How does the New Cooling Measure (wef 12 Jan 2013) affect you as a buyer/seller?

As soon as the cooling measure took place, several clients call me to enquire on the new measure.

After gathering all the information, let me summarize and let you know
How does the New Cooling Measure going to affect you??

1)  Residential Property:  Seller Stamp Duty (SSD) (wef 14012011)

• Within the 1st year: 16% of price or market valuation, whichever is higher
• 1st year - 2nd year : 12% of price or market valuation, whichever is higher
• 2nd year - 3rd year : 8% of price or market valuation, whichever is higher
• 3rd year - 4th year : 4% of price or market valuation, whichever is higher

2) Residential Property: Additional Buyer Stamp Duty (ABSD) before and after Cooling Measure (wef 12012013).

3) Residential Property: How does the Loan To Valuation ( LTV) affect you? (wef 12012013)

4) HDB: Mortgage Servicing Ratio (MSR) (wef 12012013)Bank Loan : MSR capped at 30% of borrower's gross monthly income
HDB loan: MSR lowered from 40% to 35%


5) Industrial Property:  How does  the Seller Stamp Duty (SSD) affect you? (wef 12012013)

• Within 1st year: 15% of price or market valuation, whichever is higher
• 1st - 2nd year: 10% of price or market valuation, whichever is higher
• 2nd - 3rd year: 5% of price or market valuation, whichever is higher

If you have any question unsolved, you can either get me via my Mobile at 9 1 7 6 7 9 7 0 or email me at den@housingmatters.com.sg or even drop a comment below :

Den Ng
Housing Matters
http://www.housingmatters.com.sg

What's your View on the Bank Mortgage Rate?

Most my clients have asked me on my opinions on the future Mortgage Rates.  Many a time, I replied, how low do you think the Mortgage Rate can go, at most down 0.37% to 0%.

As at 24 Jan 2013, 3 mth Sibor is 0.37667%, the lowest in the whole year of 2012 but do take note that Bank Mortgage Fixed interest rate and the spread (ie 3mth Sibor + 0.85% ) has been hiking since last year.

What does it implies? It’s up to you to analyse.

Most of the seasoned property investor has gone through the below mention few cycle and learn their lesson from there.

4th Quarter of 2000, during Dot-com Bubble, 3mth Sibor is more than 2.5% 
3rd Quarter of 2001, during  S11 Attack,   3mth Sibor is more than 2%,
1st quarter of 2004, during SARS Period,  3mth Sibor  is more than 2% and thereafter peak up to more than 4%,
1st Quarter of 2008, during the Property Bloom period, 3 mth Sibor is more than 3.5%

I have check with a few seasoned property investors on their views on the Mortgage rates in the next few year and most of them think that Sibor will hover around the current rate till end of 2015 but they are cautious and prepared for the hike.

Most importantly is, are you prepared or are you still planning to let your rental merely cover your monthly installment?

Most of the Mortgage Broker will want you to take up no lock in Sibor /SOR package, so that repeat business will come fast when the interest rate hike.

But do you really think that it is worthwhile for you to take that package especially when most bank doesn't give legal subsidy nowadays?

Recently, I got my banker to deviate a Sibor package for my client after he “hear say” from his friend that the rates will stay as it is till end 2015.

                  Deviated Sibor Rate                                          Current Fixed Rate
   1st year: 3mth Sibor + 0.80% = 1.17667%                  1st  year: 1.15%(fixed)
   2nd year: 3mth Sibor + 0.80% = 1.17667%                 2nd year: 1.35%(fixed)
   3rd year: 3mth Sibor + 0.80% = 1.17667%                  3rd year 1.45% (fixed)

My question to you is, are you willing to take the risk.

Based on average of  3 years ,the difference of deviated Sibor rates as compared to the Best fixed rate is just 0.140% apart , if Sibor rate stay at 0.37667% throughout the three year.
Ask yourself this question, do you think that Sibor will stay as it is, till 3 years later?

What are your views on the Mortgage Rate? Will it hike , stay as it is or you think that it will still go down?

Let's Share... :)


If you have any question unsolved, you can either get me via my Mobile at 9 1 7 6 7 9 7 0 or email me at den@housingmatters.com.sg or even drop a comment below :

Den Ng
Housing Matters
http://www.housingmatters.com.sg

Q & A for Housing Loan

Below are question asked by some of my client and i hope that this will answer your query too...

1) What is Approval In Principle (AIP) or others call it In Principle Approval (IPA)?

