Property Loan Question

[relpax]

Hi all,

Have some problems while applying for In Principal Approval for Home Loan.

Apparently my Credit Bureau rating is deemed less than satisfactory, hence the bank will reject the loan outright for joint application with my wife.

However, the adviser mentioned that because my wife credit history is clean, she can be the sole borrower for the property loan - and very likely she will be able to get the loan.

My question is this:

I wish to help pay for the loan (via CPF) together with my wife. Can this be done? (i.e. can she be the borrower, while both of us are owners?).

I have twice as much CPF sums than my wife currently.

Thanks for reading.

 

[PsyNidE]

From what I understand, CPF will only deduct the monthly home loan installments from the loan borrower only. Since in this case is only your wife's, only her CPF OA account will be utilized.

 

[relpax]

Is there anyway to "transfer" my CPF funds over to her?

 

[PsyNidE]

Is there anyway to "transfer" my CPF funds over to her?

from what I know, don't think so. You can only transfer to parents, for the reason of supporting your mum/dad who are old. In return, you will get tax rebates for them for income tax.

 

[relpax]

Hi,

I have just called up CPF to clarify.

As long as I am the "legal" owner of the property (i.e. co-owner together with my wife, but my wife being the sole borrower), CPF will allow me to use both our CPF funds to pay for the property loan.

Should I clarify with my mortgage adviser instead? Or is there any MAS rule that forbids me to be an owner when I am not one of the members applying for mortgage loan?

 

[valeon]

How come 1 person apply loan can get through but 2 persons cannot? I thought 2 person are always better since both are liable to the loan.

 

[relpax]

According to the bank, I do not have a "clean" credit bureau record. Hence any joint application will result in rejection.

However, no such problems with my wife's records.

Is it true that if my wife is the sole borrower for the mortgage loan, only she is allowed to repay the mortgage loan via CPF OA? Can I use my CPF OA to pay for the mortgage loan even though I am not the borrower? Of course we can pay the shortfall via cash, but I hope to use my CPF OA to do it.

Will it mean that, in order to "lessen" the pressure on her mortgage payments, we should ask for a smaller loan quantum from the bank, by fulling utilizing my CPF OA funds + part of her CPF OA funds for the initial payment?

Hope someone can advise us.

 

[therat]

but ur wife can loan that amount of loan you all want?

 

[henrylbh]

According to the bank, I do not have a "clean" credit bureau record. Hence any joint application will result in rejection.

However, no such problems with my wife's records.

Is it true that if my wife is the sole borrower for the mortgage loan, only she is allowed to repay the mortgage loan via CPF OA? Can I use my CPF OA to pay for the mortgage loan even though I am not the borrower? Of course we can pay the shortfall via cash, but I hope to use my CPF OA to do it.

Will it mean that, in order to "lessen" the pressure on her mortgage payments, we should ask for a smaller loan quantum from the bank, by fulling utilizing my CPF OA funds + part of her CPF OA funds for the initial payment?

Hope someone can advise us.

Why you still in doubt when you have already clarified with CPF Board?

As long as you are the co-owner of the flat, I am sure you Baord will allow you to use your CPF to pay for the flat or pay to the bank for the flat. It doesn't matter the borrower is your wife.

 

[valkri]

If you are the owner, you can use lump sum payment from CPF OA when you purchase. In this case the payee is HDB/developer/seller.

However, if you are not the person taking the loan, don't think you can set up a monthly mortgage payment from your CPF to the bank.

 

[Jordan]

but ur wife can loan that amount of loan you all want?

Correct! With your wife as sole borrower, is she able to loan that much or not? Unless she really a super high income bracket earner, if you get what I mean.

 

[binni14]

bro send u a pm

According to the bank, I do not have a "clean" credit bureau record. Hence any joint application will result in rejection.

However, no such problems with my wife's records.

Is it true that if my wife is the sole borrower for the mortgage loan, only she is allowed to repay the mortgage loan via CPF OA? Can I use my CPF OA to pay for the mortgage loan even though I am not the borrower? Of course we can pay the shortfall via cash, but I hope to use my CPF OA to do it.

Will it mean that, in order to "lessen" the pressure on her mortgage payments, we should ask for a smaller loan quantum from the bank, by fulling utilizing my CPF OA funds + part of her CPF OA funds for the initial payment?

Hope someone can advise us.

 

[sgproperty-advisor]

According to the bank, I do not have a "clean" credit bureau record. Hence any joint application will result in rejection.

However, no such problems with my wife's records.

Is it true that if my wife is the sole borrower for the mortgage loan, only she is allowed to repay the mortgage loan via CPF OA? Can I use my CPF OA to pay for the mortgage loan even though I am not the borrower? Of course we can pay the shortfall via cash, but I hope to use my CPF OA to do it.

