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Showing posts with label singapore mortgage. Show all posts
Showing posts with label singapore mortgage. Show all posts
Sunday, April 13, 2014
Sunday, December 1, 2013
Should You Avoid Frivolous And Multiple AIP Home Loan Applications?
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Monday, August 26, 2013
Home Loans: How To Compute The Effective And Nominal Interest Rates?
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Saturday, January 14, 2012
Property investors hit by Singapore's Additional Buyer Stamp Duty
Effective 8th Dec 2011 – Singapore’s URA imposes additional buyer stamp duty
If you are buying a property in Singapore and you are a foreigner, you will now be faced with an additional buyer stamp duty on top of the existing stamp duty imposed on property transactions.
Currently the stamp duty for purchasing a residential property is: -
• 1% of the selling price for the first $180,000
• 2% of the selling price for the next $180,000
• 3% of the selling price for the from $360,000 onwards.
Will Luxury Condominiums targeted at foreigners to be hit by new regulation?
Additional stamp duty is being imposed to cool the RESIDENTIAL property market.
The Additional Property Buyer stamp duty (ABSD) from 08 Dec 2011 is:
Foreigners and Corporate entities buying Residential private property have to pay an additional buyer stamp duty of
10 percent
Permanent residents (PR) owning one and buying the second and subsequent residential property will be liable to an Additional buyer stamp duty
• 3 percent
Singapore citizens owning 2 and buying the third and subsequent residential property will pay an additional buyer stamp duty
• 3 percent
Permanent Residents owning 1 and buying the 2nd and subsequent residential property will pay an additional buyer stamp duty
• 3 percent
Singapore Citizens (Singaporeans) owning two2 and buying the third and subsequent residential property will pay an ABSD of
• 3 percent
Foreign purchases account for 19% of all private residential property purchases in 2H 2011, up from 7% in 1H 2009. (URA)
In the case of a joint purchase, as long as any party is a PR or Foreigner, the higher additional property buyer stamp duty will apply.
HDB Property Buyers not affected URA clarified that HDB property buyers are not affected
Buyers for HDB properties are not affected by Additional Buyer stamp duty. Only Singaporeans and PR are eligible to buy a HDB flat. Someone buying into HDB flat or a new unit under the DBSS or EC will not be subjected to Additional buyer stamp duty since they will have dispose of their current property as part of the conditions for the purchase of the HDB, DBSS or EC units.
Buying property in singapore is becoming a complicated affair.
Likely Effects of Singapore's Additional Buyer Stamp DutyWhat is the effect of the Additional Buyer Stamp Duty (ABSD)?
We praise the URA for making this additional cooling measure. This measure will further cool the market. This cooling measure is also timely as it prevents foreign owned corporate entities from cheaply buying up private properties. There is currently a lot of Money supply in the world as the M2 money growth has often outpaced the growth of the GDP, especially since 2009 when the US has printed more money via quantitative easing. This may be a preemptive move against possible asset inflation. (Appendix 1: US M2 Money Supply and European M2 Money Supply).
What this means is, if these money is to be put to use to buy up assets, 10% of additional buyer stamp duty won’t entirely stop them from buying into Singapore properties, but only slow them down.
Inflation reduction?
What affects inflation?
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.
In recent years, money supply has grown largely faster than GDP growth. What this tells you is, the money velocity is slow. People are not spending. Even in Singapore, although inflation is 5.4% in 2011, it is still fairly stable and controllable in view of looming recession in Europe.
However there is risk as money supply is ample. Once there is light at the end of the tunnel, confidence returns, velocity of money will pick up. And at that time, the Quantity (Supply) will have to pick quickly to control price rises. As far as property is concerned, the lead time to complete a unit is 2 to 4 years and this will lead to imbalance in prices.
M2 or M3 increase x V = P x Q
Imposing a stamp duty has the effect of reducing the foreign owned portion of M2 or M3 from the Singapore 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.
Singapore Recession worries
Now, with the European debt crisis looming, we wonder whether this is the right time to impose such a regulatory measure. After all the property market has already cooled dramatically. Moreover, this policy hurts the mid tier private property markets and entry level luxury more.
Should the policy target run away prices in HDB instead?
In view of the massive under-supply of HDB’s physical stock given the massive mass increase in population, it will still take several years to balance the supply and demand. Currently demand far outstrip supply.
HDB pricing index will likely continue to rise into 2012 and 2013 as imbalance is gradually more balanced.
While DBSS is being added to the supply, these Design, Build and sell housing by private developers of HDB houses lead to a even more severe rise in HDB housing prices.
DBSS developers buy expensive land from the Singapore government, add on their profit and then pass on these costs to helpless Singaporeans and Permanent citizens.
Singapore government is the ultimate winner in terms of the good price for the land.
