Financing your home

Is there any other loan that will help me to pay for the down payment of a property?

Yes, you may use a bridging loan, which is a short-term loan designed to tide the borrower over a period when he needs cash. However, because bridging loans are usually available for those taking up a housing loan from the same bank. Some people also use this type of loan while waiting for the release of his CPF funds.

When should I repay the full bridging loan?

You have to do so upon completing the transaction of purchasing the property (usually 3 months), subject to a maximum of 6 months

If the bank's lawyers delayed their preparation of a mortgage which consequently required me to pay interest to the Seller, what should I do?

Unfortunately you will not have any course of action against the bank since the bank does not bind itself to you to provide the loan before the completion date. The bank's lawyers also do not represent you, therefore you will also have no recourse against them.

What happens if I default on my mortgage loan?

The following are the actions the Bank can take:

• Sell your property to recover the money lent to you;
• Appoint a receiver, that is to appoint a person to take charge of the property if the bank wishes to obtain rents from your property;
• Insure your property against fire and other fortuitous accidents, and
• Refuse to allow you to redeem the mortgage of another property if you have mortgaged more than one property

How can I redeem my mortgage?

You may do so by giving a notice of redemption to your Bank. Your lawyer will prepare a "total discharge of mortgage". He will then arrange with the Bank's lawyer to execute the Total Discharge of Mortgage, and register it at the Registry of Land Titles. You then pay off the mortgage loan in exchange for the signed "total discharge of mortgage" or "deed of reassignment

Can I redeem my mortgage?

It may be redeemed any time, however, but you may have to pay a fee for early redemption. The fee is known as the pre-payment penalty, and is based on the mortgage loan amount or outstanding amount.

Should I refinance my property with another bank with much lower interest rates?

It all depends. This is because you must take into account the pre-payment penalties involved in redeeming your mortgage earlier than the maturity date. Therefore, you have to compare the monthly installments offered by each bank and include the penalties for terminating the original loan. Also, it would be not be sensible to refinance at the end of a loan period since the interest gain in the new bank would be minimal.

Can I use an overdraft to rebuild my bungalow?

You can use an overdraft to rebuild your property, but a reconstruction loan has a lower interest rate, and you only need to pay for the interest rates on the amount you have used.

After the Bank sells my house, will I be entitled to any money?

Yes, provided that there is any left after the Bank recovers the money lent to you, including all other expenses in selling your house.

Can I sue the Bank if my property which I defaulted on the mortgage loan is sold at a very low price?

Unless you can prove that the Bank has acted carelessly or recklessly in selling your property at a much lower price that what the market is willing to pay, the Court will not interfere.