Should I Refinance My HDB Homeloan to a Commercial Bank?

Photo credit: choyaw99

The other day, another HDB home owner came to us checking on refinancing. They have been influenced by cheap rates that some people emphasize. We feel we have to explain the RISKS here.

1) All commercial banks require CPF to relinquish first charge when you switch your loan over to them.
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Singapore Developers Gearing For Price Slash?

If you’re starting a new family or already are looking at buying a new place, this is almost the best time to do so. Forget about the high prices that you’ve seen and remembered in 2007, 2009 would be one of the better years in a 7 – 10 years recession period retraction time to get a good bargain.

It really all boils down to whether developers have the holding power to wait out and launch at the right time. According to Business Times, this year we would see whether how Deferred Payment Scheme (DPS) will be affecting buyers who hasn’t take up loans from the banks. A year ago, you could take up loan of up to 90% of the property value easily. If you haven’t secure a loan then, you would have difficulty sometimes even getting loan of up to 80%. Now assuming you have secured an 80%, your cash layout would have increased additionally to 10% to make up the difference of what you could have last year.

Weekend Today actually sent a team to developer project launches and tried to ‘purchase’ a number of units to see how much discounts they could get from the developer.

BARELY an hour into the showflat tour, the senior executive of a property consultancy firm, brokering a private condominium, decided it was time to reveal his trump card.

“Don’t say I said it,” he said, almost whispering, as he pushed across the table to us a piece of paper with a blow-by-blow breakdown of his offer. The latest scribbled figure was 15 per cent just beside the previous offer of 11 per cent.

Buyers could also be offerred freebies such as waiver of stamp duty fees and substantial furniture vouchers to even sweeten the deal.

Buyers with Cash

Ah, you’re in luck. With the falling lending rates especially with loan packages that’s packed with Singapore InterBank Offered Rate (SIBOR), you’d be saving quite substantially in the long run of 20 – 30 years of borrowing.

A UBS report says that according to URA data, four recent sub-sales have been transacted at 20 per cent below launch prices.

Two units at Ardmore II were sub-sold for $2,000 per sq ft, compared with the last-transacted price of $2,400 psf. One unit at Scotts Square was sold at $3,050 psf, compared with the last-transacted price of $3,850 psf in the second quarter of last year.

And one unit at Sky @ Eleven was sold at $880 psf, compared with the last transacted price of $1,270 psf in Q2 2007.

Business Times, 9th January 2009

Buying opportunities now are reigning especially in the Core Central Region (CCR). If you’re thinking of upgrading and shifting to a better location, this slump would be a very good time. Some older projects you can look out for in D09 would be Aspen Heights, Valley Park, Mutiara View or Mutiara Crest which is residing around River Valley for a good buy.

Flip through property listings today and start hunting ;)

Plunging Key Interest Rates, A Good Time to Borrow?

Just read a mailer from Tony, Knight Frank on an article in Business Times talking about lower bank interest rates here at home since key interest rates from the States will be cutting tremendously within the next 12 months , meaning adjustments to our SIBOR (Singapore InterBank Offered Rate). It only means two huge things for people who keep their money in the bank and for people who borrows money to do investments or businesses here at home in Singapore.

The Masters of Interest Rates
The faces of your key interest rates decision makers lol.
Photo Credit: fintag

For People Who Keeps Their Money In the Bank

Chances are you’ll lose out if you keep your money in a savings account during this season if your main purpose is to earn interest for the next few months. Unless the bank is giving you a fixed rate (usually, and very low), you would be suffering from lower interest earning power.

For People who Loans Invests in Property and Businesses

Congratulations, it means lower cost for you! I’d reckon the adjustment movements on Sibor and the rates on your banks won’t be taking effect so soon, but it’s a good borrowing time if you are buying properties like houses, shophouses or office even as an investment.

The sentiments for US eating into a recession is very strong, but it shouldn’t impact our economy much. Asian countries has came a long way from the 97-98 Asian Crisis and have definitely diversified their nests all around instead of concentrating all its eggs on the US economy. I’ve read even about neighbour Malaysia’s Central Bank, Bank Negara breaking borders on its monetary reserves (at 101.3 Billion US Dollars) being able to survive for even in face of another crisis should one arise.

Much shouldn’t be said for our own Singapore Government being prudent on our reserves and investment overseas. We’re generally sound.