Do you have AIP? Or when are you getting your ABSD.
Even if they elaborate things.
Do you have approval-in-principle? or when are you getting your additional buyer’s stamp duty?
Unless you are asking an agent directly for these, you probably grab your phone and start searching for the meanings.
And if you are going to the world of property, you will need to start to learn and memorise some of the terms. It will serve you good later on.
Approval-In-Principle (AIP) or In-principle Approval (IPA) – In-form of paper, this document will be given to you (the one who buy a property) by a bank. It will highlight how much money the bank is willing to loan (If you are buying it on bank-loan).
- Additional Buyer’s Stamp Duty (ABSD) – If this is your second property purchase (and some others in the future), you will have some of the tax levied by the government.
- Board Rate – This is an index used by banks to determine your loan’s interest rate. Every bank will have a different rate.
- Bridging Loan – Let’s say you have a property you are going to sell and planning to use that money to buy a property. There are some chances that your payment of the new property will due before you can collect the money from selling your property. This loan will help you to solve just that.
- Cancellation Fee – This occurs when a bank offers you an offer letter of a loan but you chose not to proceed with it.
- Certificate of Statutory Completion (CSC) and Temporary Occupation Permit (TOP) – This is a proof that the building is stable and suitable to be occupied by tenants. Usually released by Commissioner of Building Control.
- Combo Housing Loan – Let’s say you have a $100.000 loan. The loan is then divided into $60.000 (using fix rate of x%) and $40.000 (using floating rate of y%). It is more like diversifying your loan.
- Fire Insurance – This is not an insurance for you, but for your property to protect it against fire. If you are HDB flat owners and using home loans from banks, you will need to have it.
- Fixed Interest Rate – Your interest will be locked. Even when the market crash or all time high, your interest will stay the same.
- Floating Interest Rate – Your interest will be adapting to the market conditions. When the market is bad, your interest will increase and when it is good, it will decrease. The bank will be able to further advise you on this interest.
- Foreclosure – If you cannot pay the money to the bank (for several times), the bank will then seize control of your property and do whatever they want to recover their money from it. Sometimes, they will sell it in auction or third party.
- Haircuts – No, your property is not having a haircut. It is a reduction to the value of your financial asset or income stream.
Ready to find out more? Click here for part 2.