For those who are planning to finance or refinance your property, grab the chance to get low fixed rate now before it start hiking up.
Some banks have removed their fixed package while others increase quietly.
Do drop me a call/sms at 9176 7970 or email me at den@housingmatters.com.sg for a no obligation discussion.
Den Ng
Housing Matters
http://www.housingmatters.com.sg
Jul 9, 2013
Jul 2, 2013
Don't always get "Cheated" by "Good rates" offered!!
Based on the Proposal, which Bank is offering a better package if there isn't any special clauses involved?
Of course is Bank B!!
Bank A
Bank B
But Wait!!!
For BUC property if the project complete within 2 year ( which is quite rare ) you are still bound to pay a Cancellation Fee of the undisbursed fund if you were to refinance!!
Bank A
1) Interest paid: $5390.65
2) Principal paid: $12,761.64
3) Principal at end of 2 years: $337,238.36
Bank B
1) Interest paid: $5019.78
2) Principal paid: $12973.76
3) Principal at end of 2 years: $337,026.24
Difference?
1) Interest : $5390.65 - $5019.78 = $370.87
2) Principal: $12,761.64 - $12,973.76 = $212.12
3) Prinicipal at end of 2 years: $337,238.36 - $337,026.24 = $212.12
Total Difference: $370.87 + $212.12 + $212.12 = $795.11
If you reprice and get a Good rate with Bank B, Congrats!!! You are saving $795.11 but if you were to switch a bank (as bank B is not giving a good reprice rate)
Cancellation fee involved:
$130,000 * 0.75% = $975
$975 - $795.11 = ($179.89)
So in Fact, Are you actually SAVING?
Wait!!! Normally Uncompleted Project will complete within 3 years...
What's Bank A and B 3 years rates instead?
Bank A
Bank B
1) Interest paid: $11,330.34
2) Principal paid: $27,636.43
3) Principal at end of 3 years: $622,369.57
Bank B
1) Interest paid: $12,903.11
2) Principal paid: $27,009.91
3) Principal at end of 2 years: $622,990.09
Difference?
1) Interest : $11,330.34 - $12,903.11 = $1,572.77
2) Principal: $27,636,43 - $27,009.91 = $626.52
3) Prinicipal at end of 2 years: $622,369.57 - $622,990.09 = $620.52
Total Difference: $1,572.77 + $626.52 + $620.52 = $2819.81
Getting a Loan from Bank A will save you $2,819.81 after 3 years!!
So which Bank you prefer now?
This illustration is not to show you how much you can save, but to show you that the attractive figure might not be cost saving in the end.
"Play with the numbers and don't let the number play you out :)"
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
Clauses to Look out for when refinancing a newly TOP Property
There are a few clauses to look out for when refinancing a newly TOP Property.
1) Cancellation fee on the undisbursed amount
2) Legal Clawback ( Only Applicable for those who enjoy Legal Subsidy )
1) Cancellation Fee:
Do take note that after your project TOP , there is still 13% of your fund undisbursed until the "Expiry of the defects liability period ended. If you were to switch a bank right after the TOP , you are bound to a cancellation fee of either 0.75% or 1.5% depending on the contract you sign.
Ie:
Right after TOP
PP: $1mil
13% of $1mil is $130,000
Cancellation fee:
a) 0.75% of $130,000 = $975
b) 1.5% of $130,000 = $1,950
Banker always mention that they can give Free Conversion 3month upon TOP, but
1) Can anyone predict what will be the rate like in 2-3 years time?
2) Will the current bank be providing you a competitive rate?
3) Do you know ,if you missed the conversion 3month upon TOP, you will have to pay a fee for the conversion?
2) Legal Clawback:
Based on the older scheme , bank actually subsidize legal fee. If you were to enjoy the legal subsidy and refinance within 3 years , most bank will want you to pay back the Legal subsidy.
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
1) Cancellation fee on the undisbursed amount
2) Legal Clawback ( Only Applicable for those who enjoy Legal Subsidy )
1) Cancellation Fee:
Do take note that after your project TOP , there is still 13% of your fund undisbursed until the "Expiry of the defects liability period ended. If you were to switch a bank right after the TOP , you are bound to a cancellation fee of either 0.75% or 1.5% depending on the contract you sign.
Ie:
Right after TOP
PP: $1mil
13% of $1mil is $130,000
Cancellation fee:
a) 0.75% of $130,000 = $975
b) 1.5% of $130,000 = $1,950
Banker always mention that they can give Free Conversion 3month upon TOP, but
1) Can anyone predict what will be the rate like in 2-3 years time?
2) Will the current bank be providing you a competitive rate?
3) Do you know ,if you missed the conversion 3month upon TOP, you will have to pay a fee for the conversion?
2) Legal Clawback:
Based on the older scheme , bank actually subsidize legal fee. If you were to enjoy the legal subsidy and refinance within 3 years , most bank will want you to pay back the Legal subsidy.
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
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