HDB home owners - Agents partner with Rogue Lawyers to jack up rates
April 2011
Amidst many complaints against property agents, the Singapore government has set up the Council of Estate agencies to regulate the property agency business as well as to issue each property agent with a license number, and measures such as NO dual representation do not go far enough.
If you have discovered that you have paid more than a certain rate for your legal conveyancing, you should raise a suspicion and make a NOTE (though not necessarily a complaint) to Council of Estate Agencies (CEA).
There is also a rule in which agents cannot refer home owners to money lenders. Shouldn’t CEA ban agents from striking deals with bankers and lawyers and pocketing illegal kick backs?
Agents are still happily making referrals to lawyers and banks. This is a serious problem and we should highlight here so that in case you are a victim, you could raise this issue with Council of Estate Agencies.
Agents like to strike deals with lawyers to give them kick back. So where is the extra fees coming from? The lawyer (those bad ones) will go about charging the home buyer more in order to pay out the commission. Not only that, agents also work with companies that have pre-arranged ELEVATED legal fees with some law firms. This extra cost is passed on the home buyer. These illegal companies then pass on this extra commission gained as a result of illegal legal fee kick back to the agents. This is illegal under current law as lawyers cannot give out commission from their law fee.
Property agents also push you towards unattractive home loan rates just so as to benefit from the legal fees kick back.
It is always useful to note down the time, date of communication with the property agent. And try to communicate more with Emails and get them to confirm their facts via email. Do not rely too much on verbal conversation.
Attached here is a property agent complaint form which we downloaded from the CEA website. (Please note, you should always check the CEA website to ensure that the form is up to date, we only provide a convenience and are not liable to any losses whatsoever from using the form)A property agent complaint form is available at property buyer. You can contact them at loans (at) propertybuyer.com.sg
CEA Property Agent Complaint Form is available upon request.
Reasonable conveyancing rates guide
For HDB buyers - Buying a HDB in the resale market
$500 mortgage stamp fee is around $1900 to $2300. In fact, $2300 is already at the higher range, you should already start to open your eyes and raise a complaint or lodge a check with CEA if it is at above $2000.
Conveyancing rates for HDB home loan refinance
The estimated legal fees inclusive of Mortgage stamp fee is from $1900 to $2300.
For Private Property Loan- Buying a New Condo under construction
Total (Inclusive of Mortgage Stamp fee) is $2500 (for near to TOP) to $3500 (for those many years later)
Some law firms claim that it will cost them more resources to keep things on file and track condos which are still under construction. And indeed if the completion is far away, the law firm’s responsibility is dragged out longer. If they did not execute according to the letter of instructions from banks, they may become black listed by the banks and be kicked out of the bank’s panel. The cost is also more.
Legal conveyancing for buying Private residential – completed condominium
Total (Include of mortgage stamp fee) is $2500 to $3210.
The price varies a bit, depending on the law firm and the banks. Some banks are deemed more troublesome at the back end, therefore some law firms charge more. But there is a limit to it, so the above prices can be used as a guide.
Conveyance fees for Private Residential Refinance
The legal conveyance fees (including mortgage stamp fee) ranges from $2500 to $2800.
Why do legal conveyance rates differ?
Basically it is up to the law firms when to charge you higher. Perhaps sometimes, we feel it depends on their mood, other times, it depends on whether they are in cahoots with the Dishonest property agents.
Law firms can charge you extra under these situations: -
Last minute appointments such as 1 day before the exercising of option date, law firms may charge more.
Exercise dates falling into public holidays (maybe)
Faster that the normal legal completion date.
Liaising with CPF on expediting payment.
Multiple parties involved in the property.
Involving bridging loans or construction loan.
In illegal partnership with property agents.
Not corrupt, but legal conveyancing is not their core business and hence they charge a higher price.
Some property, usually those above 3m may face higher legal conveyancing fees, due to more potential complexity. (But not always the case)
Involving probate cases and estate issues.
What can you do if you get charged higher fees than normal?
If you have discovered that you get charged a higher fee than what we have described, it is possible that you have been cheated by the property agents, if you have not been cheated by the agents (in that they did not receive a commission), it is possible that you have over-paid.