Spill over may soon be seen in Executive Condominium (EC) with some ECs approaching prices of Mass Market condominium prices. This supports the prices of mass market condominium to be launched in large volumes.
Unfortunately this additional buyer stamp duty (ABSD) does not apply to HDB, Design, Build and Sell (DBSS) and Executive Condominium (EC). This ABSD affects Private property while what it should have done is to manage HDB price rises, especially the Run-away prices of DBSS flats. It’s unfortunately for Singaporeans.
Severe Demographic effects – Singapore’s Resident Population to dramatically increase?
Could more PR become Singaporeans so as to buy more private property (a third or more)?.
More foreigners holding employment pass will apply to become Permanent residents to qualify for buying HDB flats, leading to more housing demand pressures.
Expatriates faced with additional Buyer stamp duty on buying private residential property and is not well off enough to buy a private property will likely want to become Permanent resident (PR) so as to buy a HDB. This scenario is quite unfavourable for Singapore as we may be attracting the lower level and lower skilled expatriates competing with native Singaporeans.
Our Proposal for the regulatory changes: -
If we cannot keep regulations simple, then perhaps this regulations could be considered.
To impose the following regulations on: - Proposal to Impose regulations on: -
Housing Development Board Flats
• HDB flat owners who own a private property must stay in their HDB regardless of whether they meet the minimum occupation period (MOP), within 2 years of this announcement. Else these HDB home owners must sell their HDBs in the resale market.
o This stops existing HDB home owner from owning a HDB and staying elsewhere and making money by renting out their HDB flats.
o No force to be applied to them to sell their HDB flats, but they cannot make money via renting out their HDB flats while owning other Private residential properties and staying in private residential properties.
• To prevent new Permanent Residents from competing in the HDB market, all Permanent Residents (PR) must wait 5 years upon attaining PR before qualifying to buy a HDB flat. (This is to prevent lower tier foreign talents from speculating in the public HDB Singapore property market).
o All PRs to pay additional buyer stamp duty of 10% on HDB resale flats.
Proposed regulation on Private Properties
• Corporate entities who buy residential properties will pay an additional buyer stamp duty of 10% (As URA proposed)
o This should be especially applied to landed properties where it is scarce.
• All New PRs must wait 5 years before being eligible to buy a landed property.
o PRs not meeting the 5 year waiting period shall be rejected by the Land Dealings Approval Unit (LDAU), else a 15% additional buyer’s stamp duty of 15% is applied.
For Foreigners or PR purchase of private property (non landed): -
o NO additional buyer stamp duty, but
o Loan to value from Singapore banks to be reduced to 50%.
Regulation for Commercial Properties
• Apply the additional property buyer stamp duty of 10% on Foreigners buying commercial properties.
Summary of additional buyer stamp duty
URA’s imposition of the additional buyer stamp duty is generally correct in pre-emptive prevention of inflation given the massive money supply, however the timing is questionable as European debt crisis is still unfolding and money velocity is still slow.
This policy seems like another political knee jerk reaction, while it hides dangerous and possible side effects of massively increasing the Singapore Citizen population and PR population through lower tier foreigners.
This additional buyer stamp duty should stop speculation in HDB instead and leave the private residential property market alone.
If the intended thinking behind this policy is to make HDBs more affordable, then our proposed policy changes will likely be more effective.
Wednesday, June 10, 2009
Singapore Property Investor and Buyer update June 2009
Singapore Property Investor and Buyer update June 2009
Courtesy of www.PropertyBUYER.com.sg
The property market has woken up remarkably from late Feb to now. Credit
has also eased considerably. In April and May we have started to see
property sellers becoming greedy by withdrawing their properties from the
market.
Contacts: -
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php
Remember we wrote in an earlier article about herd mentality, that when the market rises, everyone wants to go in. And sellers
withdraw. And when the market drops, suddenly every seller wants to come into the market and sell to add on to selling
pressure. This is the typical BUY HIGH, SELL LOW syndrome driven by 2 factors. Excessive greed and excessive fear, both are
bad for your financial health.
Obama's plan to stimulate the market to the tune of more than US$1 trillion dollars have finally sunk in, and the market
believes it will alleviate credit and share market has rallied in expectation that the recovery is coming. We emphasize the word,
"expectation". House prices have however continue to fall although it has fallen at a smaller rate which the market considers a
win!
Jobs are still being lost, although at a smaller rate which the market again consider a positive sign.
So these days, it seems that the market will take whatever slightly positive news and hope for the best.
The worst of the credit crisis looks over, however is consumption returning?
That is the doubtful part as US unemployment rate has broken through 9% as we write and will continue to worsen. (Although it
is worsening at a slower rate) We are hopeful that a recovery is coming. Americans consumers are losing wealth in the billions
as we speak, so it is expected that they will not be able to resume fully to their spending patterns of previous years.
