Archive for financing
Tips for Emigrants Going For a Housing Loan
Posted by: | CommentsIn Singapore, housing loan packages have two categories: fixed rates or floating (variable) rates.
Singapore fixed rate packages are usually tendered for up to 3 years, but there are some lenders that cover up to 5 years fixed rates or even 10 years. This is unlike from some Western countries where rates can be fixed throughout the loan tenure.
On the other hand, floating rates are classified into published rates or board rates. Like Singapore Interbank Offered Rate (SIBOR) or Singapore Swap Offer Rate (SOR), published rates are normally rates that are released daily. Meanwhile, board rates are determined by the respective bank or financial institution. Many of the lenders posted their board rates to a certain financial benchmarks, yet the right factors are sometimes not clear and variations in board rates become uncertain.
In general, there are no restrictions on emigrants having housing loans in Singapore but do pay attention of the following.
Loan to Value
The maximum loan to value (LTV) in Singapore is 90% of the purchase price or rating, whichever is lower. Housing loan packages for 90% funding are limited as some lenders do not extend maximum LTV to emigrants. Loan approval for 90% funding is also tighter than for LTV 80% and below.
Income Proof
To have approval for a housing loan your latest income tax assessment or a letter of appointment from your local employer is essential. Tax assessments from some countries may not be honoured by the local mortgage loaners.
Landed Property
The commendation from Singapore Land Authority is mandatory before emigrants can purchase restricted properties such as vacant estate or landed properties such as bungalows, semi-detached, and terrace houses.
In-principle Approval
You may also regard an in-principle approval before purchasing. Consider of hiring a honored and professional housing loan consultant. This may help you save time and money with your loan approval.
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The Basics Of Home Equity Lines Of Credit
Posted by: | CommentsWhen people are looking for a line of credit, one option they will come across is a home equity line of credit. Before you select this type of financing plan, it is important to understand what it is and how the plan works so that you can determine if a home equity line of credit is right for you.
A home equity line of credit is a type of revolving credit where the collateral for the loan is your home. With this type of financing plan, a lender will approve an applicant for a set amount of credit. The amount is based on taking a certain percentage of the appraised value of the home and deducting that amount from the balance owed on the current mortgage. Home equity credit lines are often used for big expenses such as home renovation, medical expenses, education bills, etc. But remember, the mortgage rate will affect how you pay back this debt.
Most home equity lines of credit plans will involve setting a specific time period where one can borrow the money, such as 5 or 10 years. This is referred to as the \’draw\’ period. When the term ends, one can be given the choice to renew the line of credit. Plans can vary such as one plan may permit repayment over a set or fixed period and other plans may require full repayment at the end of the period. Once approved, one is usually able to withdraw the funds up to the set limit whenever they need it. One can withdraw either in person or using a credit card. As well, there may be certain conditions attached such as requiring a minimum amount to be withdrawn each time.
When looking for a credit line plan that you can afford, make sure you understand what interest rate comes with the plan and the extra fees and charges. For instance, there is usually a fee for a home appraisal, an application fee, and there are closing costs. Closing costs will include such fees as taxes, title search, attorney fees, preparing the credit line, filing the documents, and title and property insurance.
It is important to remember that a variable interest rate is a rate that will increase or decrease depending on market conditions and a fixed rate is the set interest rate for the term of the credit line. For most cases, home equity lines of credit involve a variable rate. Some lenders may offer a temporary discounted interest rate for their home equity line plans as a promotional tool. However, this is usually for a short period. As well, some variable rate plans offer limits to how much your payment can increase or decrease. Rates and other costs will vary among lenders so it is important to comparison shop.
Because one\’s home is used as collateral, the lender\’s risk is lower; therefore rates tend to be lower. This is advantageous for many because the amount one saves can be hundreds of dollars. If you are interested in acquiring a loan, a home equity line of credit is one option you may want to consider. The most important thing to remember with this type of financing is if you do not repay the amount you borrow, including the interest, you could lose your home.
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Take Control of Your Household Finances
Posted by: | CommentsRegular assessment of your household finances is important to the family\’s financial well-being. Here are some guidelines to control your household finances.
Credit Card Use
Use your credit if you have one. However, remember to pay your outstanding balance, not the minimum amount, before its due. Utilisation of credit card should be done wisely.
Rule of Thumb
Household expenses should be lower than 33% of household income. If it is higher, think of cutting down your expenses. Here are some tips to lower your expenses.
1. Always clean your air-conditioners.
2. Wash your laundry on full load.
3. Put thimbles on your taps
Allocate Book Keeping Reponsibilities to Your Kids
If you have kids, share them a simple task in book keeping, like data-entry. This will make them understand basic financial principles. Moreover, it will also give them a sense of responsibility and promotes good financial practice.
Keep a File of Your Financial Statements
Take note of your finances. Have a notebook or a ledger. If you have a computer, put everything into a spreadsheet. You don\’t even have to pay up cash for a spreadsheet.
Here are some tips in organizing your financial statements.
1. To save time from entering data, get soft copies of bills and statements, if possible.
2. Back-up all your files, save them into CD-R or thumb drive. Then keep them in a safe place.
Financial Planning
If you have a little source of income, and there is only one person working in your family, think of getting an insurance plan for the breadwinner. Financial worries are not something your family should cope with in the event the sole breadwinner is incapacitated.
Make It a Routine
When you are not doing your task, it piles up. Set aside 30-60 minutes each week to maintain your finances.
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Reinvest Your Home
Posted by: | CommentsMost 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
When your current interest rate is higher than available housing loan packages on the market, it is time for you to consider reinvesting. Ask your bank or financial institution to reprice your loan package. Most likely, your lender will give you an offer, which is better than your current one. Try to compare this offer to the other packages and then decide if you should switch or not.
Lock-in and Clawback Periods
When you get a housing loan, there may be a lock-in period wherein your mortgage lender will charge you a penalty fee, maybe a percentage of your outstanding loan amount, if you were to fully repay your loan. Most of housing loans have a clawback period wherein the lender will claim back \”giveaways\”, such as legal subsidies, that they \”gave\” you when you take up your housing loan. Lock-in period is different from clawback period. Because of this, reinvesting is not recommended.
Loan Quantum
The higher the amount of your loan, the greater your savings for the same decrease in interest rates will be. Yet fixed cost to reinvesting does not vary much with quantum loan. 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 considerable portion of your interest rate savings.
Identify Interest Rate Movements
Analyze how interest rates flow. Try a floating rate package as an alternative to fixed rate package if the interest rates are decreasing. 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
Try to get a fixed rate package. Think of increasing your loan quantum. On the other hand, if your monthly income has increased and you want to lower interest payments, think of reducing your loan tenure.
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