to what is offered to a local or a Singapore PR.
Checking your eligibility for a loan is the first step needed. To be eligible, it is important that you have good credit. Having a good credit score will smoothen the application process.
Next, you will need to prepare some compulsory documents. These documents are:
1. The latest certified true copy of your proof of income (payslips and bank statements for the last 3 months) and 3 years' Notice of Assessment (NOA)
2. A copy of your passport
3. A copy of your NRIC
4. A copy of your property’s Option to Purchase (OTP) or Sales and Purchase Agreement
If you are self-employed, you will need to submit your proof of earnings and net worth statement.
It is important to note that several fees and charges will entail on top of the property’s purchase price.
The Buyer’s Stamp Duty (BSD) is the amount of tax payable upon acquiring a property in Singapore. Properties that are more expensive will receive a higher tax rate.
There are also several considerations to take into account when applying for a home loan.
The In-Principal Approval must be obtained from a bank which indicates the maximum amount of loan that you can borrow and tenure.
The Loan-To-Value Ratio is the amount of mortgage loan you can take up in relation to the property’s market value. The loan value varies depending on whether you have any outstanding loans.
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Post written by Shaun Lee Bryant, Singapore Immigration Specialist
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