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)

Invest in Singapore Properties: Property investor review Oct 2009

Singapore property investor - buyer review Oct 2009

Singapore property investor

Singapore Q3, 2009 figures showed that "Singapore's economy grew 0.8% in the three months to September from a year ago". (Source: AFP)

Singapore is technically out of recession with two consecutive quarters of positive growth in Q2 and Q3.

"A clear but modest recovery is under way globally, at least for the next three or four quarters," but "One-off factors such as restocking activities and fiscal stimulus measures will continue to support growth in the near term."

"Manufacturing, which accounts for almost a quarter of Singapore's GDP, grew 8.3 percent in third quarter from a year ago and expanded 34.9 percent on a quarterly basis. The services industry shrank 2.4 percent on the year but expanded 9.5 percent on a quarterly basis. The construction sector surged 12.4 percent year-on-year but fell 0.6 percent from the previous three months." (Source: AFP)

These one off inventory restocking factors are what we are afraid were the primary reasons of Q3, 2009 recovery.

Singapore gets out of recession BUT Singapore property market cools.

We think that the Singapore government didn't expect that their positive media spin, easy credit largely kicked started by DBS and short term constriction of property supply (by property developers) has led to an almost 10 to 20% rise in valuation within one quarter. The Singapore government has therefore had to imposed anti-speculative measures recently in September for fear of a property bubble building up.

But the anti-speculative measures were imposed at a time when the market is already showing signs of slower volumes. It is strange, people buy when there are no fundamentals and slow down in buying when economic fundamentals improve.
Singapore economy recovers with Q3 figures up yet again

Q3, 2009 Singapore economic figures have improved, this means that the economy has firmed up a little and on the path to a slow recovery.

There is a likelihood that this is a recovery that is built for the ramp up to Q4 Christmas sales demand and re-stocking of inventories activities.

But the recovery (growth of Gross domestic product GDP) is likely to be a recovery without job growth at least for the short term.

Unemployment rate may still trend upwards while GDP growth resumes. In all likelihood, the recovery will likely be very mild and fraught with uncertainties and risks.

Possible risks to Singapore property market in 2010

1. Run out of stimulus funding in the US and elsewhere may lead to economy dropping back again.

2. China's stimulus funding (for their own domestic economy) is showing signs of fatigue. China's exports have also dropped. There are worries of stimulus funding being wasted on useless projects just to stimulate the economy.

3. Massive inflation. (The US Federal reserve has kept interest rates at 0.25% while it relied massively on foreign governments to lend it money (by buying it's treasury bonds) to fund it's massive deficit of around US$1 Trillion. The global community has started to lose confidence in the US. USD has started to fall relative to other currencies. The US may be forced to raise rates to attract lending. Other countries may not be interested to lend US the money and see the value of their lending fall.

The options are dire for the USA.

The US may continue to offer low rates and print more money without an actual offset through borrowings or it must raise rates.

Raising rates now will kill a still weak economy. Printing more money will infuriate America's lenders and lead to a cascade of USD falling + interest rates hikes.

Any upswing is likely to be moderate as developers have massive Singapore property supply in the years 2011 through 2015.

Possible positive factors to Singapore property market in 2010

Singapore must hold it's election latest by around June 2011. The economy must hold up well for the PAP to win another election.

Apart from the economy recovering (although very slowly), casinos are also ready in 2010. Media spin: The state controlled press' recent reports have always picked up and accentuated the positives (whether rightly or wrongly), despite the generally very weak economy. The press can single-handedly improve consumer sentiments. These can work in your favour or against you.

Improved sentiments may lead to more aggressive lending by banks, leading to the market over-heating. (remember, banks are usually pro-cyclical, they lend when markets are hot and they cut lending when everyone needs money). Singapore home loans rate may rise, but banks may sacrifice their margins to offer attractive rates which could stimulate the housing market. You will then be able to compare Singapore home loans across many banks who are very eager to lend you money.

Invest in Singapore properties now?


Generally we think that anytime is a good time to look for a property. It's a matter of getting the right price. There are good deals and bad deals in all economic cycles.

For Singapore property investors, now is a good time to look at Singapore property investments. The quieter property market means that there is less hype and more rational sellers. There is a much higher likelihood to get a better deal if you are careful and do your research before buying a properly. If you can find a property with consistent good yield at a good price, you may be able to use sentiments to your advantage when the hype builds up again in 2010 nearing election.

Holding power is still very important during this time as the economic fundamentals have not fully recovered and cash is still king.
Should Singapore property investor simply consider economic fundamentals?

As a Singapore property buyer - investor who wants to also profit from not just fundamentals but also sentiments. It is then important to recognise the sentiments in play.

For example, despite the fact that the market is really not as positive than it really is, but due to the SPIN from the media and other factors, that can work in your favour or against you. But also bear in mind that the media is something you have no control over.

