Mortgage Jargon K-O
LDAU Approval
Foreigners who want to purchase landed properties in Singapore must first seek the approval of LDAU (Lands Dealing (Approval) Unit – Singapore Land Authorities).
Letter of Offer
Commonly referred to as “LO”, it is a formal written offer made by a financial institution to the potential borrower detailing the terms and conditions of the loan offered.
Loan to Valuation
Also referred as LTV is the ratio of the amount lent to the valuation of the security (usually the property).
Monthly-Rest
Also known as monthly-reducing, the interest will be calculated on the outstanding principal at the start of each month.
Mortgage Broker
Mortgage broker is the person or a juridical entity that mediates between the borrower and the lender and earns a fee upon the success of the transaction.
Mortgage Reducing Insurance
A type of insurance purchased for the sole purpose of protecting the outstanding loan. The insurance cover is equivalent with the outstanding loan amount.
Option To Purchase
A legal agreement offered by the vendor to the purchaser detailing the terms and conditions of the sale of property. If accepted by the purchaser with an option deposit also known as consideration, the vendor is legally bound by the contract to give the purchaser a further cooling off period to reconsider the purchase.
Overdraft
Is a credit facility on a revolving basis which may be secured by the mortgage of a property.
