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Will applying approval-in-principle letter from the bank affect my credit history?

A banker says that I can only apply approval-in-principle letter after I pay a deposit with the seller and is about to buy a resale HDB unit. If I apply it and then hunt for a home, the approval letter may expire if it takes a long time for me to find a dream home, and if I re-apply the approval for the second time, the bank may think I apply loans for too many times and this will affect my credit history. Is what he said true?
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2 Answers

Ivan Ng
Replied
Hi,

I think you may have some misconception about the financing process. Perhaps we could discuss further over phone? Thanks and look forward to value-add to your housing plans.

Warm Regards,
Ivan Ng ERA ASAP
(ASk Anything Property)
Proactive. Sincerity. Feedback.
SMU BBM (Finance), Magna Cum Laude

Email: Ivanng10@gmail.com
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Ling CK
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Hi,

I think you have got the whole thing confused.

You need an Approval-In-Principal (AIP or IPA) before starts sourcing for your home.
This is to ensure you are looking for home within your budget. This is critical as not enough means not enough, no miracle about this, unless you suddenly strike a lottery.

An AIP will expire in 6 months or 12 months dependent on individual bank. This period is sufficient for you to find your ideal home.

Upon confirming the exact unit, you will bring this AIP with the OTP to apply for Letter-Of-Offer. This process can be as quick as within 5 working days, and again the time frame is dependent on individual bank.

Applying for AIP does not affect your credit history, as AIP is offer only based on your current individual/home income, thus if you receive an increment by the time you receive OTP, you may even receive higher loan and vice versa.

Do note that AIP will not convert to Letter-Of-Offer automatically. The amount offer might different from AIP again dependent on financial document submitted.

Hope the above answer to your main concerns, but if there are more queries, please feel free to contact me at 90110636  , or email: ling.ck7@gmail.com if more information is needed.
I'll be glad to assist.

Best regards
Ling CK
 90110636 
ling.ck7@gmail.com

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