Buying a new property can be an exciting time in your life, but sometimes funding may not be available yet until you sell your current home. In cases like this, bridging loans in Singapore are an excellent solution to ensure that you have enough funds to cover your new property’s purchase. This article provides you with all the essential information you need to know about Singapore bridging loans.
What is a Bridging Loan Singapore?
A bridging loan is a type of short-term financing that is available to individuals who want to buy a new property while they’re waiting for the cash proceeds of the sale of their current property. This loan is designed to cover the short-term cash crunch that may arise between the purchase of your new property and the sale of your existing one. Typically, bridging loans in Singapore are for a period of up to 12 months, and the amount borrowed is based on the value of the property.
Who can apply for a Bridging Loan in Singapore?
Anyone who wants to purchase a new property in Singapore before they have sold their existing one can apply for a bridging loan in Singapore. However, only those who have a strong repayment capacity can apply for it, which means you must demonstrate that you have the means to repay the loan.
Advantages of Bridging Loans:
One of the main advantages of a bridging loan is that it allows you to purchase a new property without having to wait for proceeds from the sale of your old property. Another advantage is that it doesn’t affect your current credit score since you’re borrowing money against future funds. Additionally, bridging loans are usually approved quickly, and you can get the funds you need within a short period.
How to apply for a Bridging Loan in Singapore?
To apply for a bridging loan in Singapore, you’ll need to provide the following documentation: your identity and income proof, evidence of the purchase and sale agreements of both the existing and new properties, valuation reports for both properties, and a repayment plan that shows how you intend to repay the loan. After submitting the necessary documents, the lender assesses your eligibility and approves the loan if you meet their criteria.
What are the costs involved in taking a Bridging Loan in Singapore?
The costs associated with taking a bridging loan in Singapore include the interest rate charged, lender’s fees (such as legal fees, processing fees, etc.), valuation fees, and insurance premiums. These costs will vary depending on the lender.
In summary, bridging loans in Singapore are an excellent option for those who want to purchase a new property before they sell their existing one. However, before taking a bridging loan, it is essential to assess the costs involved and ensure that you have a repayment plan in place. By doing so, you can make an informed decision about whether a bridging loan is the best financing option for your needs. Remember to choose a reputable lender like Avis Credit for your bridging loan needs.
