This article was written in collaboration with PropertyGuru. All views expressed are the independent opinion of DollarsAndSense.sg
The COVID-19 outbreak has put a huge dent on economies around the world. Many countries (including Singapore) have been forced to shut schools and non-essential workplaces in order to slow the virus outbreak. Most businesses have been affected, with some even having to laid off workers or to put their workers on unpaid leaves.
To support the economy, interest rates have also been slashed by the US Federal Reserve to near zero. This means borrowers, including property owners or potential buyers, may now be able to buy a property at a more affordable price.
During this period, online property portals are a good place to get started if you want to browse property listings from the comfort of your home. For example, PropertyGuru allows both real estate agents and potential buyers to search and find suitable properties across Singapore based on their specific requirements. This includes both buying and renting.
While having lots of property listings is good, PropertyGuru also understands that buying the right home isn’t just about finding a property that you like and meets your needs, but also about understanding whether you can afford it. This is why the company has launched PropertyGuru Finance, a mortgage marketplace that aims to help property buyers in Singapore simplify their home-buying journey and save money on their home loans with the best rates available.
How PropertyGuru Finance Works
PropertyGuru Finance supports potential property buyers in their home-buying journey by first helping them to assess what it is that they can and cannot afford. While it’s nice to be surfing on PropertyGuru to look at beautiful photos of landed properties, condominiums or HDBs that are for sale in Singapore, it’s more important to know whether we can realistically afford these properties that we are looking.
Through an intelligent Affordability Calculator that will add just 2 minutes to your browsing time, PropertyGuru Finance takes into consideration your current financial status to calculate what you can afford.
First, you put in the relevant inputs. Information that is required includes the following.
– Whether you are purchasing the home by yourself or with someone else?
– You and your partner’s age (if you are buying with someone)
– How much both of you earn, inclusive of variable income and bonuses?
– How much money you intend to set aside for the down payment of your home (Cash & CPF)?
– How much monthly loan commitments you currently have?
– How many existing properties and home loans you currently have?
– What kind of properties you are looking at (HDB, Condo, Landed Properties)
The reason why these questions are important is that they are required to help you determine the price of the home that you can afford. This is based on 1) the down payment that you are able to pay and 2) how much you can borrow.
For example, a couple, Alex and Angie, each earn $8,000 a month. They have cash savings of $50,000 each, and also another $75,000 each in their CPF Ordinary Account, that they intend to use to buy a property. They have no monthly loan commitments and are looking to buy a condominium unit.
Through the inputs provided to the PropertyGuru Affordability Calculator, Alex and Angie can purchase a condominium worth up to $1 million. This is because they currently have $250,000 in Cash/CPF to put in a downpayment and buyers are required to put in at least 25% as downpayment.
At this point, it’s important to note that just because they can afford to buy a $1 million property doesn’t mean they should maximise the loan they can get.
Alex and Angie decided that $800,000 is a more comfortable budget for their first home. The Affordability Calculator allows them to fine-tune their home budget, and automatically adjusts the monthly repayment and total deposit needed accordingly.
There are certain assumptions made for the affordability calculator. It assumes an interest rate of 3.5% and a loan period of 30 years. This means if you can get a lower interest rate, your monthly repayment will be lower than what’s indicated in the calculator.
PropertyGuru Also Helps You Find Suitable Properties And Get You The Best Home Loan
Knowing how much you can afford is only the beginning of your home-buying journey. Once you have a clear budget in mind, it’s time to start hunting for suitable properties to view.
As the market leader in the property listing space, PropertyGuru is well-positioned to help match you to the most suitable properties based on your budget and requirements. Doing so allows you to more efficiently hunt and shortlist suitable properties, with the confidence that you can afford the properties that you are browsing.
If you already have properties in mind and are now looking to secure a loan before making an offer, PropertyGuru Finance can also help you search and compare the best home loan rates offered by major banks in Singapore. This can be done through PropertyGuru Finance loan comparison platform.
If you require further hand-holding on the process or want to ask questions, you can also consult a PropertyGuru Home Finance Adviser to help advise you on the best home loan to take for your property.
During this period, PropertyGuru Finance is also providing home loan reviews (complimentary of course!) to ease the financial burden for homeowners in their monthly repayments. So while COVID-19 has unfortunately forced many of us to be home-based, existing homeowners should also take advantage of the low-interest rate environment to refinance their mortgage and save on interest costs. You can chat with a Home Finance adviser who can share with you the best home loan package during this period.
Reduce Your Uncertainties Through PropertyGuru Finance
As anyone who has gone hunting for a property would tell you, buying a home can be a complicated and stressful process. Merely finding, visiting and negotiating with the sellers on the property price is challenging enough as it is. Adding to that, we still need to calculate how much down payment we can afford to pay and how much loan we can secure to purchase the property.
Through PropertyGuru Finance, PropertyGuru hopes to reduce the uncertainties that many homebuyers will face when looking to buy a property.
Whether you are casually starting out your search for a new property, looking to make a firm offer for some of the shortlisted properties that you have viewed or need to take a home loan to complete your transaction, PropertyGuru Finance can help you in each step along the way so that you can successfully purchase the dream home – that you are able to afford.