For example, Singapore Aspen heights condo was trading at $1000 psf for units over 1300 sq feet in May 2009 and by July and August the prices have moved to around $1200 psf.

If any economic shocks occur, the property prices could fall. If you bought a property at $1200 psf and it drops back to 1000 psf, that would wipe out your 20% downpayment.

SUMMARY OF SINGAPORE PROPERTY MARKET Q3, Q4 2009

Going forward, economic recovery is going to be slow and bumpy. There exists much uncertainty and risks on the downside as well as some potential upside domestic surprises. Overall economy has stabilized with reduced risks of major economic shocks. There could also be a risk of the economy slipping back into the red, but this should be viewed as an opportunity to cheery pick.

Potential property market bubble curbed. Singapore government's land sales with it's more favourable terms and longer time to completion means developers are likely to bid higher.

Higher land prices are likely to translate higher selling prices (if there is holding power). Incomes are not recovering as fast, therefore the most likely outcome is smaller housing units selling at higher prices.

More and more property developers are likely to launch smaller size units to achieve their margins and meet the budget of the Singapore population. This could potentially lead to oversupply risks of smaller sizes units few years down the road.

Again we recommend that investors buy with caution and should have some cash buffer and holding power to limit the potential risks and to make sure to buy at the right price. If valuations drop and banks ask for equity top-up, most people will be caught unprepared.

Read More Singapore Property Investment articles
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TEL: 6100 - 0608
SMS: 9782 - 8606

Email: loans@propertyBUYER.com.sg

Invest in Singapore property: Select right property

Invest in Singapore property: Selecting the right property
Courtesy of www.propertyBUYER.com.sg
http://www.propertybuyer.com.sg/viewnews.php?article=109

There are many things to consider in property investment. Financing is one of them

First of all, let us clarify, we are NOT property agents, so we have no vested

interest in what property you select. We are merely writing this based on our

experience. We are Singapore Mortgage Brokers who help you get home

loans or to refinance your property.

Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php


The key things to consider in Property Investments are: -

* Affordability and holding power

* Rental yield

* Capital appreciation


Affordability and Holding Power

Ideally, you should not purchase an investment that is way beyond what you

can Safely Afford.


You should also have good holding power to withstand Mortgage home loan

interest rates fluctuation as well as have enough cash flow set aside for up

to 24 months of Mortgage Home loan installment.


This is important as market condition can become volatile and the last thing

you want to do is to sell your investment property at a huge loss in a

Singapore Property market stricken with panic.


You can check your affordability with us: -

Email: loans@propertybuyer.com.sg


Rental yield and Income

Rental yield is important in a property investment. However rental yield

cannot be over-emphasized.


What is important is the Return on Invested Capital (ROIC), most commonly

referred to as ROI.

Rental yield is: -

Annual Rental divide by Property purchase price


Return of Invested Capital (ROIC): -

[Annual Rental - (Interest financing cost) - (Maintenance & Misc Cost)] divided by Invested Capital

By looking simply looking at a property investment and comparing yield can

be very mis-leading. It is similar to looking at P/E for shares. As rental prices

fluctuate, so does property prices.


Buying based only on investment yield is the of the most foolish mistakes a

property buyer/investor can make.


RENTAL DEMAND

Singapore's rental demands are mainly derived from foreign expatriates as

most Singapore citizens own their own homes.


RENTAL SUPPLY

Property stock do not stay the same, as Property Developers will likely get

first hand information from Governmental development plans in order to add

to the supply.

PROPERTY VACANCY RATE

Singapore's property vacancy rate have traditionally stayed at around 6 to

8%. This means that 6 to 8% of all private properties remain vacant.


From the recent late 2006, 2007 and 2008 experience, especially in 2008,

population grew up around 5.5% to 4.8m. The bulk of the population growth

is through foreigners coming to Singapore to work or stay. This drives the

vacancy rate downwards to around 3 to 4%. Rental prices start to shoot

upwards when vacancy rate drops to around 3 to 4% as this indicates

severe shortage.


In order for vacancy rate to go from 7% to 3% (within a year), based on the

property stock of ~ 300,000 units of private property, that is 12,000 units of

additional rental demand needs to be created.


Given that property developers are adding to the stock all the time, in 2008

forecast supply growth is around 4%.


That means for 2009, there needs to be 24,000 rental demand (within a

year) in order to SQUEEZE the rental market. Of course certain locations

will be more SQUEEZED than the others and start to rise first.


Otherwise, the rental market will remain very SLACK and without direction.

What happens when RENTAL yields go up?

When rental rates go up, the yield increase. When the yield increase, the

property prices go up.

So it is important to look at YIELD for a rolling 2 to 5 years instead of simply

the latest and most recent yield.

As an illustration, a Property with a 4% Rental yield.

In 2006

$3,000 per month or $36,000 per year ------> $ 900,000

In 2007

$3,500 per month or $42,000 per year ------> $1,050,000

In 2008

$4,500 per month or $55,000 per year -------> $1,375,000

In 2009 and Beyond???

