Research mortgage options before committing to buy property

Those entering the real estate market or renewing a home loan should research mortgage options as this is quite possibly the largest investment decision of their life

research mortgage options

Those entering the real estate market or renewing a mortgage should do their homework and research mortgage options, as this is quite possibly the largest investment decision of their life.

In a recent poll, 38 per cent of respondents said that they spent more time researching their last vacation than their mortgage.

“As housing prices continue to rise, people are borrowing significant amounts of money to purchase a new home or refinance an existing home,” said Mr Paul Ho, Chief Officer at iCompareLoan.

“Everyone should consider their situation and determine how best to find the right mortgage. – research mortgage options. Those thinking about using a mortgage broker should consider rates, service, and flexibility before deciding if that’s the route they want to go.”

If you are engaging a mortgage broker, you should ask how their mortgage broker was being compensated and what types of mortgages they had experience handling. Home loan seekers should know what questions to ask them to fully understand the features, costs and constraints of a recommended mortgage and the mortgage application process.

Research mortgage options to take ownership of the home buying process. Mortgage brokers and agents should help guide you through the complex, and often times, stressful process of getting a mortgage. But you should make sure you work with someone who can provide solutions and has your interests top of mind.

People who are not able to do their own home loan analysis often use a mortgage broker because they provide better rates and because they research mortgage options on the behalf of clients. Good mortgage brokers are identified by the long relationship they have with their customers because of the trust element.

Buyers feeling the pinch as property prices continue to rise

As property prices in Singapore continue to show an upward trend despite the pandemic, many Singaporeans find property prices high, and fewer Singaporeans consider themselves able to afford a property with the current prices and income.

Despite the various property relief measures introduced by the government, including extended support to reduce home loan payments, more Singaporeans feel that the government needs to do more to make housing affordable. The rise in property prices over the last two quarters in 2021 fueled by pent-up demand post-circuit breaker could have prompted Singaporeans to call for further ease in buyer’s stamp duty (BSD) and lowered upfront downpayment costs. One suvey showed that 64% Singaporeans are hoping for the government to lower BSD while 49% are requesting a reduction in the upfront down payment cost for a home.

Many consumers feel inadequate to research mortgage options as they do not have enough knowledge of the different home loans available in the market.

Mr Ho said: “I do not fault the consumers for their home loan financing knowledge gaps. The home loan financing scene is constantly changing with new Government regulations and with global trends on interest rates. This is one big reason why consumers need to work with trusted home loan specialists.”

Choosing home loan financing can be a difficult decision to make given the multitude of factors involved. This is why consumers should use readily accessible mortgage platforms with banking or independent home loan experts that can offer personalised advice and help homeowners navigate through the home loan marketplace every step of the way.

Mr Ho added, “Consumers need not feel overly anxious when they are buying a property if they do some homework and work with trusted hands who are not fly-by-night companies.”

Mortgage brokers are specialists who are well versed with the banking loan process and have access to hundreds of mortgage and loan packages across many banks. Mortgage brokers help property buyers to get the best home loans and home owners to refinance home loans.

In today’s digital age, technological disruption has brought many changes. People no longer call into hotels to book hotel rooms, instead they go to a hotel-room booking site to choose the best matching hotel room.

People no longer sign-in to a specific airlines website to book tickets, people go to airlines booking sites to find the best and cheapest airline ticket.

The same is also gradually coming to dawn on people that rather than going to a specific bank directly, which may or may not give them the best home loan offer at the specific time. Home buyers and owners are going to mortgage brokers who has a purview to all the bank’s packages and can help research mortgage options.

Sure, you can easily walk into the bank and ask for quotes. Most of the time, your property agent would also refer to you a contact at a bank. The point is, does the property agent know which bank package is good for you? How to calculate your loan affordability and interest costs? Do the property agents have the supporting home loan reports to assist you to find the right home loan packages and layout the facts for you?

In Singapore, where we have a good number of local and foreign financial institutions, the choice of a lender and its packages can be mind boggling. Imagine having to compare over hundreds of different loan packages and wondering which is best for you. Even if you are a specialist in finance, it is not so straight forward as there are quite a few variables.

That is where the mortgage broker comes in. The mortgage broker is typically an experienced professional who is familiar with the loan approval process, and having worked with different banks, they know their criteria and what makes the cut. As they are independent, they will also be able to tell you which lender offers the most suitable loan package rather than selling the loan package from the financial institution they represent.

Written by Ravi Chandran

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