Home loans for Indonesians up to 75% without proof of income in Singapore

Who should read about asset based lending?

For Indian citizens earning above 8k a month in SGD equivalent in their home country buying a property in Singapore or refinancing a property for Maximum Singapore dollar CASH, so that you can invest in better yield.

It is also extremely powerful for: -

Singaporeans earning a joint income above 8k a month and buying a second property, but who already has several financial commitment, this scheme is able to gracefully over-look the other commitments.

For Singaporeans buying their 1st property, and able to put down a 25% downpayment. The loan quantum available to them can be substantial, allowing them to leverage highly.

Singapore Banks Asset Based Lending Criteria

What about the criteria for Asset Based Lending Mortgage?

Most banks in Singapore lend based on criteria such as debt to servicing ratio. The usual debt servicing ratio is capped at 50% to 60%.

This 50% to 60% debt servicing ratio is what the bank would lend at the maximum, not a financial planning guideline.

Only some banks in Singapore will do asset based lending for your property with minimum income.

Asset based lending is rare. Banks see it as risky. Most often, banks need you to put assets under management (AUM) of $250,000 or 24 months of repayment amount (whichever is higher), plus income level.

Typical Singapore Asset Based Lending

Someone with a fully paid up property valued at $3.2m. He goes to the bank to borrow 50% of $3.2m. He gets $1.6m in cash for an equity term loan (Cash out). The bank will usually want to see proof of liquid assets of 24 months of the installment amount.

illustration of a scenario: -

Age of owner = 50 years old

Property valuation = $3,200,000

Loan to value = 50%

Loan tenor = 20 years

Interest rate = 1.5%

Loan amount = $1,600,000

Monthly Installment = $7,720

In this scenario, the owner would most likely be asked to show proof of 24 months of monthly repayment in liquid assets of $185,280.

A Better asset based lending loan structure in Singapore

This type of Asset Based Lending goes up to 70% or 75% of the loan-to-valuation.

This type of asset based lending with high Loan quantum is good for Singaporeans buying 2^nd or 3^rd properties. This structure is also good for Foreigners refinancing their paid up property for CASH OUT.

Scenario: Indonesian, 50 years old, paid up property, earns $25,000 SGD worth of income, but in his own country.

Property Valued at = $6,000,000

Status = Fully Paid up

Loan-to-value of = Can to up to 70% (up to 75% subject to approval)

Loan tenor = up to 25 years

Loan amount = $4,200,000

He will be eligible to borrow up to $4,216,000 based on his asset and some proof of income instead of $2,529,000.

Most rich people have a lot of money, but they like to borrow money, because using other people’s money is a way to grow rich. His borrowing quantum goes from $2.529m to $4.216m. Cash is freed up at cheap cost (housing loan borrowings are the cheapest form of borrowing) to invest in higher yielding assets.

Here are the facts of this loan

Age = up to 75 years old

Tenor = up to 40 years

Min Income of $8,000 joint income

Documents required for Asset based lending

NRIC = front and back copy. (For foreigners who are NON-PR, copy of passport)

Income = Proof of income via Company letter only (or alternative proof)

As long as income certified by Financial officer or Human Resource, it is recognized

OR

3 Months salary slip

OR

2 years of Notice of Assessment (NOA) – from IRAS.

Existing home loan balance (if any)

= 6 months to 12 months bank statement showing outstanding loan amount. (if fully paid, copy of title deed)

Option to purchase = Required for a New purchase of a completed property. (Not needed if

refinancing)

Contact : loans@propertybuyer.com.sg

Mobile (sms) : +65 9782 8606

Get Asset Based Lending home loan

Get Asset Based Lending Refinance Home Loan

If you are a Singapore Mortgage Broker, do contact us, we will avail this to you and your clients. (Only for Mortgage Broker and Consultants)

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WILL MONEY VELOCITY FURTHER SLOW DOWN DUE TO PROPERTY REGULATION IN SINGAPORE

WILL MONEY VELOCITY FURTHER SLOW DOWN DUE TO PROPERTY REGULATION IN SINGAPORE

Let’s just say the risk is not about whether it will Cool inflation, but rather whether it will totally put out the fire and Freeze the property market in Singapore.

Inflation is influenced by the following equation.
{MV = PQ} = (by Irving Fisher, 1911)

Where

• M is the total dollars in a Nation’s money supply (generally the M3 or M2)
• V is the number of times per year each dollar is spent (Velocity of money)
• P is the avg. price of all the goods and services sold during the year.
• Q is the quantity of Assets, goods and services sold during the year.

When M2 or M3 increase, where V and Quantity stays the same, then P increase. The rate of P’s increase is inflation.

Right now, we are seeing M2 or M3 increasing faster than GDP in many nations, while prices are fairly stable at ~5.4% (in 2011) in Singapore and production (Quantity) is rather stable, this means that V, the velocity of money has yet to pick up. In other words, people are not yet spending.

Once Velocity of money V picks up, in order to control price rise, Quantity will have to pick up dramatically as well. Not all quantity can be ramped up quickly enough.

[M2 or M3 increase] x [V] = [P] x [Q]

So by taking out Foreign M2, M3 as well as M2 in Singapore attributed to foreign ownership by imposing a 10% Additional buyer stamp duty, Singapore has effectively reduced the M2, M3 money supply from the property market.

In short, this policy may somewhat reduce inflation attributed from Housing. However it may not stop these money from being channeled to other parts of the economy, especially commercial properties.

USA M2 Money Supply


(Source: Wikipedia)


European M2 Money Supply



Australian M2 Money Supply



Singapore’s M2 Money Supply

S$ MILLION
END OF PERIOD M2
2010
Nov 401,429.3
Dec 403,078.2
2011
Jan 406,246.8
Feb 406,280.0
Mar 413,255.5
Apr 422,475.6
May 422,716.1
Jun 423,516.7
Jul 431,311.5
Aug 431,253.4
Sep 434,818.4
Oct 439,817.4
Nov P 442,144.4

AS you can see, M2 from Dec 2010 up till Nov 2011, has grown by 10%, this exceeds the GPD growth figures.

As there are ample funds in Singapore, interest rates can stay low, due to low velocity of money, once there is signs of up-trend, then we expect markets to rally very quickly and these money will be drawn down. And cost of funds will consequently go up.

Call Property Buyer Mortgage Consultants at 9782-8606 or email
loans@propertybuyer.com.sg to assess your Home Loan Financing Needs.