3 Challenges Homebuyers May Encounter When Getting A Property Loan (Solutions Included!)

3 Challenges Homebuyers May Encounter When Getting A Property Loan (Solutions Included!)
3 Challenges Homebuyers May Encounter When Getting A Property Loan (Solutions Included!)

When thinking about financing a new home purchase, homebuyers will typically pay detailed attention to the property price, as well as how much they can afford for the downpayment and the monthly instalments to be made. They may also focus on other non-financial aspects of their purchase such as the property’s location, view and condition.

Thinking about the home loan you need to secure can sometimes be seen as a secondary consideration. The general assumption is that the bank will lend the money required to home buyers as long as they are willing to take the loan. This, however, is not always true. 

Similarly, homeowners who are already living in their homes for a while may not realise that refinancing their home loan may lead to a cheaper home loan.


A Better Home Loan Package Can Make A Big Difference

The truth is that a home loan, whether it’s securing a new loan or refinancing your existing loan, is a major component of your property purchase journey. In Singapore, home financing typically goes into the hundreds of thousands, if not millions, and span two to three decades. This means saving even a small percentage on your home loan’s interest rate can lead to substantial savings over time.

For example, if you can save just 0.1% per annum on your home loan rate. A $1 million home loan will cost you $1,000 less each year. This is easily the cost of an yearly holiday to Bali (or staycation) for the family.

If you can get a better rate over the span of your 25 years home loan, your savings will add up to a lot of money.




Singaporeans Are Paying Attention To Bank Home Loan Rates When Buying A Property

PropertyGuru’s Singapore Consumer Sentiment Study H1 2021 found that 79% of new homebuyers prefer taking a bank home loan. Bank home loans are typically more flexible, open to buyers of both HDB flats or private properties, as well as offer a cheaper interest rate.

While the majority of those in the study were aiming to get bank loans for their property purchases, many still found it a challenging task. We asked them what the hardest thing was when they were trying to get their bank home loan – and received three main responses.


1. Just Too Many Home Loan Options in The Market

More than 40% of the respondents cited that there were too many home loan packages to compare. 

There are more than 10 banks that you can get a home loan package from. Each of these banks offer both fixed and flexible home loan packages, and sometimes more than one within each category. This means there are potentially several dozen home loan packages that homebuyers can compare, either when buying a new property or refinancing their existing loan. 

A common outcome is analysis paralysis – where consumers become overwhelmed with choices and ultimately may not make an ideal decision.

Furthermore, apart from your home loan, there are easily dozens of other decisions that you will have to make when buying a new home, including choosing a home after viewing many properties, getting an interior designer to help you with renovation works, and buying the right furniture to spruce up your dream home. 

For consumers, having more options is never a bad thing. When there are more options to choose our home loans from, it keeps interest rates competitive and service at a high level. 

The Solution to Having Too Many Choices:

To avoid being paralysed to make a decision, you can opt to use PropertyGuru’s handy home loan comparison tool – which does the heavy lifting by helping you compare the best rates from over 140 rates currently being offered. You can even filter the results by:

  • The property type
  • Whether the building is completed or in construction
  • Loan amount
  • Loan tenure 

Using your inputs, we’ll narrow down the types of home loan packages that are most suitable for you. If you still have trouble choosing the best one, you can choose to speak to one of our trusted home loan advisors who can recommend a package based on your unique financial and family situation.

This way, you can concentrate your decision-making requirements on things that you are more interested in – such as the renovation works or choosing your dream home after numerous viewings.


2. Difficulties Checking On Application Status After Application

About 20% of respondents indicated that it was troublesome to check on the status of their application once they had applied for their home loan. This is a real problem as homebuyers may want to close the deal as quickly as possible, while sellers can sell to someone else who comes with a better offer or ability to close more quickly.

As there is quite a bit of paperwork involved during the application phase, it is trickier to check on the status of your application. When you want to check on your applications, you also have to spend time on the bank hotline or go through various representatives before being told that “your application is still being processed”, without really knowing why. 

The Solution to Difficulties in Checking Application Status

You can also choose to work with an experienced and trusted home loan advisor, such as PropertyGuru Finance. We can help you with your home application process and advise you on the necessary paperwork required for submission to smoothen and expedite the application process. 

Having years of experience in the industry and managing such applications on a daily basis, you can rely on our trusted home loan advisors to provide you with insights on whether your home loan application is a straightforward one or may be lengthier due to certain circumstances.

PropertyGuru Finance will also guide you along the way should you have questions and regularly check in your home loan application status to update you in a timely manner.


3. The Home Loan Application Process Takes Too Long

16% of respondents on our Consumer Sentiments Study H1 2021 said that one of the most difficult things about applying for a home loan was the waiting time.

As mentioned, home loan applications can be tricky. There is a fair bit of paperwork involved and the bank you are applying the loan with have to assess the paperwork you have submitted. If there is any missing information or additional information required, you may find the bank coming back to you with further questions/requirements, which will only lengthen the process.

The Solution To Shortening The Application Process:

There’s no shortcut to this. A home loan application needs to be processed by the bank and it can take some time.

What is in your hands is preparing your paperwork early and ensuring they are all in order. Once again, leaning on the experience of a trusted home loan advisor from PropertyGuru Finance can undoubtedly speed up the process. 

Having worked in the industry for many years, our advisors have in-depth knowledge about home loans. PropertyGuru Finance does not charge for this support. 

Instead, our priority is to give consumers a holistic property purchase journey on PropertyGuru – from finding your dream home to having a smooth process in financing your purchase. 


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Disclaimer: Information provided on this website is general in nature and does not constitute financial advice.

PropertyGuru will endeavour to update the website as needed. However, information can change without notice and we do not guarantee the accuracy of information on the website, including information provided by third parties, at any particular time.Whilst every effort has been made to ensure that the information provided is accurate, individuals must not rely on this information to make a financial or investment decision. Before making any decision, we recommend you consult a financial planner or your bank to take into account your particular financial situation and individual needs.PropertyGuru does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this website. Except insofar as any liability under statute cannot be excluded, PropertyGuru, its employees do not accept any liability for any error or omission on this web site or for any resulting loss or damage suffered by the recipient or any other person.

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