Singapore Market Liquidity
There is enough liquidity (i.e. Money) in the Singapore financial system. In Jan 2009, Singapore's M1 money supply increased
by around 6 billion. There is also sufficient liquidity in the hands of the population (though it is not evenly distributed),
reduction in property prices tend to be able to draw out latent pent-up demand.
But is the recovery sustainable?
We seriously doubt that.
The Singapore GDP is still falling at a projected 6 to 9% annualised rate for 2009. Q1, 2009 GDP annualised fall is around -14%
and in order to reach our goal of a -9%, this means Q2 should come in around -10 to -12% and Q3 should be better than -9%
and Q4 should at least come in at -4 to -5%. And that will enable us to achieve a -9% GDP.
The large chip off our GDP is caused by our over-dependence on exports.
Demand overseas have fallen, factories have shut their gates, therefore, this
segment of the economy will continue to suffer.
Our exports depended a large part on the USA.
So while our Singapore GDP languish and unemployment continue to rise, it
is very hard to see how this recent property rally can be sustained after the
pent-up latent demand has been exhausted. A more stable market yes, but a
rising market? We doubt.
After August when the quieter property volume months resume, together
with reality of job losses, more property launches. So by August and
September we should get a clearer picture of the market.
Developers are clearing stock
The market is getting hot now, developers are launching 99 years properties
again to "CLEAR stock", so unless you really like these properties, there is a
reason why they clear the 99 years and not the 999 or FH properties in their
portfolio.
EN-BLOC developers Leasing out their properties on 2 year leases
Some developers who had bought en-bloc developments and who have
been lucky enough NOT TO TEAR down the development yet, have begun
leasing their properties out on 1 year and 2 years leases. This also indicate
that these developers who have been caught out cold are expecting that the
economy will NOT RECOVER ENOUGH for them to tear down and launch their
properties for sale at the prices they want. So rather than tear it the property
down, they are leasing it out on 2 year leases and tying themselves in.
Exercise Caution
There are always good deals and bad deals in any property cycle. People
buy property for various reasons. We are not advocating whether to buy or
not to buy, but rather that you should exercise caution when buying (if you
buy).
Dishonest Property agents are on the loose again when market hots up
Property agents are again out on the loose and here is one on Singapore
Management University (SMU). Do not buy on impulse or greed and do NOT
bring your cheque books when going for a viewing. It's okay we lose a Home
loan deal, but it's not okay if you over-pay by too much.
we strongly encourage you to do your home work.
http://www.propertybuyer.com.sg/viewnews.php?article=107
But if you still decide to buy after reading our articles, please consider to use
our services for Getitng your HOME LOAN or to refinance your home loan. The service is free to you as we receive a fee from
the banks.
Contact them at: -
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php
Property Checklist / Guide (Kiasu one)
http://www.propertybuyer.com.sg/viewnews.php?article=39
Read More of their articles
http://www.propertyBUYER.com.sg/articlesnews.php
Courtesy of www.PropertyBUYER.com.sg
The property market has woken up remarkably from late Feb to now. Credit
has also eased considerably. In April and May we have started to see
property sellers becoming greedy by withdrawing their properties from the
market.
Contacts: -
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php
Remember we wrote in an earlier article about herd mentality, that when the market rises, everyone wants to go in. And sellers
withdraw. And when the market drops, suddenly every seller wants to come into the market and sell to add on to selling
pressure. This is the typical BUY HIGH, SELL LOW syndrome driven by 2 factors. Excessive greed and excessive fear, both are
bad for your financial health.
Obama's plan to stimulate the market to the tune of more than US$1 trillion dollars have finally sunk in, and the market
believes it will alleviate credit and share market has rallied in expectation that the recovery is coming. We emphasize the word,
"expectation". House prices have however continue to fall although it has fallen at a smaller rate which the market considers a
win!
Jobs are still being lost, although at a smaller rate which the market again consider a positive sign.
So these days, it seems that the market will take whatever slightly positive news and hope for the best.
The worst of the credit crisis looks over, however is consumption returning?
That is the doubtful part as US unemployment rate has broken through 9% as we write and will continue to worsen. (Although it
is worsening at a slower rate) We are hopeful that a recovery is coming. Americans consumers are losing wealth in the billions
as we speak, so it is expected that they will not be able to resume fully to their spending patterns of previous years.
Singapore Market Liquidity
There is enough liquidity (i.e. Money) in the Singapore financial system. In Jan 2009, Singapore's M1 money supply increased
by around 6 billion. There is also sufficient liquidity in the hands of the population (though it is not evenly distributed),
reduction in property prices tend to be able to draw out latent pent-up demand.
But is the recovery sustainable?
