Must-Know Facts About POSB Home Loans
Shopping for a home loan? Well, the fact that you are reading this article means you are planning to take a home loan. The question is…
“Where can I apply to take a home loan?”
Many financial institutions are nestled in Singapore, offering various loans including home loans. And one of these institutions is the POSB or the Post Office Savings Bank. Among all banks, POSB is the oldest local bank in the country.
Over decades, POSB has proven its reputation when it comes to loans. and in this article, you’ll gather information about why is it worth taking a home loan from POSB.
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How To Get A POSB Home Loans Singapore
Purchasing property needs deep planning and understanding of your financial situation. And what you should consider most is your affordability to buy one.
The great thing is, POSB can help you decide on their home loan services. But before that, you might need to know some facts about how to get a POSB Home Loan.
POSB Home Loan Eligibility Requirement
Qualifying for POSB Home Loan needs to, first, meet the eligibility requirements.
You will only become eligible if you’re a Singaporean citizen or a Permanent Resident. Plus, you should be 21 years old and above but not more than 65 years old. And addition to that, the applicant should be earning at least S$30,000 and above.
All mentioned requirements are vital. However, POSB doesn’t only really on it. The bank has other bases to verify how eligible you are to get a home loan.
POSB Home Loan Required Documents
Once you get approval, the next thing you’ll do is submit the required documents.
Listed below are the documents you need to comply with to qualify for a POSB Home Loan:
- A copy of NRIC (National Registration Identity Card) – Only applies to a Singaporean Citizen/Permanent Resident.
- Passport (for foreigners)
- HDB Flat and Financial Information
- Option to Purchase
- Sales and Purchase Agreement
- Value confirmed by HDB (for HDB resale)
- Valuation report (for Private Property and Executive Condominium)
After submitting your requirements, you can now wait for approval. Once you’re approved, you will then sign the Letter of Offer.
POSB Home Loans Packages and Interest Rate
As mentioned, POSB offers a wide range of Home Loans products. You can choose from the following packages:
- 2 Year Fixed Rate Package
- 3 Year Fixed-Flexi Package
- 5 Year Fixed-Flexi Rate Package
All these three packages are valid with a minimum loan amount of S$100,000 but vary in interest rates.
2 Year Fixed Rate Package
In this package, the interest rate for your first two years will be 1.50% per annum. After your second year, the interest will be FHR24 + 0.90% per annum.
FHR24 refers to the DBS Bank’s prevailing 24 months Singapore Dollar fixed deposit rate in which the amount is between S$1,000 and S$9,999. For now, the current rate is at 0.900% per annum.
Another thing is that this package comes with a 1 FREE conversion after 24 months from the first disbursement. This way, it will give you an option to reprice your home loan at no cost.
3 Year Fixed-Flexi Package
For this package, the interest rate, in this package is 1.50% per annum from YEAR 1 to YEAR 3. It’s the same as the first package except that it is payable for three years. After that, it’ll be FHR24 + 0.90% per annum.
It also comes with 1 FREE conversion. However, unlike the two-year package, it’s after 18 months from the disbursement. You can also have an option to reprice your home loan at no cost.
But take note that if you sell your property during the locked-in period, there will be a Waiver of Commitment Fee. This will allow you to not worry about the additional cost upon selling the property.
5 Year Fixed-Flexi Rate Package
The same with the latter two, the interest rate will be at 1.50% per annum from YEAR 1 to YEAR 5 and will be at FHR24 + 0.90% per annum thereafter.
But unlike the first two packages, this package doesn’t come with a free conversion.
Using the POSB Home Loans Home Planner and Calculator
To let you know how much budget you’ll be needing, you can use the POSB Home Planner and Calculator. This way, you can measure your affordability. Also, you won’t feel any pressure in deciding how much home loan you will be needing in purchasing a property.
What are the POSB Home Loan Fees?
Getting a home loan, either with lock-in or lock-in, will be no fees applicable to the process. However, unless you reject the loan after accepting the Letter of Offer, you will be charged 0.75% of the undisbursed loan amount.
There will be an overdue interest of 5% above the DBS Prime Rate for late payments. And when you repay part or full pay your loan, there will be a fee of 1.50% interest on the amount repaid. This fee will apply only to the loans with lock-in.
Add to that, POSB Home loans also have legal fees, valuation fees, and an insurance premium (charged by external providers).
There will be a servicing fee applied for special requests like a request for statements or a request for a change in loan tenure. It applies to loans both with lock-in and without lock-in.
POSB/DBS Home Loan Payment Relief
One of the big concerns we have during this pandemic is our monthly expenses thinking about reducing it instead of the default.
With the help of DBS Home Loan Payment Relief, you can defer your monthly instalment payment until December 2020.
DBS Home Loan Payment Relief is a program to assist home loan customers financially strained due to the COVID-19 pandemic. This program is offered to Singapore residential property only.
During deferment, the interest rate will continue to add to the loan’s outstanding principal amount. But there will be no late payment interest to be charged and will not affect your Credit Score.
The monthly payments will resume by January 2021. Expect the interest accrued during deferment will be added to your monthly instalment once the payment will resume.
If you are financially strained during this pandemic, you can choose to apply for this program.
Getting in touch with POSB Hotline
If you think you need further help from POSB, you can get in touch with them through their Help & Support section. Or you want to reach them right away, you can call them through their hotline: 1800-339-6666.
Having your own home is everyone’s dream to achieve. However, not all are sitting on a pile of cash that can easily purchase a property. This is why home loans are innovated to help finance those who want to begin their journey to achieve their dream home.
POSB, one of the reputable local banks in Singapore, can be your best partner in acquiring your dream home. The bank offers a variety of packages that will surely meet the borrower’s needs. All you have to do is choose which best suits your capability to repay the loan.
Wasn’t able to meet the requirements? Why not choose a licensed moneylender? Cash Mart, a licensed moneylender in Singapore, offers a more flexible loan product and requires no collateral from the borrower. For further information, feel free to visit us at www.cashmart.com.sg.