The Various Options That Are Available With Loans for Housing

The importance of financing: Purchasing a house or dwelling would be the most expensive transaction that a person gets to do in the lifetime, for a good number of people. The importance of a housing loan is further accentuated by the long tenures that most housing loans have, which makes it all the more important that it is got right the first time around. Mistakes can only cause severe burden and expensive remedial. The best housing loan Singapore allow the customer the flexibility that an ordinary firm does not allow. The need as well as the ability to repay without serious stress on the financial state of a person is what attract a particular person to the offerings of a particular company.

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The options available: About 80% of housing financing options can be classified as loans and mortgages. Thus it beholds that a brief explanation is made on these two very important products.

Loans: A loan is money lent for any purpose by a financial institution to be repaid in small installments that are usually done monthly. There is a rate of interest charged which is the return on capital that the finance company makes on its advancement. If it suits the borrower and the lender as well, it is possible to have a quarterly mode of repayment as well or any other mutually agreed upon time period. In most instances the lender would insist on a guarantee that the loan taken would be repaid or that suitable collateral be offered. Since the home loans would involve considerable sums of money, it is only natural a good solid guarantee is furnished in each case.

Mortgages: In a mortgage, the surety that is offered is the property that is being purchase. In case of default the lender gets to take possession of the property that is being purchased. Mortgages are a very popular and a preferred method of making home purchases as additional collateral is not required from the borrower. A very competitive mortgage rates Singapore ensures the popularity of this method of financing. Thus in most cases the lender would ascertain the true value of a property and the credit worthiness of the borrower to help with the better understanding of the situation. As with any other lending activity, the repayment can be done in installments that run monthly or any mutually agreed upon frequency.  Defaults are usually minimal as most home owners would not like to lose the property in their possession.

 

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