We seriously doubt that.
The Singapore GDP is still falling at a projected 6 to 9% annualised rate for 2009. Q1, 2009 GDP annualised fall is around -14%
and in order to reach our goal of a -9%, this means Q2 should come in around -10 to -12% and Q3 should be better than -9%
and Q4 should at least come in at -4 to -5%. And that will enable us to achieve a -9% GDP.
The large chip off our GDP is caused by our over-dependence on exports.
Demand overseas have fallen, factories have shut their gates, therefore, this
segment of the economy will continue to suffer.
Our exports depended a large part on the USA.
So while our Singapore GDP languish and unemployment continue to rise, it
is very hard to see how this recent property rally can be sustained after the
pent-up latent demand has been exhausted. A more stable market yes, but a
rising market? We doubt.
After August when the quieter property volume months resume, together
with reality of job losses, more property launches. So by August and
September we should get a clearer picture of the market.
Developers are clearing stock
The market is getting hot now, developers are launching 99 years properties
again to "CLEAR stock", so unless you really like these properties, there is a
reason why they clear the 99 years and not the 999 or FH properties in their
portfolio.
EN-BLOC developers Leasing out their properties on 2 year leases
Some developers who had bought en-bloc developments and who have
been lucky enough NOT TO TEAR down the development yet, have begun
leasing their properties out on 1 year and 2 years leases. This also indicate
that these developers who have been caught out cold are expecting that the
economy will NOT RECOVER ENOUGH for them to tear down and launch their
properties for sale at the prices they want. So rather than tear it the property
down, they are leasing it out on 2 year leases and tying themselves in.
Exercise Caution
There are always good deals and bad deals in any property cycle. People
buy property for various reasons. We are not advocating whether to buy or
not to buy, but rather that you should exercise caution when buying (if you
buy).
Dishonest Property agents are on the loose again when market hots up
Property agents are again out on the loose and here is one on Singapore
Management University (SMU). Do not buy on impulse or greed and do NOT
bring your cheque books when going for a viewing. It's okay we lose a Home
loan deal, but it's not okay if you over-pay by too much.
we strongly encourage you to do your home work.
http://www.propertybuyer.com.sg/viewnews.php?article=107
But if you still decide to buy after reading our articles, please consider to use
our services for Getitng your HOME LOAN or to refinance your home loan. The service is free to you as we receive a fee from
the banks.
Contact them at: -
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php
Property Checklist / Guide (Kiasu one)
http://www.propertybuyer.com.sg/viewnews.php?article=39
Read More of their articles
http://www.propertyBUYER.com.sg/articlesnews.php
Wednesday, May 20, 2009
Invest in Singapore Property: Singapore Property Stamp Duty
Invest in Singapore Property: Singapore Property Stamp Duty
Courtesy of http://www.PropertyBUYER.com.sg
http://www.propertybuyer.com.sg/viewnews.php?article=105
ABOUT US Contact us
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php
Stamp duty for Property Purchase for Singapore Properties
Conveyance: Purchase Price or Market Value, whichever is higher
For the First $180,000 - 1% = $1,800
For the next $180,000 - 2% = $3,600
Thereafter, - 3%
Before you even consider a property or a Home loan mortgage, you should
first assess whether you can afford a property.
If the property is valued at or transacted at $1,000,000, your stamp duty will
be: -
For the First $180,000 - 1% = $ 1,800
For the next $180,000 - 2% = $ 3,600
For the next $ 640,000 - 3% = $19,200
The Stamp duty = $24,600
If you are able to get a 90% loan to a property valuation, you will need 10%
downpayment, plus roughly 3% for Stamp duty.
For a 90% loan to valuation, for a $1,000,000 property, you will need to
standby for downpayment: -
* $124,600
This is the minimum amount required.
Problems with 90% Loan to valuation
Since 90% loans become available, this affordability has led to property
becoming more affordable. But due to this affordability, it has created an
increased number of people being able to afford Private properties. On top
of that, banks are increasing their number of years of loan tenure from 20 to
25 to 30 and even 35 or 40 years in some cases.
This has the effect of reducing the monthly installment, leading to more
people chasing after properties and eventually elevated property prices.
We are very worried about this development. The false sense of affordability
will surely come back to haunt the person or the Singapore economy when
they hit their CPF withdrawal limits.
We will talk about that in the next article.
www.PropertyBUYER.com.sg is a Research-Focused Mortgage Advisory that do NOT emphasize Cheap rates, but balance risks versus possible savings and structure the best fit mortgage packages based on the Home Owner's personal circumstances. On top of that, we help buyers check the property valuations and recommend a safe bid price for their properties and help them in getting a Home Loan approved-in-principle before they go into a property price negotiation and before they pay a 1% option to purchase.
