Financial planning is the first stage in your home buying journey. It involves finding out whether you are truly ready to purchase your first home.
Not only that, you need to identify the requirements and costs of home ownership.
Aspiring homeowners are usually unfamiliar with the process of obtaining an HDB loan and HDB Loan Eligibility (HLE) letter, which is a crucial step in purchasing a flat.
6 Things You Need to Know About Applying for an HDB Loan
1.What is an HLE letter?
First, you need to get the HDB Loan Eligibility (HLE) letter, a financial planning tool issued by the HDB that provides information on the following:
- Eligible loan amount
- Monthly instalments
- Repayment period
- Amount of cash proceeds from disposal of the existing or previous flat to be used to pay for the next flat (if applying for second HDB concessionary housing loan)
- Other terms and conditions
2. How can I get an HLE letter?
You can request for an HLE letter online. Visit the HDB website and follow the instructions given. It takes less than an hour to complete the process, provided you have all the required documents ready. These are also listed on the page.
3. What is the validity of an HLE letter?
It is valid for six months from the date of issue. A week before the expiry of the HLE letter, you may apply for a new one if you still need a valid HLE letter.
There is no need for re-assessment during the six-month period, so long as there are no changes in your financial position and the status of your family members.
4. What situations require a review of an HLE letter?
The loan offer will be reviewed by the HDB if:
- Any given information is untrue or incorrect
- There are any changes in your household income, family nucleus, or other circumstances that may affect your eligibility for an HDB housing loan and purchase.
- You and the family members listed in the application do not comply with any of the terms and conditions to buy a flat and/ or take an HDB housing loan
- There are any changes in HDB policies which may affect your eligibility to buy a flat and/ or take an HDB housing loan
If you have purchased an uncompleted flat from the HDB, the board will review your financial position nearer the completion of the flat. This is to confirm that there is no change in your ability to service the housing loan.
5. Can I apply for an HDB loan and obtain an HDB letter multiple times?
If you have disbursed an HDB loan in the past, you have to wait for 30 months from the date of disbursement before you can apply for another loan.
6. Can I use an HDB loan for a 2-room Flexi Flat on a short lease?
There is no mortgage loan financing for the purchase of this type of flat. You will have to pay for the flat using your cash and/or CPF savings.
Are you ready to buy your dream home? Here’s a step-by-step guide when buying a resale flat for Singapore Citizens. If you are a Singapore Permanent Resident (SPR), you need to be an SPR for at least three years to buy an HDB flat.
If you need assistance when buying a resale flat, save on agent fees by engaging our in-house property agents from $2,288