It is a verbal agreement by the bank, showing the amount they are potentially prepared to lend to you, based on your financial ability and the credit history. It is not a guarantee, but it do help customer to gauge the range that the bank is able to finance them and to choose a property of that range.


2) Does all bank give the same amount for AIP/IPA?

No, different bank set different criteria. It varies throughout the banks.


3) What is the difference between Repricing and Refinancing?

Repricing mainly is to negotiate a better rate within the same bank while refinancing is to switch a bank for a better rate


4) What is the difference between going straight to the bank and getting a Mortgage Broker to serve me?

There are more than 10 banks / Financial Institute in Singapore, 0.10% - 0.2% makes a difference on the interest you paid yearly. If Bank A only sell Sibor package, Banker A will tell you that Sibor Package is best and others cant fight them .
For Mortgage Broker, we consolidate rates from almost all banks in Singapore , source the best rate for you and tailor it to suits your risk level.
Moreover, we do quarterly / half yearly review on customer package to determine if they require a switch of bank.


5) Do we have to pay Mortgage Broker for their Service?

Most bank remunerate brokers for their service and normally broker service are FREE (unless otherwise stated)


6) Since the bank is paying Mortgage Broker , will Mortgage Broker still source us the Best rate in the Market?

Mortgage Broker are remunerate based on a percentage of the loan, getting you the best package wont affect their commission, so in order to get more repeat customer and referrals, Mortgage Broker will source you the best rates, based on your risk taking level.

7) What are the basic documentation required for Approval In Principle (AIP)?
1) CPF OA account (CPF website –> My Statement -> Section A <print this section>)
2) CPF Contribution History ( CPF website –> My Statement -> Section B )
3) CPF Property Withdrawal Statement (CPF website –> My Statement -> Section C -> Property - > My Private Housing Withdrawal Details)
4) 2 years income tax & 3month payslip (IRAS Website -> Correspondence & Notices -> Individual Income Tax (Letter/Notices) -> Letter/Notices -> Notice of Assessment (Individual)
5) IC copy front n back
6) HDB Declaration  Will need an additional document for processing more than 60% financing for Singaporean and SPR - Please go to HDB's website athttp://www.hdb.gov.sg/MyHDBPageto do a screenshot, to show that you do not own any HDB or have any HDB housing loan currently. (Under 'My Flat > Purchased Flat > Financial)
7) Signed Application Form
8) Credit card/Personal Loan/ Car Loan /Overdraft etc Statement (record under Credit Bureau) (upon banker request)


8) What are the basic documentation required for a financing of property?

For New Purchase,

1) CPF OA account (CPF website –> My Statement -> Section A <print this section>)
2) CPF Contribution History ( CPF website –> My Statement -> Section B )
3) CPF Property Withdrawal Statement (CPF website –> My Statement -> Section C -> Property - > My Private Housing Withdrawal Details)
4) 2 years income tax & 3month payslip (IRAS Website -> Correspondence & Notices -> Individual Income Tax (Letter/Notices) -> Letter/Notices -> Notice of Assessment (Individual)
5) IC copy front n back
6) HDB Declaration  Will need an additional document for processing more than 60% financing for Singaporean and SPR - Please go to HDB's website athttp://www.hdb.gov.sg/MyHDBPageto do a screenshot, to show that you do not own any HDB or have any HDB housing loan currently. (Under 'My Flat > Purchased Flat > Financial)
7) Signed Application Form
8) Option To Purchase / Sale & Purchase Agreement
9) Credit card/Personal Loan/ Car Loan /Overdraft etc Statement (record under Credit Bureau) (upon banker request)


For Refinancing,

1) CPF OA account ( CPF website –> My Statement -> Section A <print this section>)
2) CPF Contribution History ( CPF website –> My Statement -> Section B )
3) CPF Property Withdrawal Statement (CPF website –> My Statement -> Section C -> Property - > My Private Housing Withdrawal Details)
4) 2 years income tax & 3month payslip (IRAS Website -> Correspondence & Notices -> Individual Income Tax (Letter/Notices) -> Letter/Notices -> Notice of Assessment (Individual)
5) IC copy front n back
6) HDB Declaration Will need an additional document for processing more than 60% financing for Singaporean and SPR - Please go to HDB's website athttp://www.hdb.gov.sg/MyHDBPageto do a screenshot, to show that you do not own any HDB or have any HDB housing loan currently. (Under 'My Flat > Purchased Flat > Financial)
7) Signed Application Form
8) Loan Repayment Statement
9) Credit card/Personal Loan/ Car Loan /Overdraft etc Statement (record under Credit Bureau) (upon banker request)
10) Previous Letter of Offer