Contact us
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
Contact us
http://www.propertybuyer.com.sg/contactus.php
Read More articles
http://www.propertyBUYER.com.sg/articlesnews.php
Courtesy of http://www.PropertyBUYER.com.sg
http://www.propertybuyer.com.sg/viewnews.php?article=105
ABOUT US Contact us
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php
Stamp duty for Property Purchase for Singapore Properties
Conveyance: Purchase Price or Market Value, whichever is higher
For the First $180,000 - 1% = $1,800
For the next $180,000 - 2% = $3,600
Thereafter, - 3%
Before you even consider a property or a Home loan mortgage, you should
first assess whether you can afford a property.
If the property is valued at or transacted at $1,000,000, your stamp duty will
be: -
For the First $180,000 - 1% = $ 1,800
For the next $180,000 - 2% = $ 3,600
For the next $ 640,000 - 3% = $19,200
The Stamp duty = $24,600
If you are able to get a 90% loan to a property valuation, you will need 10%
downpayment, plus roughly 3% for Stamp duty.
For a 90% loan to valuation, for a $1,000,000 property, you will need to
standby for downpayment: -
* $124,600
This is the minimum amount required.
Problems with 90% Loan to valuation
Since 90% loans become available, this affordability has led to property
becoming more affordable. But due to this affordability, it has created an
increased number of people being able to afford Private properties. On top
of that, banks are increasing their number of years of loan tenure from 20 to
25 to 30 and even 35 or 40 years in some cases.
This has the effect of reducing the monthly installment, leading to more
people chasing after properties and eventually elevated property prices.
We are very worried about this development. The false sense of affordability
will surely come back to haunt the person or the Singapore economy when
they hit their CPF withdrawal limits.
We will talk about that in the next article.
www.PropertyBUYER.com.sg is a Research-Focused Mortgage Advisory that do NOT emphasize Cheap rates, but balance risks versus possible savings and structure the best fit mortgage packages based on the Home Owner's personal circumstances. On top of that, we help buyers check the property valuations and recommend a safe bid price for their properties and help them in getting a Home Loan approved-in-principle before they go into a property price negotiation and before they pay a 1% option to purchase.
Contact us
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
Contact us
http://www.propertybuyer.com.sg/contactus.php
Read More articles
http://www.propertyBUYER.com.sg/articlesnews.php
Sunday, May 17, 2009
HDB Loan: Pay down your HDB loan slowly
HDB Loan: Pay down your HDB loan slowly
Article Contributed by www.PropertyBUYER.com.sg
Tel : 6100 0608
SMS : 9782 8606
Email : loans@propertyBUYER.com.sg
Contact us : http://www.PropertyBUYER.com.sg/contactus.php
In the recent months, we have come across many individuals calling us up trying to get cash out of their HDB homes.
This person, let's call him Mr. Tan. He bought a HDB property for $400,000. The HDB property is worth $450,000 he reckons.
Bought at :$400,000
Current estimated value :$450,000
CPF/HDB interest rate :2.6%
The outstanding loan size :$120,000
PAYING DOWN YOUR HDB LOAN?
Just 2 years ago, Mr. Tan used $50,000 from his CPF to reduce the outstanding loan amount. This wiped out his entire CFP ordinary account savings.
Mr. Tan's home loan installment is ~$1000 a month. $500 each him and $500 from his wife.
However Mr. Tan recently lost his job and his CPF has totally run out. This leaves him having to pay $500 cash for his HDB flat.
Mr. Tan came to enquire with us. He would like to refinance his HDB and get CASH OUT.
Since his house is only owing very little. Assuming that the price is $450,000 with a debt of $120,000, the equity in the HDB flat should be $330,000.
That was what Mr. Tan thought. He needed some cash to tide him over the financial crisis.
HDB flats have NO (ZERO) Equity for Term Loan
What many people forget is that HDB flats have no equity in the refinance market. Under current HDB rules, banks cannot give term loans to HDB flats.
DEBT is BAD???
For those people on HDB preferential loan of 2.6%, DEBT is not a bad thing. If they took their time to pay for the installment, the cash held in ordinary account would be earning 2.5% while the debt is payable at 2.6%. This represents a very small spread of 0.1%. This is hardly anything. For $100,000 this is just $100 dollars.
Of course if the couple had the money, they should pay off the debt so that it is cheaper in the long run. (even though it is very marginal)
In this case, DEBT is not a bad thing. Debt is better than having no food on the table.
What Should Mr. Tan have done? (If he met us earlier)
We would have advised Mr. TAN not to use his $50,000 from CPF ordinary account to pay down his loan. Sure, the extra 0.1% cost (pay 2.6% while earning 2.5% interest) would cost him roughly $50 a year. But that is a very small price to pay, it is similar to buying insurance.
