Invest in Singapore property: Mortgage Insurance for Property Buyers

Invest in Singapore property: Mortgage Insurance for Property Buyers

By www.PropertyBUYER.com.sg Singapore Mortgage Consultants
In the US or elsewhere , Insurance sector is over-saturated, insurance companies are getting too innovative in creating products. Some are borderline betting houses in our opinion and they undertake too much risks, such as buying insurance to insure against the person having the cash flow to continue to service the home loan.

There are other mortgages that can even insure against the price of the property staying above a certain valuation. Taking easy money but naked exposed risks such as such "Book-making" deals are what made some BIG insurance giants to fall. What has the world come to? (This is part of the reason how the world got into the financial crisis).

Hopefully Singapore's Assurance sector will not go astray . Some Singapore banks may give you some preferential Singapore SIBOR-SOR-fixed bank loan rates , but try to cross sell their partner's insurance package on you.

Home loan Reducing Term Insurance

Mortgage insurance is designed to ease partially the pain of a partner who has lost a loved one and still ended up taking over the liabilities of the home loan repayment.

For example , if the loan is $1,000,000 in which each person shares half the repayment burden. In this case, each person buys $500,000 of insurance. So that when a partner dies, the other partner gets $500,000 towards payment of the house. There is also what is called Mortgage insurance .

When the loan is being repaid , the principle becomes smaller , hence the insured amount is reduced and hence also the premiums.

This assures the Singapore bank that the home loan can be serviced and serves to defray default risks of singapore home loans borrowers as this insured amount may be tied to this liability .

If you are well insured and you have various policies against your death, such policy is an over-kill. Essentially whatever they call it, it's just a name. What is important is that you are able to pay or your partner is able to pay in the case of one's death .

Why must Banks sometimes force you to insure with their partner insurance company ?

Banks are increasingly doing cross sell , so this helps to increase their profits targets.

Sometimes, such bundling may or may not be the best option for the Singapore property Buyer or the Singapore home owners refinancing their properties. Please SMS (text) your property buyer Mortgage broker at Singapore GMT+8 +65 - 9782 8606, they will be able to assess the pros and cons of each home loan package choice.

Housing Insurance : home content Insurance

Home content insurance pays you if your contents are lost, stolen or destroyed. There may be various insurance riders which covers many different conditions leading to the loss or damage.

Housing Insurance : Property Insurance

Just to digress , you can guess fairly correctly how much your house costs to build. As this is the amount that the actuary department reckon it costs to re-build in the case the building is destroyed.

For example your condominium is $1,000,000. If the evaluated construction cost is $400,000, this means that $600,000 is attributed to land and $400,000 is the building cost .

Developers won't tell you how much it cost to build a condominium, therefore you can look for your Fire and building insurance to find out how much your unit is insured for to know how much is the replacement cost . (We use this method at PropertyBUYER.com.sg as a proxy for estimating building cost)

Singapore banks can then use this money to pool it into the sinking funds for the condominium to be reconstructed , into a complete and building ready for occupation .

At www.PropertyBuyer.com.sg our Singapore Home loans and mortgage consultants (www.propertybuyer.com.sg/contactus.php) can help you through your property buying process .