Although the law society fee recommendation stipulates a higher fee, the free market has stabilized on the above fees which we have highlighted and hardly anyone uses the recommended fee.
In case you have paid higher than the highest range there, you can take down your property agent's license number and raise a complaint in case the bank and/or the law firm was referred to you by the property agent.
CEA Property Agent Complaint Form
These guideline fees are what we understand to be correct market rates as at April 2011
In case you do not know if you are cheated, you can tell us your story, we will be able to guesstimate whether you have been cheated.
write to loans at propertybuyer.com.sg perhaps we can go through your case to let us know if you have been cheated.
SMS Property Buyer mortgage consultants at: +65 9782 8606
Showing posts with label Sibor home loan rates. Show all posts
Showing posts with label Sibor home loan rates. Show all posts
Tuesday, April 5, 2011
Tuesday, June 8, 2010
Invest in Singapore Property: Will Low singapore SOR rates inflate property prices?
Invest in Singapore Property: Will Low singapore SOR rates inflate property prices?
Quotes -->
“Analysts say the Sibor drop may complicate recent government efforts to rein in rising asset prices, in particular a surging real estate market.” (David Roman and Gaurav Raghuvanshi, Dow Jones Newswires, online.wsj.com/article/BT-CO-20100519-718371.html
,19th May 2010)
"Property is the most interest-rate sensitive sector of the economy," said David Carbon, an economist with DBS. "The economy is growing very fast, rates are very low: You can draw your own conclusions." (David Roman and Gaurav Raghuvanshi, Dow Jones Newswires, online.wsj.com/article/BT-CO-20100519-718371.html
Some financial news reports or articles have been saying that Sibor at an all time low is making the situation more complex as low interest rates cause asset bubbles especially in the property market.
Though the statement looks correct universally and is more or less so, but if you bother to drill down, a lot of so called Universal truth is not so Universal afterall.
How much movement in interest rates before something happens? Is property most sensitive to interest rates? (Maybe but maybe not)
The general hypothesis is that when Interest rates are low, people can afford the properties, therefore bidding up the property prices . We are usually very careful about being a parrot and repeating statements such as these.
While in the extreme, that statement "Property is the most interest-rate sensitive sector of the economy" is usually true, but the degree of sensitivity of property to that is suspect.
Because if you look at 2007 to 2008, during the property boom, the run up in prices as well as interest rates are almost in tandem. It took quite a lot of interest rates hike (from about 2% home loans singapore rates to almost 5%) to slow down the property market. So there is a substantial lag effect.
And eventually it was the break-out of the global financial crisis that made people lose jobs and lose confidence that did the job or slowing the property market.
So how will Singapore condominium prices be affected by varying property loan singapore rates.
At Property Buyer Singapore Mortgage consultants, we like to research it and present the facts.
Tel: 6100 0608
Sms: 9782 8606
http://www.propertybuyer.com.sg/articles/about-us
Arguments FOR AND AGAINST " Low Interest rates complicate recent government efforts to rein in rising asset prices"
Our customers are buying for reasons that are NOT how much Singapore bank interest rates they have to pay.
Then they will check the repayment schedule, only then they will realize that they are over-stretching or not.
The cases that we have seen are very different.
It is often not just about the Home loans Singapore, it's more than that.
Property Buyers who are getting home loans in Singapore do so for the following reasons : -
Need a place to stay
Replacement for their renting
Property available in their locality
Property meeting their budget
Property meeting their lifestyle
Investment reasons – Income (very few)
Many people stated Capital appreciation as a reason
Interest rates are very low Not many people told us this was their main reason for considering property purchase.
We have a sample size of 50 clients over the past many months , population of 5 million people, 90% of people did not state interest rates being low as buying criteria (only 10% stated low mortgage interest rates as property buying criteria).
Based on a statistical tool at (://www.surveysystem.com/sscalc.htm) we have arrived at a figure of 90% +/- 8.32% using a 95% confidence level.
Property investors ARE NOT BUYING DUE TO LOW Property LOANS RATES!!! (We are 95% certain) - Based on our 30min rough estimation
People that bother to read our research material are typically skewed towards private properties, their range do vary a lot, from property purchase between $1m to $10m. And as these people are not related, we can therefore assume that they are fairly homogeneous and representative of Singapore’s Private property buyers.
