In general, banks do not have a preference of one type of property over the other, be it freehold or leasehold. Loan underwriting is dependent on the value of the property and the financial health of the borrower, rather than the type of title of the property. However, when reviewing an application for financing of leasehold properties, lenders will take the remaining tenure left on the property lease into consideration in order to ensure it is reasonably long enough to cover the loan repayment period. So, when you are considering buying a leasehold property, you should always take a look at the remaining tenure and renewal possibilities before deciding whether to make a purchase.
Besides this single additional consideration, the financing approval process for both freehold and leasehold properties is exactly the same. And no, there are no additional documents required when applying for financing for a leasehold property.
All in all, buying a property is really up to your preference and it is never a one-is-better-than-the-other scenario. Regardless of which type of property you are looking to buy, it is your bank’s responsibility to match the best financing options for your means so that you are not saddled by excessive financial commitments. Whatever you decide, do come to talk to us and we will have the right advice for you.