With CPF savings of $50,000, Mr. Tan should have kept at least $12,000 from his CPF ordinary account to stand-by for at least 12 months worth of HDB installment/repayment.
This way, in case he did not have an income, at least he does not need to fork out more money to maintain the house.
Unfortunately we cannot help him this time and we are saddened by this and the several incidents that came before Mr. Tan.
In case you are in Mr. Tan's position, even when you still have a job, we see no rush in paying back your HDB loan in double quick time and paint yourself into a corner.
If you haven't done it yet, we strongly encourage you to give yourself some breathing room of at least 12 to 24 months. Keep 24 months worth of HDB repayment in your CPF ordinary account in case of emergency.
REFER a FRIEND TO US
Contact us : 6100 0608
SMS : 9782 8606
Email : loans@propertybuyer.com.sg
http://www.PropertyBUYER.com.sg/contactus.php
Article Contributed by www.PropertyBUYER.com.sg
Tel : 6100 0608
SMS : 9782 8606
Email : loans@propertyBUYER.com.sg
Contact us : http://www.PropertyBUYER.com.sg/contactus.php
In the recent months, we have come across many individuals calling us up trying to get cash out of their HDB homes.
This person, let's call him Mr. Tan. He bought a HDB property for $400,000. The HDB property is worth $450,000 he reckons.
Bought at :$400,000
Current estimated value :$450,000
CPF/HDB interest rate :2.6%
The outstanding loan size :$120,000
PAYING DOWN YOUR HDB LOAN?
Just 2 years ago, Mr. Tan used $50,000 from his CPF to reduce the outstanding loan amount. This wiped out his entire CFP ordinary account savings.
Mr. Tan's home loan installment is ~$1000 a month. $500 each him and $500 from his wife.
However Mr. Tan recently lost his job and his CPF has totally run out. This leaves him having to pay $500 cash for his HDB flat.
Mr. Tan came to enquire with us. He would like to refinance his HDB and get CASH OUT.
Since his house is only owing very little. Assuming that the price is $450,000 with a debt of $120,000, the equity in the HDB flat should be $330,000.
That was what Mr. Tan thought. He needed some cash to tide him over the financial crisis.
HDB flats have NO (ZERO) Equity for Term Loan
What many people forget is that HDB flats have no equity in the refinance market. Under current HDB rules, banks cannot give term loans to HDB flats.
DEBT is BAD???
For those people on HDB preferential loan of 2.6%, DEBT is not a bad thing. If they took their time to pay for the installment, the cash held in ordinary account would be earning 2.5% while the debt is payable at 2.6%. This represents a very small spread of 0.1%. This is hardly anything. For $100,000 this is just $100 dollars.
Of course if the couple had the money, they should pay off the debt so that it is cheaper in the long run. (even though it is very marginal)
In this case, DEBT is not a bad thing. Debt is better than having no food on the table.
What Should Mr. Tan have done? (If he met us earlier)
We would have advised Mr. TAN not to use his $50,000 from CPF ordinary account to pay down his loan. Sure, the extra 0.1% cost (pay 2.6% while earning 2.5% interest) would cost him roughly $50 a year. But that is a very small price to pay, it is similar to buying insurance.
With CPF savings of $50,000, Mr. Tan should have kept at least $12,000 from his CPF ordinary account to stand-by for at least 12 months worth of HDB installment/repayment.
This way, in case he did not have an income, at least he does not need to fork out more money to maintain the house.
Unfortunately we cannot help him this time and we are saddened by this and the several incidents that came before Mr. Tan.
In case you are in Mr. Tan's position, even when you still have a job, we see no rush in paying back your HDB loan in double quick time and paint yourself into a corner.
If you haven't done it yet, we strongly encourage you to give yourself some breathing room of at least 12 to 24 months. Keep 24 months worth of HDB repayment in your CPF ordinary account in case of emergency.
REFER a FRIEND TO US
Contact us : 6100 0608
SMS : 9782 8606
Email : loans@propertybuyer.com.sg
http://www.PropertyBUYER.com.sg/contactus.php
Friday, May 15, 2009
Invest in Singapore Property: Jurong Lake District
Invest Singaore, Invest in Singapore's Own Lake District
Courtesy of http://www.PropertyBUYER.com.sg/articlesnews.php
"...National Development Minister Mah Bow Tan yesterday unveiled a vision for a revamped Jurong, starting with a new name: the Jurong Lake District.
The ambitious plan, to be implemented over the next 10 to 15 years, involves building new waterways, 1,000 private homes, 2,800 hotel rooms and adding 750,000 sq m of office and retail space.
The Jurong Lake District, which at 360ha is the size of Marina Bay, will consist of two precincts.
