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Construction Loan

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Anyone has experience with construction loan with Ocbc? I just want to check on appointment letter for architect and engineer which is required by them. This letter is usually prepared by who? Owner or the professionals hired?

 

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I think different banks have different requirements. 

DBS just asked me for the approval letter from URA(which contains the architect’s information) or BCA along with the quotation from the builder

 

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Thanks. 

I think that’s fair cuz BCA approval contains the professional person’s details and contract is a form of appointment. 

Whats the period that DBS give you before work commence?

 

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9 hours ago, shmily07 said:

quick check on the range of interest rates for construction loan?

We were told that the construction loan is normally at prime lending rates which is about 5%. But DBS offer to me is at 3.4% +FHR8 which essentially is at 3.9%. the construction loan is based on 75% of the construction cost (from the contractor's quote you submit to the bank). so you don't get full 100% loan for your construction. disbursements will only happen after you have paid 25% of the construction cost to your contractor. eg: construction cost is 1M. bank will loan you 750K. you need to pay 250K to your contractor first before bank will start disbursing the construction loan directly to your contractor based on the contractor's progress claims and certified by the QP.

the construction loan will be converted to home loan after TOP is obtained. rates will then be adjusted to be in sync with the home loan rates.

different banks will have different loan quantum and interest rates so ask around. but if you have an existing home loan from a bank, chances are you will end up getting the construction loan from the same bank if the bank offers construction loans.

 

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