Mortgage loans are like any other amount a bank would lend you; nothing gets any different. The marginal variation is that with a mortgage loan, you’re picking a lump sum of cash for a home development project or setting up a residence for sale or to live in. As such, banks put you through a rigorous vetting process that can seem punitive if it’s your first time.
Mainly, shocks and surprises are in store for numerous mortgage applicants, with most applications hitting a brick wall. To help you get prepared, here are the things banks usually check before pre-approving you for a mortgage loan in Singapore.
1. Proof of Income
Proof of income helps a bank determine whether or not you qualify for a mortgage loan. After all, you’re picking a loan that needs repaying in stipulated spans by all virtue. That could mean a monthly salary or revenue from your business. The income must also be steady and reliable and not indicate signs of instability, especially for business people. Also, you must present proof that you’re servicing your tax and that you have no recurring arrears or evasion cases.
2. Employment Verification
While proof of income is necessary for a mortgage loan pre-approval, you must also get your employment verified to qualify. But before getting much further in your application, you may use some help comparing ideal mortgage rates in Singapore by visiting https://dollarbackmortgage.com/mortgage-loan/. Sometimes, banks need proof of stable employment with a steady income. This qualification shares a nuance with providing proof of income. Still, with employment verification, the lender typically wants to track your employment patterns, how long you commit to a particular position and whether or not you’re consistent enough.
3. Good Credit
It’d help if you had a good credit score for a bank first consider you for a mortgage loan application. A score of nearly 2,000 points puts you in a better position for pre-approval. Banks won’t risk trusting you with money with a bad credit score since you have an incredible chance of defaulting on your loan. However, the native is quite different if your credit score is impressive, and you won’t have to make any down payments, perhaps if that’s applicable.
4. Proof of Assets
Banks need physical proof of your assets for collateral should you default on your loan or deliberately refuse to pay it back. This proof also helps establish if you have the funds for a down payment or the closing costs. The banks must assess the worth of these assets to determine your worth and use it as a basis for comparison for the amount you wish to borrow. It gives them a vague idea of how much you can go in servicing your mortgage.
5. Debt History
A credit score may hint at your debt history but doesn’t indicate the actual transactions and debiting in your financial accounts. If you owe public or private companies or entities, a bad credit score might not tell how much you need to pay back. However, digging deeper helps offer a precise depth of your debt history for them to consider you for a pre-approval mortgage.
Getting a mortgage in Singapore is quite a walk in the park if you can meet all requirements for pre-approval. Therefore, it helps to be more aware to avoid unperceived shocks and disappointments further in your application and help you prepare better.