One is the 70ha Jurong Gateway, which will boast swanky new offices, condos and entertainment features, including an Olympic-size ice-skating rink, all set around Jurong East MRT station.
The other is Lakeside, which is being targeted as a hang-out for young families.
It will feature a bold new science centre, tourist attractions and parks complemented by water activities, all set around the Chinese Garden and Lakeside MRT stations.
Mr Mah told a 500-strong audience at an Urban Redevelopment Authority (URA) seminar yesterday that many Singaporeans saw Jurong as a suburban residential and industrial area 'located far away from the city centre'.
But he described it as a 'gem', with compelling reasons singling it out for redevelopment. It is near established towns, with a large labour force and a population catchment of more than one million residents...."
Source: Channel News Asia
http://www.channelnewsasia.com/stories/singaporelocalnews/view/339270/1/.html
Should we buy into the Jurong Lake District Dream?
For those of you who have been to the UK Lake District, you will know that
Singapore's Jurong Lake District will never match up. The air, the breeze
and even the rustle in the wind is different, not to mention the clean air free
of industrial pollutant.
And the above is the BEST CASE scenario assuming the beautiful scenario
comes true.
Will Jurong Lake District become reality?
Do you remember Minister Mah Bow Tan wanted Singapore to qualify for
World Cup in 2010? It's 2009, what do we have to show for it?
Remember what happened to Punggol 21?
http://www.mrbrownshow.com/2007/09/21/the-mrbrown-show-punggol-21-plus-plus/
Do you remember what happened to Punggol 21? The hype, the excitement
and the promise! So many people bought into the dream of a leisurely and
riverside lifestyle. They ended up buying into expensive HDB units which
were half occupied.
The place was so deserted that there were hardly any amenities and facilities. It took a good 10+ years and yet the promise is still not fulfilled.
Singapore's very own Lake District
Any chance of Jurong Lake District happening? We suspect the only people
laughing all the way to the bank are the developers who timed their property
launches after the government announces this publicity campaign.
The government's track record of fulfilling plans such as Punggol 21 and sengkang new town is not compelling. There were a lot of promises.
The industrial parks and the factories are not about to move out of Jurong
any time soon, pollution is still a problem. Although there are some logistics
park and some business parks, building houses around 2 lakes is hardly a dream, much less a beautiful dream.
Even if all the commercial activities do take off, we doubt the place will be a
truly enjoyable living experience as it will be over crowded. (You only need to
take a MRT ride to Boon Lay to experience it today).
Should you pay for your Home at an inflated price?
We would not hold our breath for Jurong Lake District, until more plans and
concrete action becomes available. Not more nice plans and announcements!!!
Should you hold your breath for it? It's up to you, if you already like the place
even before the hype, by all means go for it. But if you are buying into the
hype, we suggest you have at least 10 to 20 years of holding power.
Or you can wait for the Singapore government to cook up another beautiful scenario
and remember to OFF LOAD your property at that time. During this time, the
rental in Jurong is uncertain at best.
This means you should avoid 99 years lease hold properties, because
capital values of 99 years properties do not hold so well when the number of
years remaining on the lease is shorter.
About www.PropertyBUYER.com.sg
www.PropertyBUYER.com.sg is a research-focused mortgage Advisory that do NOT simply emphasize cheap rates but rather what works best for the individual based on his/her circumstances to structure a balanced Risk versus Benefit home loan or refinancing package. The service is Free to you as banks pay them directly as banks save on staffing cost.
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
Contact us
http://www.propertybuyer.com.sg/contactus.php
Read More articles
http://www.propertyBUYER.com.sg/articlesnews.php
Refinance and Mortgages DIY steps
http://www.squidoo.com/Singapore-homeloan
Courtesy of http://www.PropertyBUYER.com.sg/articlesnews.php
"...National Development Minister Mah Bow Tan yesterday unveiled a vision for a revamped Jurong, starting with a new name: the Jurong Lake District.
The ambitious plan, to be implemented over the next 10 to 15 years, involves building new waterways, 1,000 private homes, 2,800 hotel rooms and adding 750,000 sq m of office and retail space.
The Jurong Lake District, which at 360ha is the size of Marina Bay, will consist of two precincts.
One is the 70ha Jurong Gateway, which will boast swanky new offices, condos and entertainment features, including an Olympic-size ice-skating rink, all set around Jurong East MRT station.
The other is Lakeside, which is being targeted as a hang-out for young families.
It will feature a bold new science centre, tourist attractions and parks complemented by water activities, all set around the Chinese Garden and Lakeside MRT stations.
Mr Mah told a 500-strong audience at an Urban Redevelopment Authority (URA) seminar yesterday that many Singaporeans saw Jurong as a suburban residential and industrial area 'located far away from the city centre'.
