FAQ

How LoanGuru Works?

What is LoanGuru?

LoanGuru is a local mortgage website that helps you search, compare, and enquire about loan packages that are most suitable for you, in the simplest and fastest way possible.

What makes LoanGuru unique?

With LoanGuru, you no longer need to spend hours wading through pages of confusing numbers and terms. LoanGuru will guide you through each step of the way, making it user-friendly and comprehensive.

How do I get started?

Select the type of loan you want on our home page and proceed to complete an online loan request. It will then show you a complete comparison of different bank rates, and you can choose the one that is most ideal for you.

Do I need to pay to use LoanGuru?

Not at all! LoanGuru does not charge you for its service. You can simply log on and use it at your own diposal to help you make informed financial decisions.

Is it safe to send information from this website?

We are probably the first and only mortgage broker in Singapore who has employed Secured Service Layer (SSL) throughout our website and on our server. This is implemented to make sure the information you send online is securely transmitted to us. Web share hosting is disabled on our website for security reasons. 

How are the loans structured for HDB properties?

HDB home buyers have two options when it comes to financing their HDB property. They can either take up a loan from the HDB or from financial institutions (FIs).

The HDB loan option allows the borrower to use the CPF funds to pay fully for the apartment. HDB also offers a variable concessionary interest rate. HDB's interest rate is less dynamic compared to the commercial interest rates set by the FIs. This gives home buyers more stability and predictability in managing their cash flow. It is to be noted, however, that the concessionary rate benefit is applicable only for the first two purchases of HDB apartments.

For those who decide to take a loan from the FIs, it is to be noted that the maximum loan amount is capped at 90% of the purchase price. The remaining 10% will have to come from private funds, of which 5% must be a cash payment.

The interest rates set by the FIs changes often. As such, it may or may not be as attractive as HDB's concessionary interest rates. Each FI also has their own credit-rating system.

Several mortgage loan packages are offered by the FIs. Click here to learn more about the common types of mortgage loans. 

How are the loans structured for private properties?

If it is a completed private property, the Normal Payment Scheme applies. The buyer is required to pay the initial 5% in cash. They can then use their CPF savings to finance their mortgage loan provided they have enough CPF savings. If there is a balance, the conveyancing law firm proceeds to obtain it from the CPF Board or the FI prior to completion of purchase.

If the property is still under construction, the Progressive Payment Scheme applies. This is where the developer and the bank determines the payment schedule for the property buyer. The schedule is dependent on the stages of completion of the building project. The payments follow a standard percentage of the purchase price, once the Option to Purchase permit has been received. The scheme ensures that the payment is done upon completion of the development project.

What are the common interest rate schemes offered for mortgage loans?

Most FIs provide a combination of the following schemes: SIBOR, SOR, CPF, Fixed, Variable, Combination, Interest Servicing, and also the Zero Percent Interest Rate schemes. It is to be noted that interest rates for HDB mortgage loans may vary from private property mortgage loans.

For the Progressive Payment Scheme, there is a time lapse from the purchase date to the TOP date. As the interest rates always change, most FIs allow for a one-time free conversion for the buyer to either remain with the current loan's interest rate or switch to another loan package which may have better rates.

How do Financial Institutions (FIs) determine my eligibility for a housing loan?

Each FI has their own assessment system. Generally however, the FI will assess the borrowers ability to repay the loan on time. In addition, the FIs  determine the maximum loan amount.

Common criteria used for assessment includes, but are not limited to, the following:

•    monthly income
•    CPF contribution
•    savings in CPF Ordinary account
•    financial commitments
•    credit rating (obtained from Credit Bureau Singapore)
•    debt servicing ability
•    litigation suits (obtained from a Quest Line Search)
•    bankruptcy
•    employment
•    existence of guarantor
•    existence of joint borrower
•    age
•    nationality

What should I take note of when taking up a mortgage loan?

First and foremost, you have to decide on your budget. Work out every detail into your budget, such as lender fee and valuation fee. As a good rule of thumb, your monthly mortgage payment should only be 30-35% of your monthly income.

You should also consider the loan term that you are willing to commit yourself to. Bear in mind too that the longer the long term, the more interests you pay.  A lot of changes may occur during your loan term which may affect your ability to pay for the loan. For example, changes in CPF contribution policies, interest rates, your employment status, and the economy may affect you.  

What are the stages of processing a loan?

Once you have chosen the most suitable loan package for you and submitted all necessary documents (such as income document and loan application) to the respective FI, they will decide on the loan amount and loan term and come up with a Letter of Offer (LO) within 3 – 7 working days. A representative from the FI will explain the terms and conditions to you. If you accept the terms and conditions, you and the FI’s representative will sign the LO. The representative will take the LO, along with other supporting documents to the FI for processing. The FI will then issue a Letter of Instruction (LOI) and get an appointed law firm to act on their behalf. This usually takes 7 – 10 working days.  

What are the documents that I need to prepare for my mortgage loan application?

The documents needed for a standard housing loan application are:

•    NRIC of borrower(s)
•    Loan application form
•    Latest income documents (pay slip, Notice of Tax Assessment)
•    Latest CPF statement showing a 12-15 months history of CPF contributions
•    Option to Purchase document

If the application is for refinancing, the additional documents are:

•    Latest CPF Property withdrawal statement
•    Last 12 months housing loan repayment statement

If a bridging loan is required, the additional documents are:

•    Latest CPF Property Withdrawal Statement of Account
•    Latest statement of existing loan account (HDB or existing FI),
•    Proof of confirmed sale 

What do I do now?

If you are ready and have decided to purchase a house, you should contact an experienced mortgage advisor to work out a detailed and customized financial plan for you and recommend the best loan packages available in the market. You may also want to read our mortgage guides.