I have procrastinated long enough. In 2021, we will be launching our new series "Homemakers", where I will be sharing with you our experieces relating on the finances, renovations and decorations to our first home.
Decided to start off this series talking about bank loans. Most people tend to be lazy and when there is too much at hand, we tend to go for the simplest, most fuss-free route which is take the HDB loan. The HDB loan is pegged at 2.6% (at the time of the post) and generally does not require strict underwriting. However, if the interest market is depressed (like now), there is actually merits in exploring bank loans.
Especially when you have enough cash in your CPF and on hand, you would be eligible to take up a bank loan. For us, we decided to go with DBS. (Admittedly, we were quite lazy and did not really check on the rates with all banks. We only checked among the 3 local banks and some other foreign banks which we already have accounts with.) For people who want to avoid the hassle, I heard that DBS tends to offer quite competitve (if not the lowest rate) in town.
Apart from a lower rate, this can also contribute as part of the requirements to your multiplier account (I don't own one) so I won't comment much on this. For info, you can also re-finance your loans from HDB. Psst...banks tend to throw in quite a bit freebies, so do hunt around.
Having said that, the documentation is a chore. You have to find your own lawyer to do the paper works. DBS has a panel of legal firm partners and you basically have to call down the list for the best rate (Most of them charge about $2,000, we got ours at about $1800. Drop us an email if you want us to refer you. Personally, I don't find there is much differentiations between the legal firms.)
I am not sure whether it is due to the Covid, but applying for the bank loan at DBS also took quite a while with many papers flying here and there. The Hubs was very convinced it was worth the one-time hassle and the time for the cost-saving. (Maybe because I was the one doing all the work!) Feel free to hit me up if you want to know more on our experience before you decide the best move for yourself.
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Disclaimer: I am no finance guru. All the above rambles are my own opinions.
