Approval in Principle from bank for HDB?

I’ve successfully balloted for my BTO and have already signed the Option to Purchase, with the intention to take a bank loan. HDB mentioned that I’ll be required to attend an appointment in the coming months to pay the first downpayment. I’d like to clarify whether I only need to obtain an Approval in Principle (AIP) from any bank at this stage, and whether securing an AIP does not constitute a commitment to take up the mortgage with that bank when I eventually collect my keys. Additionally, is it advisable to obtain multiple AIPs for comparison before making the final decision closer to key collection?

Hi there, congrats on your BTO and signing the option to purchase!

Yes, you are right, an AIP is not a commitment to sign a loan with that particular bank. It is just an indicator of your creditworthiness at this point in time. If you're planning to apply for a bank loan only near the key collection date, getting an AIP now isn't really relevant.

What I can suggest is to declare that you're taking an HDB loan or not taking a loan in order to pay a smaller downpayment and avoid paying any portion of the downpayment in cash. Then, when it's about 6 months before the key collection date, apply for that bank loan.

Why 6 months? So that the process of obtaining the bank loan does not delay your key collection.

Hope this clarifies!