Faber Residence Condo: Financing Options and Loan Tips

Buying a private condominium is one of the most significant financial commitments for any individual or family in Singapore. With its prime location, riverside tranquility, and premium features, Faber Residence Condo has quickly become a top choice for homeowners and investors looking to secure long-term value. Whether you’re a first-time buyer or seasoned investor, understanding your financing options and making smart loan decisions is key to a smooth purchasing process.

Fortunately, Faber Residence offers a wide range of unit types to suit various budgets, and buyers have access to multiple financing methods through local banks, financial institutions, and CPF (Central Provident Fund) savings. This article will guide you through the different financing options available, eligibility requirements, and helpful tips to ensure you secure the best mortgage plan for your new home.

Understanding the Initial Costs

Before diving into loan options, it’s essential to understand the initial financial outlay for purchasing a unit at Faber Residence:

• Option Fee: Upon booking a unit, you’ll typically pay 5% of the purchase price in cash to receive the Option to Purchase (OTP).
• Exercise Fee: Within 14 days of receiving the OTP, you must exercise it by paying an additional 15% (a mix of cash and CPF savings).
• Buyer’s Stamp Duty (BSD): A tax payable based on the purchase price or market value, whichever is higher. Enhanced Additional Buyer’s Stamp Duty (ABSD) may also apply if this is not your first property.
• Legal Fees and Miscellaneous Costs: These include legal services, valuation reports, and administrative fees during the transaction.

The remaining 80% of the purchase price can be financed through a home loan, depending on your eligibility and chosen repayment terms.

Bank Loan vs. HDB Loan: Which Is Applicable?

Since Faber Residence is a private condominium, HDB loans are not applicable. Buyers will need to secure a bank loan or mortgage package from a private financial institution. Bank loans offer flexible options with varying interest rates and lock-in periods. Common types include:

• Fixed-rate Loans: A fixed interest rate for the initial few years, offering predictable monthly payments.
• Floating-rate Loans: Tied to SORA (Singapore Overnight Rate Average) or other benchmarks, these fluctuate based on market conditions.
• Combination Packages: A mix of fixed and floating rates that balance stability and potential savings.

Each bank has different terms, so comparing multiple loan packages is crucial before committing.

CPF Usage for Home Financing

Buyers in Singapore can use their CPF Ordinary Account (OA) savings to pay for a portion of the property purchase. CPF can be used for:

• Down payment (up to 20%)
• Legal and stamp duty fees
• Monthly loan repayments

However, CPF usage is subject to the Valuation Limit (VL) and Withdrawal Limit (WL). If the loan exceeds the VL, buyers may have to pay the excess in cash. It’s also important to remember that any CPF funds used must be refunded with accrued interest when the property is sold.

Loan Eligibility Criteria

When applying for a bank loan, lenders will assess several factors to determine your eligibility:

• Total Debt Servicing Ratio (TDSR): TDSR must not exceed 55% of your gross monthly income. This includes all existing debt obligations like car loans and credit card balances.
• Loan-to-Value (LTV) Ratio: Most buyers can borrow up to 75% of the property’s value if it’s their first housing loan. The LTV decreases for buyers with outstanding housing loans.
• Loan Tenure: The maximum loan tenure is 30 years for private properties. However, if your loan extends past age 65, the LTV may be reduced further.
• Credit Score: A strong credit rating improves your chances of securing favorable interest rates and loan approval.

Tips for Securing the Best Financing Deal

1. Compare Multiple Loan Packages: Use mortgage comparison tools or speak with a mortgage broker to find the best loan terms suited to your needs.
2. Get a Loan Pre-Approval: This will help you understand your budget and streamline the booking process when you’re ready to purchase a unit.
3. Maintain Financial Stability: Avoid large purchases or job changes during the loan approval process. Lenders favor applicants with consistent income and low debt.
4. Review Lock-In Periods and Penalties: Understand the terms associated with refinancing, early repayment, or selling the property before the lock-in period ends.
5. Consider Long-Term Affordability: While low interest rates may seem attractive, ensure your monthly repayments remain manageable even if rates rise in the future.

Conclusion

Financing your purchase at Faber Residence Condo requires careful planning and a clear understanding of your financial position. With a wide selection of home loan products, flexible repayment schemes, and CPF integration, buyers have ample options to make their dream of owning a home at Faber Residence a reality. By preparing early, comparing offers, and working with experienced professionals, you can enjoy a stress-free buying journey and confidently step into a future of modern, riverside living.