If you have any question unsolved, you can either get me via my Mobile at 9 1 7 6 7 9 7 0 or email me at den@housingmatters.com.sg or even drop a comment below :

Den Ng
Housing Matters
http://www.housingmatters.com.sg

Free Advice/Discussion on Bank Housing loan (Singapore)

Many people will be scratching their head to decide on which bank to go to for their financing/refinancing .
There are few groups of people using different method to get their "ideal" bank loan:

1) Group A : Just use the banker, their property agent recommend.
2) Group B : Just listen to their friend on which bank they went to recently.
3) Group C : Spend their time going from bank to bank to search for the Best rate
4) Group D : Just stick with the same bank as a Loyal customer throughout their loan tenure.
5) Group E : Get a Mortgage Broker to source the best rate in the market for them

Let me analyst each group for you and you decide which group you want to be in ...


1) Group A : Just use the banker, their property agent recommend.
Property Agent Core business is to Buy/Rent/Sell their client property. Normally Property Agent will just recommend their client to the banker they know. But are those banker in Bank which gives the Best Rate in the Market?

Is 3 years fixed at 1.35% the Best Rate in the market?
To most People who doesnt do much market research: It is!

But as a Mortgage Broker who does research on rates on every bank updates:
My answer is "There is still better rates"


2) Group B : Just listen to their friend on which bank they went to recently.
Time flies and Rate changes almost every few weeks.
Friend A took up a package last year , he will tell you that his rate is better than yours
Friend B took up a package 4 years back and have yet to refinance, he will tell you that you have the best package in the market. So which friend you go to?

Recently a client told me "My friend told me that he got a good rate, 3mth Sibor + 0.50%, how come you are recommending me 3mth Sibor + 0.80% "
Knowing that the rate he mention is absolutely impossible , I ask him to give me "his friend's banker contact" , so that i can refer all my client over to the "Bank" he mention. After checking , my client mention that his friend took up the package almost 1 year ago. So getting the package is impossible.

In the end, my client took up the package i recommend.3) Group C : Spend their time going from Bank to Bank to search for the Best Rate
There are more than 10 Banks/Financial Institute in the Market. Have you go into each and every Bank/Financial Institute to check on their rate ?? Or you have only enter a few Local bank and already made your decision?

Don't be surprise that at times, Foreign Bank and Financial Institute offer a Better interest rate.

                                                           3 years Fixed
                                      Bank A                                   Bank B
                                1st year : 1.58%         Vs        1st year: 1.15%
                                2nd year: 1.58%                     2nd year: 1.35%
                                3rd year: 1.58%                      3rd year: 1.45%

Based on 30 years loan tenure, $1mil loan size comparison, you will be paying $10,888.65 more within 3 years!!
Rather than paying $10,888.65 extra to the bank, Why dont you use $10,000 for your partial repayment after the 3rd year and $888.65 for a Great Dining with your Mortgage Broker :)


4) Group D : Just stick with the same bank as a Loyal customer throughout their loan tenure.
Loyalty Pay. What  i mean is be Loyal and you shall Pay more. There is no Bank which will call up their client to tell them that their rates have already reach the peak.

Recently I done a refinance for my client who is a Loyal Customer to his bank for more than 5 years.
How much do you think he can save on a small loan size of $233,509??

1) Reduce interest from 3.75% to 1.3167%(average) - Saving of around 2.4%
2) Reduce loan Tenor from 27 years to 15 years
3) Client Increase Monthly Instalment based on his Comfort Level from $1,147.14 - $1428.99 (average) [increase of $281.85]

Client SAVE $44k within 3 years after he made the Switch!!!5) Group E : Get a Mortgage Broker to source the best rate in the market for them
Mortgage Broker update themselves with Bank rates , analyst and source for the Best Mortgage loan in the Market for our client based on their Risk Level.

Bank A offers Fixed Rate and Sibor Package
Bank B offers Fixed Rate and SOR Package

Banker in Bank A will tell their client how good is their Sibor Package and not telling their client how low is SOR rates right now.
Reason  : They do not have SOR package, if they say SOR is low, they might risk losing a customer.

Based on client's needs and Risk Appetite, Mortgage Broker tailor the Best package in the market for them.
Reason: Either bank the brokers go to, Bank will renumerate them based on a percentage of the loan. To secure repeat business and more referral, Mortgage broker will source the Best Rate for their client.


If you have any question unsolved, you can either get me via my Mobile at 9 1 7 6 7 9 7 0 or email me at den@housingmatters.com.sg or even drop a comment below :

Den Ng
Housing Matters
http://www.housingmatters.com.sg