Will it mean that, in order to "lessen" the pressure on her mortgage payments, we should ask for a smaller loan quantum from the bank, by fulling utilizing my CPF OA funds + part of her CPF OA funds for the initial payment?

Hope someone can advise us.

I believe the bank application requires all owners to be mortgagors, hence credit worthiness will be considered. Whether you decide to share the payments is a separate issue. If you need other mortgage advise, let me know. I can help. Cheers.
Sean

 

[relpax]

I believe the bank application requires all owners to be mortgagors, hence credit worthiness will be considered. Whether you decide to share the payments is a separate issue.

Apparently this is what I have found out too. If we are joint owners, both of us need to apply together for the mortgage loan. If only my wife applies for the loan, then only she is the owner of the property. I cannot use my CPF OA funds to pay for the loan because legally I am not the owner.

Are there any ways that we can get around this? Do any banks allow my wife to be sole borrower, while I get to be the guarantor/surety, so that I can pay for the mortgage loan?

We already have 2 joint mortgage loan applications from banks declined. I have checked with the bankers and all of them mentioned my credit history is not satisfactorily as deemed by their credit department. My wife's one is fine however.

 

[sgproperty-advisor]

Apparently this is what I have found out too. If we are joint owners, both of us need to apply together for the mortgage loan. If only my wife applies for the loan, then only she is the owner of the property. I cannot use my CPF OA funds to pay for the loan because legally I am not the owner.

Are there any ways that we can get around this? Do any banks allow my wife to be sole borrower, while I get to be the guarantor/surety, so that I can pay for the mortgage loan?

We already have 2 joint mortgage loan applications from banks declined. I have checked with the bankers and all of them mentioned my credit history is not satisfactorily as deemed by their credit department. My wife's one is fine however.

PM you bro.. Maybe I can help to source for you.

 

[valkri]

Apparently this is what I have found out too. If we are joint owners, both of us need to apply together for the mortgage loan. If only my wife applies for the loan, then only she is the owner of the property. I cannot use my CPF OA funds to pay for the loan because legally I am not the owner.

Are there any ways that we can get around this? Do any banks allow my wife to be sole borrower, while I get to be the guarantor/surety, so that I can pay for the mortgage loan?

We already have 2 joint mortgage loan applications from banks declined. I have checked with the bankers and all of them mentioned my credit history is not satisfactorily as deemed by their credit department. My wife's one is fine however.

Probably if bank rejects you as mortgagor, it will also reject you as guarantor.

Have you explored whether it makes a difference if your ownership is Tenancy-in-Common vs Joint-Tenancy?

 

[PsyNidE]

Probably if bank rejects you as mortgagor, it will also reject you as guarantor.

Have you explored whether it makes a difference if your ownership is Tenancy-in-Common vs Joint-Tenancy?

Tenancy-in-common is not advisable as the co-owner loses the right of the ownership in the demise of the other owner.

 

[henrylbh]

Apparently this is what I have found out too. If we are joint owners, both of us need to apply together for the mortgage loan. If only my wife applies for the loan, then only she is the owner of the property. I cannot use my CPF OA funds to pay for the loan because legally I am not the owner.

Are there any ways that we can get around this? Do any banks allow my wife to be sole borrower, while I get to be the guarantor/surety, so that I can pay for the mortgage loan?

We already have 2 joint mortgage loan applications from banks declined. I have checked with the bankers and all of them mentioned my credit history is not satisfactorily as deemed by their credit department. My wife's one is fine however.

Most likely reason why the bank will not accept the use of your CPF to pay for your spouse's mortgage is the security risk in event of default. The bank doesnt care who pays for the mortgage. But because you are using your CPF to pay your joint owner's mortgage, the bank may not be able to have priority over the sale proceeds in the event of default as your CPF need to be returned with interest to your account as you are not a borrower.

 

[valkri]

Tenancy-in-common is not advisable as the co-owner loses the right of the ownership in the demise of the other owner.

No. TIC - you can specify the ownership % of each owner. Demise of the co-owner only affects his/her share of the property, which shall be treat as estate.

 

[PsyNidE]

No. TIC - you can specify the ownership % of each owner. Demise of the co-owner only affects his/her share of the property, which shall be treat as estate.

Precisely so there isn't a right of survivorship, meaning the co-owner do not get the portion of the deceased automatically :

http://www.hdb.gov.sg/fi10/fi10326p.nsf/w/ChgOwnerTypesOfTransfers?OpenDocument#JointTenacy

Its gonna be troublesome for the co-owner. Joint-Tenancy is much easier.