WHAT CAN I AFFORD
Before you commit to purchase a property, you should first work out a budget to help you determine how much you can afford and the ceiling price on any property you may wish to buy. As a guide, your monthly commitments on paying installments for your house, car and other payments should not exceed 1/3 of your gross monthly household income.

Your source of funding can be all or any combination of the following:

1. Savings
2. Withdrawal from Employee Provident Fund (EPF) account
3. Loan facility from a financial institution

SAVINGS
You should have sufficient personal savings to pay for the downpayment and other related costs associated with buying a house. A good estimate would be about 10%-20% of the purchase price as down - payment and another 3%-5% for related costs, such as legal fees and stamp duties.

EPF SAVINGS
You could also withdraw from your Account 2 to make the initial downpayment. Please contact your nearest EPF office to inquire about your withdrawal eligibility.

CHOOSING YOUR FINANCIAL INSTITUTION
You should shop around before you decide on any financial institution. Remember that when you take up a housing loan, you will be dealing with the financial institution on a regular basis for a period of time. Therefore, you should also consider factors other than just interest rates. Below are some of the factors you should consider:

• How professional is the financial institution in dealing with customers?
• Does it offer quality service in terms of efficiency and reliability?
• What are the available loan packages and which package suits you best?
• What are the charges involved?
  For example, legal fees, related government fees and charges, disbursement fees and others. You should also be informed when and how often these charges are to be paid

An innovative financial institution may offer a more suitable loan package that suits your needs and their application process may be faster and hassle-free. It usually takes about one to two weeks for your loan application to be approved from the time you submit all relevant documentation.

LOAN APPLICATIONS: DOCUMENTS REQUIRED
You need to provide the following basic documents before the financial institution can process your loan application:

• A photocopy of identity card or passport
• Your latest 3 months' salary slip
• Your latest income tax return form (Form J) or EA form
• Sale and Purchase Agreement/deposit or booking receipt/letter of offer from the housing developer
• A photocopy of the land title (if any)
• The latest bank statements (compulsory in the absence of salary slips and/or Form J/EA Form) dating back six months/savings passbook/fixed deposits
• Valuation report for completed houses and/or
• If you are self-employed, you need to provide your business registration documents, latest 3 months bank statements, latest financial statements and other supporting documents to support your income

However, some financial institutions may require additional supporting documents.

Upon acceptance of the letter of offer, you will need to appoint a lawyer to draw up the loan documentation for you. Normally, you would select your lawyer from a list of panel lawyers provided by your financial institution. Some of these documents need to be submitted to the relevant government authorities for registration and to the Stamp Office for stamping.

Upon completion of the above, these registered documents are then submitted to the financial institution and you will be given a copy of the Loan Agreement. In general, the timeframe for the completion of this legal process should not exceed 6 months.

Information courtesy from :