We can say with a 95% confidence level that between 81.68% to 98.32% of people buying properties in Singapore , they are buying for reasons other than low interest rates. Between 3% and 1% bank interest rate, it makes little difference to their property buying intentions. Of course it would still make a difference to them if interest rates are between 10% and 1% (But historically unlikely as it has only happened once within this 20 years) . Of course there are between 1.68% to 18.32% @ 95% confidence level are buying due to low interest rate reasons.
So low interest rates is one of the many factors that cause property asset prices to rise, but only a small reason .
Low interest rates don't mean that banks can grant you loans, you must pass the bank affordability test
Singapore Banks practice a safety threshold for property mortgage loans interest rates. Therefore only those who have a healthy income (cash flow) minus off their liabilities meeting a certain debt servicing ratio (typically 50%) are granted a loan.
Singapore banks generally set a property loans interest threshold at between 3.5% to 5% at this point in time. Even if the prevailing interest rates are 1% or less on your home loans, you will be tested for your servicing ability at between 3.5% to 5% home loans rates. You must pass the bank's credit department test to get a loan . As there is some buffer between existing rates and the bank's threshold, there is some time lag .
Therefore singapore bank residential interest rate is INELASTIC to creating property demand when interest rates are low.
So if you cannot pass the affordability test, you cannot buy a property using bank's financing, so how will you add to the demand to force property prices to rise?
Singapore's SIbor interest rates have peaked at about 3.6% within the last ten years. And the banks usually Lag in increasing interest rate means threshold.
When banks set their threshold for interest rates, they look at historical interest rates. No matter how low the prevailing rates are, they will still keep it at a higher level just to make sure that you can afford to repay the loan.
Therefore dropping Sibor from 3.5% to 1% or thereabouts is INELASTIC to create any demand and hence will NOT push up Singapore property prices.
Therefore your affordability do NOT increase with lowering interest rates in Singapore. It's whether the bank will lend to you, or NOT (if you fail the cash flow criteria).
The interest rates from about 3.5% to 1% is inelastic to actual demand in Singapore's context aided by bank's interest threshold setting.
Third point - IF PROPERTY INTEREST RATES ARE HIGH AND YOU NEED A PLACE, WITHIN THE INELASTICITY RANGE OF INTEREST RATES YOU WILL STILL BUY (If you can afford it)
Say you need a place to stay, you will still buy a place even if interest rates increases. So interest rates increases beyond a certain (will cause the bank to raise their safety threshold interest rates even higher) and eventually cause people to shun away from buying a property.
But Low interest rates alone do not do the opposite. It may not cause people to want to buy a property. When the rates are low, it could be more of a need based demand.
As there is a safety threshold, however low the interest rates go, the bank's safety Sibor interest rate threshold typically do not fall further. (But it is the bank's decision).
novice property investors cannot simply believe in news reports and rumours
We are not Singapore economists, we are mindful and wary of generic motherhood statements . Because this is how most news work. They report something that is easy to read and digest.
Though the print media always try to get things right, because some of them are under a lot of time pressure to churn out sensational news on a daily basis, therefore it is also prone to dishing out generic motherhood statements that does nothing to help the investor.
So, Sibor must raise significantly (say several percentage points say 2 to 3% ) before it dampens property buying sentiment and ease the rising property prices. Singapore government got it wrong again leading to the treasury coffers swelling due to high prices for land sales. But nonetheless, we think policy levers are more effective than interest rates.
With this we conclude that low interest rates will not complicate housing demand or property asset bubble , but rather the shortage of housing due to poor timing and planning by the Singapore government is the cause of it.
Quotes -->
“Analysts say the Sibor drop may complicate recent government efforts to rein in rising asset prices, in particular a surging real estate market.” (David Roman and Gaurav Raghuvanshi, Dow Jones Newswires, online.wsj.com/article/BT-CO-20100519-718371.html
,19th May 2010)
"Property is the most interest-rate sensitive sector of the economy," said David Carbon, an economist with DBS. "The economy is growing very fast, rates are very low: You can draw your own conclusions." (David Roman and Gaurav Raghuvanshi, Dow Jones Newswires, online.wsj.com/article/BT-CO-20100519-718371.html
Some financial news reports or articles have been saying that Sibor at an all time low is making the situation more complex as low interest rates cause asset bubbles especially in the property market.
