How to get the best deal
The best way to compare home loans is to ask for a key facts sheet from different lenders however this can be very time consuming and confusing. You need to obtain the key facts sheet that will give you the information you need, in a set format so you can directly compare features and fees.
The key facts sheet will tell you the total amount to be paid back over the life of the loan, repayment amounts, fees and charges.
Ideally you could use the services of an Accredited Mortgage Consultant. AMC’s have been trained to know the market and to help you find the best deal. You pay no more arranging your loan with an AMC, in fact they may be able to get deals not generally available or easy to find.
Looking for a Home Loan? Look for an Accredited Mortgage Consultant
Shopping for a home loan in Singapore seems to be a tremendously easy exercise. With a radius of just 38 kilometres stretching from Changi Airport to Jurong Bird Park and with most banks conveniently located all over Singapore, there seemed to be little need to engage any Finance/Mortgage Broker to source for home loans. After all, one of the commonly stated reasons for engaging Mortgage Broker is to have them help with the ‘legwork’ which seem a redundant exercise in Singapore.
Given that taking up a home loan seems an easy exercise, is there still any need to engage any qualified accredited mortgage broker to assist you source for a home loan? This usually free service offered by brokers can save you time and may add value in the following aspects. Brokers will:
1. Take you through Options that are currently available in the market. Brokers work with most local banks plus panel of offshore banks. They are required to keep up-to-date with the lenders’ latest offers. The best deal is not necessarily the cheapest rate. A good mortgage broker will examine your circumstances and future plans to recommend a loan that is right for you. Having an appropriate loan that works for you can help you to build wealth.
2. Take you through the various mortgage packages. You will learn the difference between a fixed, variable, combination and/or offset kinds of loans packages. There is no right or wrong option as it all depends on your circumstances. With fixed rate home loan, the interest rate on your mortgage doesn’t change for an agreed period of time (usually 1-5 years) no matter what happens to official interest rates. With variable rate home loans, the interest rate on your mortgage can changed. Split rate home loans combine elements of the fixed rate and variable rate options. For international loans, you will be taken through the pros and cons of taking up different currency loans. With global investors, home loan packages involving overseas properties may be more complex and hence the service of a competent Mortgage Broker is often welcomed.
3. Update you on different regulatory changes that have taken place especially in recent years. Over the last few years, the Government has introduced no less than 8 cooling measures from 2009 till 2013; the latest of which took place on 29th June 2013. Speak to your Accredited Mortgage Broker to see how these changes affect your borrowing capacity.
4. Take you through an Assessment Process to calculate how much you can potentially borrow via a Serviceability calculator. While these numbers assist with calculating the amounts that the lenders will likely offer you, what’s equally important is that the calculated instalment must be at a level that you can comfortably repay. The lender is mainly concerned whether you can repay the loan at your borrowed level. A good broker should help you assess issues like our income security, your family planning (as this will affect your family’s standard of living), job security (so that in case you lose your job, your emergency funds can sustain you for x number of months, recommended at 6-9 months).
5. Help you avoid pitfalls. Mortgage brokers help you look out for a suitable loan that not only offers a great deal, but also address issues like penalties, fees and charges.
In some cases, a resourceful mortgage broker can refer you to various professionals to maximise use of your funds especially given the recent cooling measures, some Singaporeans may be sitting on cash but may not be able to ‘afford’ buying more local properties due to much lower borrowing quantum. Referring you to different professionals can help you utilise and optimize your excess cash and give you options to maximise your investment potentials.
A good mortgage broker can save you time and money and give you peace of mind. But, remember only work with mortgage brokers who are members of MFAS*. These brokers are approved (accredited) by MFAS and they must satisfy rigorous criteria on education, experience and ethics. To remain a member, they must demonstrate that they have maintained those standards and kept up-to-date with the latest mortgage and finance industry developments.
Currently there are about 450 finance brokers who have undergone accreditation with us and have been certified as Accredited Mortgage Consultants. Some of them have recently upgraded their professional qualifications to Diploma in Finance and Mortgage Broking to align themselves with how the professional brokers upgrade their professionalism in Australia.
What is the cost involved for engaging the services of an AMC?
There is practically ZERO cost to the clients as AMCs are compensated by the banks/financiers that the clients take up the loan with. However, in some unique cases where exceptional work is called for, clients may be charged some professional fees, in any case in instances like that the AMC will communicate beforehand the relevant fees to the clients.
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