For many of us, real estate is likely one of the most expensive assets that you will ever purchase in your lifetime. This is even more true in Singapore, where property prices keep getting higher. Whether you are seeking to purchase your next property for investment purposes or to upgrade your property, mortgage advice would help you find the right financing solutions for your holding period.
It may be true that obtaining advice through a mortgage advisor is not entirely necessary, especially given the wealth of information available online. However, considering that large real estate purchases are not a common occurrence for many, having an expert in your corner of the ring does put the odds of making a profitable purchase in your favour.
Additionally, an advisor would be able to tailor their advice according to the situation that you face. You could be upgrading from a HDB to a condominium with an eye on amassing enough capital appreciation to eventually purchase a landed property or wish to optimise your real estate roadmap to take advantage of the Loan-to-Value limits as a first-time buyer. These are just some of the nuances faced by prospective buyers, and they vary widely across the population.
Today, we will highlight some of the benefits that could come from working with a mortgage advisor so that you can make a well-informed decision in this next step of your real estate journey.
1. Obtaining Tailored Information
As briefly mentioned earlier, the right advice will equip you with the knowledge to navigate your unique situation. With the vastness of resources online, especially considering the constantly evolving legislative landscape, it can be hard to keep track of which information is current, and which pertain specifically to your situation.
For example, the Total Debt Servicing Ratio (TDSR) applies to all outstanding loan obligations. At face value, it is not uncommon for a layperson to confuse this with the debt servicing ratio on that one particular property. If miscalculations arise, they may not be able to proceed with the transaction, and this comes before balancing the requirements of the Loan-to-Value (LTV) limit, which differ between property types.
For example, recent cooling measures in December 2021 stated that the TDSR for private properties were lowered to 55%. These changes in regulations can be confusing and having an advisor would benefit you in highlighting these roadblocks while simultaneously providing you alternatives.
2. Simplifying The Documentation Process
Nobody likes to be flooded in a sea of paperwork, or to be lost in the financial jargon provided by banks and institutions. Working together with an experienced mortgage advisor would help to ease this frustration.
Your mortgage advisor will point out the necessary fine print to be aware of, and the nuances between each of the loan products.
Furthermore, your mortgage advisor will assist you with ensuring that your paperwork is in order before submitting loan applications. This would streamline the application process, thereby saving time, while reducing the stress involved in the loan application.
Essentially, an experienced mortgage advisor will assist you in the process of your loan application to ensure that you are not met with any surprises.
3. Refinancing And Restructuring
In a world of market cycles, fluctuating interest rates, fixed and floating rate mortgages, it seems like an awful lot of work to keep track of everything, especially for property investors who seek a source of “passive income”.
At the same time, our friends at the bank are always structuring new home loans which have attractive clauses with increasingly less obvious pitfalls. Although not all products are designed to siphon all of your rental property income, it would be prudent from a risk management perspective to understand how it would be best to optimise your debt portfolio.
Professional advice would help you take advantage of any changes in the real estate market or interest rate cycles so that you can maximise your rental income and minimise your monthly mortgage payments. A good mortgage advisor is one who stays in tune with the market and reacts quickly when an opportunity for their client arises. Surely, you could do the same but why not leave it to the professionals?
Getting the right advice in a refinancing situation may help you reduce your monthly payments, freeing up more cash for your enjoyment, or simply putting you in a better financial position for your next big purchase.
4. I Am Just Starting Out In Real Estate, Should I Still Seek Mortgage Advice?
We advocate understanding what you purchase before you purchase it. As iterated before, a real estate purchase is one of the largest single purchases you can make in your lifetime.
If you have read this far, we believe that you are keen to understand Singapore’s real estate market, and the journey of a property owner in Singapore.
Even if you do not have any immediate plans for your real estate journey, we still do recommend speaking to a mortgage advisor to understand the possibilities of your given situation. Having greater clarity of the local real estate market may help you to appreciate the industry, and perhaps, your goals may not be so far out of reach.
For a mortgage advisor to provide the right advice, a good working relationship is required so that your needs can be understood. Feel free to reach out to us and get in touch with any one of our professional mortgage advisors to have an understanding for where you stand in your personal real estate journey!