Though the statement looks correct universally and is more or less so, but if you bother to drill down, a lot of so called Universal truth is not so Universal afterall.
How much movement in interest rates before something happens? Is property most sensitive to interest rates? (Maybe but maybe not)
The general hypothesis is that when Interest rates are low, people can afford the properties, therefore bidding up the property prices . We are usually very careful about being a parrot and repeating statements such as these.
While in the extreme, that statement "Property is the most interest-rate sensitive sector of the economy" is usually true, but the degree of sensitivity of property to that is suspect.
Because if you look at 2007 to 2008, during the property boom, the run up in prices as well as interest rates are almost in tandem. It took quite a lot of interest rates hike (from about 2% home loans singapore rates to almost 5%) to slow down the property market. So there is a substantial lag effect.
And eventually it was the break-out of the global financial crisis that made people lose jobs and lose confidence that did the job or slowing the property market.
So how will Singapore condominium prices be affected by varying property loan singapore rates.
At Property Buyer Singapore Mortgage consultants, we like to research it and present the facts.
Tel: 6100 0608
Sms: 9782 8606
http://www.propertybuyer.com.sg/articles/about-us
Arguments FOR AND AGAINST " Low Interest rates complicate recent government efforts to rein in rising asset prices"
Our customers are buying for reasons that are NOT how much Singapore bank interest rates they have to pay.
Then they will check the repayment schedule, only then they will realize that they are over-stretching or not.
The cases that we have seen are very different.
It is often not just about the Home loans Singapore, it's more than that.
Property Buyers who are getting home loans in Singapore do so for the following reasons : -
Need a place to stay
Replacement for their renting
Property available in their locality
Property meeting their budget
Property meeting their lifestyle
Investment reasons – Income (very few)
Many people stated Capital appreciation as a reason
Interest rates are very low Not many people told us this was their main reason for considering property purchase.
We have a sample size of 50 clients over the past many months , population of 5 million people, 90% of people did not state interest rates being low as buying criteria (only 10% stated low mortgage interest rates as property buying criteria).
Based on a statistical tool at (://www.surveysystem.com/sscalc.htm) we have arrived at a figure of 90% +/- 8.32% using a 95% confidence level.
Property investors ARE NOT BUYING DUE TO LOW Property LOANS RATES!!! (We are 95% certain) - Based on our 30min rough estimation
People that bother to read our research material are typically skewed towards private properties, their range do vary a lot, from property purchase between $1m to $10m. And as these people are not related, we can therefore assume that they are fairly homogeneous and representative of Singapore’s Private property buyers.
We can say with a 95% confidence level that between 81.68% to 98.32% of people buying properties in Singapore , they are buying for reasons other than low interest rates. Between 3% and 1% bank interest rate, it makes little difference to their property buying intentions. Of course it would still make a difference to them if interest rates are between 10% and 1% (But historically unlikely as it has only happened once within this 20 years) . Of course there are between 1.68% to 18.32% @ 95% confidence level are buying due to low interest rate reasons.
So low interest rates is one of the many factors that cause property asset prices to rise, but only a small reason .
Low interest rates don't mean that banks can grant you loans, you must pass the bank affordability test
Singapore Banks practice a safety threshold for property mortgage loans interest rates. Therefore only those who have a healthy income (cash flow) minus off their liabilities meeting a certain debt servicing ratio (typically 50%) are granted a loan.
Singapore banks generally set a property loans interest threshold at between 3.5% to 5% at this point in time. Even if the prevailing interest rates are 1% or less on your home loans, you will be tested for your servicing ability at between 3.5% to 5% home loans rates. You must pass the bank's credit department test to get a loan . As there is some buffer between existing rates and the bank's threshold, there is some time lag .
Therefore singapore bank residential interest rate is INELASTIC to creating property demand when interest rates are low.
So if you cannot pass the affordability test, you cannot buy a property using bank's financing, so how will you add to the demand to force property prices to rise?