$3,000 per month or $36,000 per year -------> $ 900,000

Given that property developers usually hold out till rental prices are good

before they launch so as to capture the BULK of the VALUE. And because

the property developers time it so well, the BULK of the VALUE created for

their company is from you and paid for BY YOU.


The average yield for SIngapore Properties is around 3 to 5%. At 4%, it

represents a 25 times leverage.

For every $100 increase in monthly rental, it leads to $1200 rise in annual

rental and hence $30,000 more for a property!!!


MAJOR RISK BUYING AT HEIGHT OF RENTAL PRICES

If you go in at 2008 thinking that a property is NOT BAD at 4% yield, it is

worth it to pay $1,375,000, you are exposing yourselves to a huge risk,

because if rental values cannot keep up or falls back, you are looking at a

$475,000 of capital loss.


WHAT IF BANKS ASKS YOU TO TOP UP CASH

And in case the banks exercise their clause to ASK YOU TO TOP UP your

equity in the home / property since the valuation has FALLEN, you will face

severe hardship!!!


CAPITAL APPRECIATION POTENTIAL

Some Singapore properties such as River Valley, Orchard road as well as

Singapore properties around District 9, 10, 11 and 15 have highly volatile

rental prices.

For example a yield of 10%, (formula 1 / 0.1 = 10) the leverage is 10 times.

For a rental of $12,000 a year, this leads to a

Capital value of $120,000


For a yield of 4%, (formular 1/0.04 = 25) the leverage is 25 times.

For a rental of $12,000 a year, this leads to a

Capital value of $300,000


So it is important to compare and get the yield from a Rolling 3 year

average, 5 year average from which to do your calculation. Otherwise you

are prone to make the "Mistakes of small numbers", by basing your decision

on a particular short span of track record of the property market and it's

possible income (rental).


Strata Title

No matter where you go, buying a condominium unit will entitle you to a

share of the land where the condominium is located. The higher the

Condominium go, the less land share you have.

As an illustration: -

Land of Estate = 200,000 sq feet

Plot ratio is 3 = 600,000 sq feet

That means that that entire plot of land builds up to 600,000 of space that

can be SOLD to public.


That can be either 3 storeys x 200,000 sq feet or 6 storeys x 100,000 sq feet

or 24 storeys x 25,000 sq feet each floor. Developers will build higher or

lower depending on regulatory requirements.


Let's say 600,000 sq feet is built into 600 condominium units of 1,000 sq feet

each.

If you own a 1 condo unit, your share of PHYSICAL LAND is only 333 sq

feet.


This is vastly different from owning a landed property where you own the lot.

Strata title risks.

Strata title land has some risks of collective decision making. For example if

80% or 90% (depending on age of property) decides to sell to an en-bloc

developer, even if you disagree, you will have to sell.

En-bloc may not necessarily be a good thing in some circumstances.

Landed Title risks

Landed title do not have the risks of Collective decision being imposed on

you. But it holds other risks. Due to the smaller cost for the government to

acquire your land under Urban redevelopment Authority's land acquisition

act, in case the government wants to build a road through your house, your

house will be forcibly acquired. And although the government pays a market

price (or so they claim) for your property, most people whose property had

been acquired has never been really happy with the compensation. And the

government do time their purchase at a time when the market values are

low, leading to home owners capitalising the losses.


Should we go as high as possible?

Typically NO. Taller buildings have a higher maintenance cost over the longer term. Not only that, you are paying more for a building rather than the Land.


Over time, the building deteriorates. And if the land's appreciate does not

offset the price drop of the aging building, the Capital appreciation could be

moderated.

Should we go as low as possible?

Yes, generally true as you own more of the "Physical Land". But if you want

to own a condominium which has less than 6 storeys high, you may miss out

on speculative demand from Foreign buyers.

6 Storey High Properties

Foreigners cannot buy landed property or property whose development has

less than 6 storeys high. This is to prevent hedge funds and wealthy

individuals from cornering and hence controlling Singapore's domestic

economy through LAND.


Singapore mortgage advisor like us to help you go through many valuations

and recommend a SAFE price to bid for your property. That drags out the

buying time.


Why work through www.PropertyBUYER.com.sg for mortgage home loans?

We help property buyers to look through each property's valuation to

establish a valuation range for any given unit. And based on that, we

recommend a bid price for the buyer.



www.propertyBUYER.com.sg is a research-focused Singapore Mortgage

Advisor that helps individuals get the best fit Singapore Home loans or to

refinance their properties, not simply the cheapest Singapore Home loans.

You can come to us for your Singapore Home Loan needs and we will do the

research work to compare all the bank's packages as well as assess the

best fit for you.

ABOUT US Contact us

Tel: 6100 - 0608 sms: 9782 - 8606

Email: loans@propertyBUYER.com.sg

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Understand Property Investing and Sub-prime

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Refinance and Mortgages DIY steps

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