Step 1: To determine the type of holding for the new property.
There are few major ways you can hold commercial property. It is depending on the resources you have and the objective you want to achieve.
From mortgage point of view, it is a key factor for loan approval & the loan amount.
a) Private Limited Company - (Excluding investment holding company)
The loan amount & approval. is mainly depending on the company overall
financial stand and the personal guarantor(s) financial status.
Each bank has its own guideline for loan approval.
b) Sole Propriotor, Partnership, LLP, Newly Set up company,
Investment holding company, Individual.
TDSR regulation is applied for the loan approval. Which means that, the loan
amount is limited by personal income & other loan commitment.
TDSR (Total-debt-servicing-ratio): The new mortgage repayment & your other existing loan monthly commitment should not exceed 60% of your combine
income. If the subject property is an investment property with minimum 6 months
balance lease, this portion of income could be included into the total income.
b) What is the maximum Loan-to-valuation (LTV)?
i) Own occupy property could always apply for 80% loan.
ii) Investment property normally highest LTV is 70%. It is also possible to get 80%
for certain type or area property. eg. Office unit or retail shop in CBD area, the
borrower could always try to apply for 80% Loan.
Once you know your maximum loan borrowing capacity, you can always work backward to derive your budget for new property purchase
To determine the property is to be hold under what what type of entity?
In-principle Approval from at least 1 bank
Step 2: Apply for IPA (In-principle-Approval)
It is an important step. With a written IPA from bank will give you a peace of mind for securing a mortgage and avoid unnecessary lost of booking fee. We always ask our client do not underestimate this step especially under stringent regulation and check in bank.
We will recommend you a few bank packages based on your criteria, and assist you on the documentation and follow up with respective banker.
Normally, IPA only last for 1 month. Any annoucement of new regulation, IPA will always become obselete.