Financial Commitment when buying or leasing a property is one of the most fundamental agreements that both the buyer and the seller must make to facilitate faster and trustworthy transactions. Singapore is one of the most developed countries with a high attraction of real estate business. In fact, Singapore is graded the most expensive city in the world, overtaking the likes of New York, London, Beijing, Paris, and many others. Therefore, being in knowledge of the financial commitment requirements is necessary before transacting any deal in Singapore. In particular, there is a new development Casa Meyfort which is located at East Coast that is available for sale soon.
Financial Commitment for Buyers Looking at Real Estate
Currently, the Singaporean Mortgage Servicing Ratio is capped at 30% of your gross income salary. This imports that if your monthly income is $ 6,000, then the amount you will have to pay for purposes of servicing your mortgage will not be more than $1,800. However, getting a loan from a Bank may be quite challenging because of factors such as mistrust, inability to service your loan, alongside many others. Therefore, the financial commitment is a fundamentally critical agreement that you must evince in order to obtain a mortgage from any Singaporean financial institution.
Loan for Singapore Real Estate
For a real estate businessman, financial commitment may mean some money that you need to purchase a property and commit to paying at a later date. Usually, Banks will be willing to offer you loan as long as you demonstrate your financial ability to repay within the agreed period. After all, who wants to give a loan to someone they are not sure of their repayment ability? For this, you will need to comprehensively explain in a commitment letter outlining all your assets and liabilities and how you intend to repay. However, in case your liabilities exceed your assets, most financial institutions will not see you as being able to repay. In many cases, they will view you as a potential defaulter. This will eventually report a negative score in your loan request, thereby inconveniencing your plans.
Financial Capability of Buyers
Moreover, if you are able to convince your Bank to give you a mortgage loan but then default in your payment, the lender, in this case, you Bank, has the legal prerogative to foreclose on your property in order to repay your loan. This is why it is most important to Banks to assess your financial capability to repay back their money by getting more information on your financial commitment letter. In such a case, therefore, your property acts as collateral. Therefore, if you are planning to obtain some loan for real estate, be ready to develop a comprehensive list of assets, some of which will be used as collaterals should you default. Otherwise, you may be confronted with legal battles in the High Court.