Singapore's SIbor interest rates have peaked at about 3.6% within the last ten years. And the banks usually Lag in increasing interest rate means threshold.
When banks set their threshold for interest rates, they look at historical interest rates. No matter how low the prevailing rates are, they will still keep it at a higher level just to make sure that you can afford to repay the loan.
Therefore dropping Sibor from 3.5% to 1% or thereabouts is INELASTIC to create any demand and hence will NOT push up Singapore property prices.
Therefore your affordability do NOT increase with lowering interest rates in Singapore. It's whether the bank will lend to you, or NOT (if you fail the cash flow criteria).
The interest rates from about 3.5% to 1% is inelastic to actual demand in Singapore's context aided by bank's interest threshold setting.
Third point - IF PROPERTY INTEREST RATES ARE HIGH AND YOU NEED A PLACE, WITHIN THE INELASTICITY RANGE OF INTEREST RATES YOU WILL STILL BUY (If you can afford it)
Say you need a place to stay, you will still buy a place even if interest rates increases. So interest rates increases beyond a certain (will cause the bank to raise their safety threshold interest rates even higher) and eventually cause people to shun away from buying a property.
But Low interest rates alone do not do the opposite. It may not cause people to want to buy a property. When the rates are low, it could be more of a need based demand.
As there is a safety threshold, however low the interest rates go, the bank's safety Sibor interest rate threshold typically do not fall further. (But it is the bank's decision).
novice property investors cannot simply believe in news reports and rumours
We are not Singapore economists, we are mindful and wary of generic motherhood statements . Because this is how most news work. They report something that is easy to read and digest.
Though the print media always try to get things right, because some of them are under a lot of time pressure to churn out sensational news on a daily basis, therefore it is also prone to dishing out generic motherhood statements that does nothing to help the investor.
So, Sibor must raise significantly (say several percentage points say 2 to 3% ) before it dampens property buying sentiment and ease the rising property prices. Singapore government got it wrong again leading to the treasury coffers swelling due to high prices for land sales. But nonetheless, we think policy levers are more effective than interest rates.
With this we conclude that low interest rates will not complicate housing demand or property asset bubble , but rather the shortage of housing due to poor timing and planning by the Singapore government is the cause of it.
Friday, July 3, 2009
Singapore SIBOR Home loan mortgage
Courtesy of www.PropertyBUYER.com.sg
Singapore Interbank Borrowing Rate is commonly referred to as SIBOR.
Sibor is traded amongst banks at the Association of
Banks Singapore (ABS)
Contact us
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php
The Singapore economy is still hurting, however the absolute worst may be over.
Given that the economy has stabilized, the Sibor and SOR tends to stay low
in a weak economy.
Reduced Risk of Major melt down.
So in short, the major risks of credit crisis or financial meltdown is much
reduced. Sibor and SOR should not hike due to panic.
Risk of Inflation
Each medicine comes at a price. The price is a hang-over or side-effects lasting
several years.
Obama's massive fiscal stimulus and that of many countries are going to hit
the fan soon.
Is the USA printing money
You cannot create something out of nothing. What the USA did by pumping
the economy is similar to creating 1+ Trillion dollars out of thin air.
The only reason why it is not a PURE "PRINTING money" exercise is
because the "Printing" is financed through debt.
The extra + 1 Trillion is created, but debt is created to finance it, so there is
minus - 1 Trillion. So +1 trillion - 1 trillion in debt = 0 (not printing).
But when you add 1 trillion to a 14 trillion dollars economy, that is something
like 7% of US GDP. Surely after some of the deflationary pressures are
sorted out, if the US do not pull this money out, a serious inflation may
appear.
So far, the US government have reiterated that they have plans in place to suck up the
excess liquidity. We think that would be tough. Take it away too soon, economy falls
back into recession.
SOR and SIBOR is quite directly affected by US Fed funds rates and policies.
If the US suffers from inflation, the world's economy may suffer as well. And
Sibor and SOR may shoot up too. We cannot rule out this possibility.
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home loan company.
What we do is a research focused approach to help
busy home owners sort out the home loans and refinance home loans
balancing risk and rewards for each possible option they choose.
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Email: loans@propertyBUYER.com.sg
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