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Singapore Refinancing Your Home

Felicia Chew — Sat, 06 Mar 2010 20:58:29 +0000

Even though refinancing a mortgage can save you thousands of dollars you will be stunned that not that many individuals in reality take the time to do it. If you considered the time it requires and figure out the cost saving and equate that to how much you get paid per hour it could be like not going to work for several weeks. Consider the following aspects so that you can see how easy it is to refinance your home loan today.

Current Mortgage Interest Rate

It is decidedly a good indication for you to research refinancing when your current interest rate is higher than available mortgage packages on the market. A first step to take is to go back to your current bank or financial institution and ask them to revise your package, otherwise known as repricing. If your lender comes back with an offer, it will ordinarily be better than your existing one. You can then compare this offer with offers from other lenders to see whether you should switch or stay put.

Lock-in and Clawback Periods

When you take up a mortgage, there may be a lock-in period where your housing lender will charge you a penalty fee, normally a percentage of your outstanding loan amount, if you were to fully repay your home loan. Almost all mortgages also come with a clawback period where the lender will claim back “freebies”, such as legal expenses, that they “gave” you when you take up your loan (Note: lock-in period is separate from clawback period). It may not be worthwhile for you to refinance due to such costs.

Loan Quantum

The larger your loan amount, the greater your savings for the same decrease in interest rates. For instance, 1% on a loan of S$100,000 is much less than 1% on a loan of S$500,000. However, fixed cost to refinancing, which represents mainly of legal fees, do not vary much with loan quantum. The difference between your current and refinancing interest rates, therefore, has to be bigger for a relatively smaller mortgage as fixed cost eats into a more substantial portion of your interest rate savings.

Perceived Interest Rate Movements

Your view on how interest rates is moving can be a factor when thinking whether you should refinance. If you are presently on a fixed rate package and think interest rates are dropping, you may want to refinance to a floating rate package. Conversely, if you are on floating rates and believe interest rates are skyrocketing, converting to fixed rates may be a solid choice.

Personal Financial Assessment

If there is a change in your financial state, you may want to vary your package details via refinancing. For instance, you are opening your own company and do not want unpredictability in other areas. Give some consideration to taking up a fixed rate package. Maybe you want cash to invest in another property. Consider increasing your loan quantum. Or your monthly income has increased and you want to reduce interest loan payments. Consider reducing your loan tenure.

Consider calling us today if you are looking for refinancing in Singapore. We can save you a lot of money plus give you the latest advice all for free.

Article Source: Singapore Refinancing Your Home

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Hints for Emigrants Going For a Housing Loan

Henry Smith — Thu, 17 Dec 2009 21:07:35 +0000

There are two types of housing loan packages in Singapore: fixed rates or floating (variable) rates.

Fixed rates are sometimes offered for up to 3 years. Still, other lenders can extend up to 5 years or 10 years. This is different from many Western countries where rates can be fixed throughout the loan tenure.

Floating rates can be classified into published rates or board rates. Published rates are mainly rates that are published daily, case being the Singapore Interbank Offered Rate (SIBOR) or Singapore Swap Offer Rate (SOR), while board rates are decided by the individual bank or financial institution. Many of the lenders placed their board rates to a certain financial bench marks, yet the exact elements are sometimes not clear and variations in board rates become indefinite.

There are no limitations for emigrants applying for housing loans. Still, the following constituents should be dealt.

Loan to Value

The maximum loan to value (LTV) in Singapore is 90% of the purchase price or valuation, whichever is lower. Some loaners do not give maximum LTV to emigrants, thus, housing loan packages for 90% financing are restricted. Loan approval for 90% funding is also stricter than for LTV 80% and below.

Income Proof

A letter of appointment from your local employer or your latest income tax assessment is required for housing loan. Tax assessments from some countries may not be respected by the local mortgage lenders.

Landed Property

The approval from Singapore Land Authority is necessary before emigrants can buy bounded properties such as vacant estate or landed properties such as bungalows, semi-detached, and terrace houses.

In-principle Approval

Try to apply for an in-principle approval before moving with a purchase, since loan applications are more intricate for emigrants. Consider of hiring a respectable and professional housing loan consultant. This may help you spare time and money with your loan approval.

Find out more about a premier housing loan advisory firm, providing housing loans with free mortgage broking. Get a totally unique version of this article from our article submission service

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Reinvest Your Home

Myra Hopkins — Thu, 17 Dec 2009 14:22:52 +0000

Most of the people don’t know that take can change their loan to other investor; others are simply uninterested. They tend to be loyal with their very first lender but they don’t know that such loyalty will bring higher interest rates. Because of increasing number of housing loans and amortization period, the interest can range from thousands to hundreds of thousands of money. The following factors may help you consider reinvesting your home.

Latest Interest Rate

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If your latest interest rate is higher than other housing loan packages, consider reinvesting. Go back to your current bank or financial institution and ask them to reprice your loan package. Most likely, your lender will give you an offer, which is better than your current one. Make a comparison between this offer and with offers from other lenders to see whether you should switch or stay put.
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Lock-in and Clawback Time Periods

Lock-in period is when your lender give you a penalty if you want to fully repay your loan. Many housing loans have drawback period. This is when the lender will take back what they gave you when you get your housing loan. Lock-in period is different from clawback period. Because of this, reinvesting is not recommended.

Loan Quantum

If the amount of your loan is larger, the savings for the same decrease in interest rates will also be also larger. However, fixed cost to reinvesting, which comprises mainly of legal fees, does not vary much with loan quantum. The difference between your current and reinvesting interest rates has to be larger for a relatively smaller loan as fixed cost consumes into a more significant portion of your interest rate savings.

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Identify Interest Rate Movements

Analyze how interest rates flow. If you are currently on a fixed rate package and believe interest rates are dropping, you may want to reinvest to a floating rate package. Conversely, if you are on floating rates and believe interest rates are increasing, switching to fixed rates may be a good choice.

Own Financial Evaluation

Think of reinvesting when your financial states change. Try to get a fixed rate package. Think of increasing your loan quantum. When your monthly income increased and you want to decrease interest payments, try to reduce your loan tenure.

Learn more about a premier Housing Loan advisory firm, providing Housing Loans with free mortgage broking. Get a totally unique version of this article from our article submission service