Good news! You’re upgrading to a better house, but the sale proceeds from your existing property is not in yet and you need to make a downpayment of 20% for the new home. This is where Lending Bee’s Bridging Loan can help you.
What Is A Bridging Loan?
Just as the name suggests, a bridging loan, also known as a bridge loan, is a short-term loan to help bridge the financial gap between the sale of your old property and the purchase of your new home. These loans are designed to help you tide over the period until payment from the sale of your property comes in.
Since this is a short time period, most financial institutions only offer loan tenures of 6 to 12 months. However, Lending Bee, with comprehensive knowledge in the property industry understands the needs of consumers and offers bridging loans of up to 24 months.
A Detailed Explanation Of How It Works
Singapore is known as one of the most expensive countries in the world. One has to admit that most things are pricey, especially cars and properties. With the high cost of living, it is common for Singaporeans to take on a loan and borrow funds to invest in a home. Well, if you have already managed to purchase your first home in Singapore, it is definitely an achievement.
However, what if you plan to upgrade your current home and move to an even bigger house or to a better location?
They say that time is money. We all want our homes to be conveniently located near MRT stations so that we can save time on commute. Other than that, there will come a time where we want to live in a bigger or more luxurious home that increases our standard of living. A bigger living area, more rooms, lush toilets, a kitchen island, a giant fridge or simply living on higher ground.
Aiming to move to a condominium or a landed property? The first step is to put your current home up for sale. In short, sell your current home for a better one. However, even if you have successfully found a buyer for your current home, you might not receive payment until months later. During this period, you will need to make your downpayment of 20% purchase price and without the sale proceeds, it may be tough to get the funds.
Lending Bee’s Bridging Loan helps provide you with the necessary funds to make up for the shortfall. While you wait for the sale proceeds from your current home, we make the financial downpayment for your new home. The most attractive feature from our Bridging Loan aside from low interest rates is that loan tenures are up to 24 months, which is much longer than the duration offered by other companies.
What Does Lending Bee® Bridging Loans Offer?
Here’s An Example To Help You Understand More About The Loan
Mr and Mrs Khoo plan to sell their current HDB in Punggol to purchase a new condominium at Kallang. They found a buyer and sold the HDB at a good price. However, they could only receive the sale proceeds 7 months later.
|Existing HDB Price||New Condominium Purchase Price|
|Financing The Property Purchase Of $1,000,000|
|Downpayment (5% in cash)||$1,000,000 x 5% = $50,000|
|Downpayment (20% in cash and/or CPF)||$1,000,000 x 20% = $200,000|
|Loan Amount||$1,000,000 x 75% = $750,000|
Mr and Mrs Khoo have sufficient funds for the 5% cash downpayment but do not have enough for the remaining 20% downpayment. They needed the proceeds from the sale of their current HDB.
As they had to wait for at least 7 months till the money is transferred, applying for a Bridging Loan at many other financial institutes as most only offer short-term loan tenures of 6 months, sometimes 12.
Letting go of the new property seemed to be a waste as it was at a prime location with good interior layouts.
In such cases, Lending Bee’s Bridging Loan can help the couple bridge the short-term monetary gap. The best benefit from our loan is that loan tenures are up to 24 months, which is twice the time period of most companies.
Taking such a loan helps secure a better property, bringing about a better future. And, finances were not strained as well. What are you waiting for? Apply today.
What Else Can You Use The Bridging Loan For?
Lending Bee’s Bridging Loan offers a longer loan period of 24 months, increasing the use of this loan. Our customers are free to use this loan for the purchase of any type of property, including public, private, residential and commercial properties.
A Bridging Loan can also be used for other purposes apart from paying the deposit for your new house. You can use it for home renovation or developing a piece of land.
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2 Types Of Bridging Loans You Can Apply For
In Singapore, there are 2 types of bridging loans you can apply for. They are carry slight differences but nonetheless serve the same purpose – to bridge the monetary gap between the sale of your current property and the purchase of your new property.
Property Types And Prices In Singapore
Getting a bridging loan could mean that you are selling away your current property and upgrading to a better home. Otherwise, you could be purchasing a new property for your business or for investment purposes Whichever is the case, the property should be spacious and at a good location whereby transport facilities or shopping malls are easily accessible.
Here’s an estimate of the prices of properties in Singapore. Be it selling your HDB or buying a semi-detached house, the prices and details are in the table. A good rule of thumb to keep is that the better the location, the more expensive the house.
S$275,000 - S$375,000
3-Room HDBs are usually at the size of 60-65 sqm.
The house usually comes with 1 master bedroom, 1 common bedroom, 1 living room, 1 or 2 toilets, 1 kitchen and 1 store room. The price of the property depends greatly on location.
S$400,000 - S$550,000
4-Room HDBs usually measure around 90-100 sqm.
The house comes with 1 master bedroom, 2 common bedrooms, 1 living room, 1 kitchen, 1 store room and 2 toilets.
S$500,000 - S$670,000
5-Room HDBs are usually at the size of 110-120 sqm.
They are larger than the other HDBs and comes with 1 master bedroom, 2 common bedrooms, 2 toilets, 1 kitchen, 1 store room and 1 larger living room that is usually attached to a dining area. The living room area is much larger and more spacious.
S$550,000 - S$690,000
This is a larger public housing and usually measures at least 130 sqm, making it perfect for larger families or three generation families.
The house comes with 1 master bedroom, 2 common bedrooms, 1 very large living room, 1 dining area, 1 additional area that could be used as a study or guest room, 3 toilets,1 kitchen and 1 store room. Some executive apartments will include stairs as well.
Executive Condominium (EC)
S$800,000 - S$950,000
Executive Condominiums (EC) are public-private hybrids. The houses start of as public housing and will be converted to private homes after five years.
They run a 99-year leash and most of them offer similar facilities as private condos.
(Outside Prime Locations)
S$1,000,000 - $2,000,000
These are luxuriously designed private housing that offers many facilities for its residents. The buildings usually look classy and posh. 24/7 security, gyms, swimming pools, BBQ pits and function rooms are available.
3 Questions To Ask When Getting A Bridging Loan
Are you getting the cheapest bridging loan available in the market?
There are innumerable loan options available in the market. Bridging loans are offered by financial institutions and each proposes their own version and package. The rates and loan tenures are different. So, how will you be able to determine the best loan package for you? Consider the interest rates and the loan tenures they are willing to offer. Most provide 6 to 12 months for their repayment period while one or two offer 24 months. Choose the company that doesn’t let you strain your finances while at the same time, get the property of your dreams.
What are the repayment fees and terms?
Before signing the loan, remember to clarify the interest rates, early repayment penalties, late repayment penalties and hidden fees with your loan provider. This is to allow you to be prepared for the monthly repayments.
How much can you borrow for your Bridging Loan?
Check with your lender how much you are allowed to borrow for your property purchase. Make sure that it is sufficient or you will have to top for a fair bit.
In Singapore, you will have to take note of your TDSR. TDSR stands for Total Debt Servicing Ratio and is a framework set by the government to keep our loans and balances in check. It prevents you from overborrowing. TDSR calculates the percentage of your income that goes into repaying your loans. TDSR is at 60%, meaning that no more than 60% of your monthly income should be used to finance debts and loans.
Remember to choose a lender that offers the best loan packages and the best rates. With Lending Bee® licensed money lender, we not only helps in your finances, but walks the journey with you. Click here to apply.
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