I have client who is planning to buy or refinance often confused with the various package offered by the bank.
Each Bank have their own specialty package just like each restaurant having their own "Signature dish". If you are planning to eat crab but the restaurant offer you crayfish , think twice before you commit to them coz it might not suit you...
Typically the packages are as follows:
1) SIBOR
2) SOR
3) Combo
4) Variable Rates
5) Fixed
SIBOR (Singapore InterBank Offered Rate)
Sibor is a daily reference rate based on the interest rates at which bank offer to lend unsecured funds to each other in the Singapore wholesale money market.
Sibor come in terms of 1/3/6/12 months. Terms which Bank often offer are 1/3 month Sibor.
Highest 3M SIBOR was 7.75% which happened in Jan 1998
Lowest 3M SIBOR was 0.25% which happened in Sept 2001
Bank offering SIBOR:
BOC, CIMB, CITIBANK, DBS , HSBC, MAYBANK, OCBC, SCB, UOB,
SIBOR is transparent and can be view daily via Business Time , Housing Matters and other web sources.
SOR (Swap Offer Rate)
SOR is the cost of borrowing SGD synthetically by borrowing USD for the same tenor and swapping out the USD in return of the SGD and normally implied from the USD/SGD forward prices.
SOR come in terms of 1/3/6/12 months. Term which Bank often offer is 3 month SOR
Bank Offering SOR:
ANZ, BOC
SOR is transparent and can be view daily via Business Time , Housing Matters and other web sources.
COMBO
Combo is the average of both 3 month Singapore Interbank Offered Rate (SIBOR) and Swap Offer Rate (SOR)
Bank offering Combo:
ANZ
Variable Rates:
Variable Rates are pegged to the Bank Internal Board Rate. It means that Bank can review the rates as and when they need to. This causes certain level of uncertainty to what borrower have to pay in the future. The Home Loan interest rate will be adjusted accordingly.
Ie
1st year: ABCMR - 4%
2nd year: ABCMR - 3.5%
3rd year: ABCMR - 2.5%
Current ABC_Mortgage Rate (ABCMR) is 5.00%
You will be paying:
1st year : 1% (floating)
2nd year: 1.5% (floating)
3rd year: 2.5%(floating)
When ABC bank changes their ABC_Mortgage Rate (ABCMR) to 6 %,
You will be paying:
1st year : 2% (floating)
2nd year: 2.5% (floating)
3rd year: 3.5%(floating)
Bankers may often say that their Board Rate have not been changing for the past years but do bear in mind that Variable rates are not Transparent and is subjected to review as and when the Bank needs to.
Bank offering Variable Rates:
CIMB, MAYBANK, OCBC, RHB, UOB
Fixed:
Bank will normally offer client fixed package from 1 year to 5 years. Fixed rates is normally higher than the rest of the package (SIBOR, SOR, Variable, Combo) .Typically the longer the fixed period the higher the interest rate as the bank will have to bear the risk of interest rate going up.
Fixed package are normally meant for Completed Property.
Bank offering Fixed rate:
BOC, CITIBANK, DBS , MAYBANK, OCBC, RHB, SCB, UOB,
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
May 30, 2013
Apr 4, 2013
Comparing Uncompleted Property Rates
Different bank have different ways to attract customer to take up their loan. In terms of the rates below, most of the client will think that Bank B offers a better package, but in actual fact Bank A is offering a better package for an uncompleted project.
Bank A Bank B
1st year: 3mth Sibor + 0.90% 1st year: 3mth Sibor + 0.85%
2nd year: 3mth Sibor + 0.90% 2nd year: 3mth Sibor + 0.85%
3rd year: 3mth Sibor + 0.90% 3rd year: 3mth Sibor + 0.85%
4th year: 3mth Sibor + 1.00% Thereafter: 3mth Sibor + 1.25%
Thereafter: 3mth Sibor + 1.25%
Bank A Bank B
Total Interest
Paid : $21,446.61 $22,740.18
Principle at End
of 4th year : $750,797.49 $751,787.79
Total Interest Saving: $21,446.61 - $22,740.18 = $1,293.57
Total Principle Saving: $750,797.49 - $751,787.79 = $990.30
Total Saving : $1,293.57 + $990.30 = $2,283.87
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 :)"
*Do take note that for uncompleted project, full fund will only be disbursed 1 year after TOP, any refinancing or full payment done on TOP will be subjected to a cancellation fee.
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
Mar 11, 2013
Feb 8, 2013
CPF Usage for HDB Property
Today, one of my friend ask me how much CPF can they utilized if their client's HDB is only left with 59 years. Found this information which you might need it the next time :)
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
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
Jan 30, 2013
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??
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
Jan 27, 2013
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
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
Jan 18, 2013
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
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
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