But he described it as a 'gem', with compelling reasons singling it out for redevelopment. It is near established towns, with a large labour force and a population catchment of more than one million residents...."
Source: Channel News Asia
http://www.channelnewsasia.com/stories/singaporelocalnews/view/339270/1/.html
Should we buy into the Jurong Lake District Dream?
For those of you who have been to the UK Lake District, you will know that
Singapore's Jurong Lake District will never match up. The air, the breeze
and even the rustle in the wind is different, not to mention the clean air free
of industrial pollutant.
And the above is the BEST CASE scenario assuming the beautiful scenario
comes true.
Will Jurong Lake District become reality?
Do you remember Minister Mah Bow Tan wanted Singapore to qualify for
World Cup in 2010? It's 2009, what do we have to show for it?
Remember what happened to Punggol 21?
http://www.mrbrownshow.com/2007/09/21/the-mrbrown-show-punggol-21-plus-plus/
Do you remember what happened to Punggol 21? The hype, the excitement
and the promise! So many people bought into the dream of a leisurely and
riverside lifestyle. They ended up buying into expensive HDB units which
were half occupied.
The place was so deserted that there were hardly any amenities and facilities. It took a good 10+ years and yet the promise is still not fulfilled.
Singapore's very own Lake District
Any chance of Jurong Lake District happening? We suspect the only people
laughing all the way to the bank are the developers who timed their property
launches after the government announces this publicity campaign.
The government's track record of fulfilling plans such as Punggol 21 and sengkang new town is not compelling. There were a lot of promises.
The industrial parks and the factories are not about to move out of Jurong
any time soon, pollution is still a problem. Although there are some logistics
park and some business parks, building houses around 2 lakes is hardly a dream, much less a beautiful dream.
Even if all the commercial activities do take off, we doubt the place will be a
truly enjoyable living experience as it will be over crowded. (You only need to
take a MRT ride to Boon Lay to experience it today).
Should you pay for your Home at an inflated price?
We would not hold our breath for Jurong Lake District, until more plans and
concrete action becomes available. Not more nice plans and announcements!!!
Should you hold your breath for it? It's up to you, if you already like the place
even before the hype, by all means go for it. But if you are buying into the
hype, we suggest you have at least 10 to 20 years of holding power.
Or you can wait for the Singapore government to cook up another beautiful scenario
and remember to OFF LOAD your property at that time. During this time, the
rental in Jurong is uncertain at best.
This means you should avoid 99 years lease hold properties, because
capital values of 99 years properties do not hold so well when the number of
years remaining on the lease is shorter.
About www.PropertyBUYER.com.sg
www.PropertyBUYER.com.sg is a research-focused mortgage Advisory that do NOT simply emphasize cheap rates but rather what works best for the individual based on his/her circumstances to structure a balanced Risk versus Benefit home loan or refinancing package. The service is Free to you as banks pay them directly as banks save on staffing cost.
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
Contact us
http://www.propertybuyer.com.sg/contactus.php
Read More articles
http://www.propertyBUYER.com.sg/articlesnews.php
Refinance and Mortgages DIY steps
http://www.squidoo.com/Singapore-homeloan
Monday, May 4, 2009
Singapore Home Loan and US Home loans
Joseph Stiglitz says it. Tax cuts are too big and too ineffective, but that is part of the political process. Republicans want tax cuts to please the people that finance their election campaign. Stimulus packages are too small given that Republicans hijacked a large part of the funds for tax cuts.
Given that so many people are now out of work, the key to prevent property valuations falling and make the economic situation worse is to help home owners.
Only when US gets well can Singapore recover.
Singapore could do with banks helping out Home owners in default or going into default with their home loans. This will help the market recover faster. Banks do have some responsibility regarding getting people into this current situation in the first place by lending money to people who otherwise wouldn't qualify for the home loans. Banks should ease credit and only to tighten in the next cycle of upswing.
Friday, May 1, 2009
Invest in Singapore Properties: Protect yourselves from Rogue Dishonest agents
Singapore Property Investor: Protect yourselves from Rogue Dishonest agents
Courtesy of www.PropertyBUYER.com.sg
Contact them
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php
In an article by Straits Times, April 8, 2009.
"Eric Heng Jit Siang (left) conned 127 people, mainly foreigners and permanent residents...
Heng would pose as the owner of a property seeking to rent it out, milking the tenant for a deposit on the rent, and then pulling a disappearing act.
Using both landed properties and flats he had rented, the 33-year-old conned over $242,500 in rental deposits between last April and January out of 127 people.
The court heard that he rented 10 properties across Singapore, got hold of the keys and then placed advertisements in newspapers and in train stations seeking tenants.
When people responded to his advertisements, he posed as the owner of these properties and arranged to show them the units.
When the tenancy agreement was signed - and each unit was 'rented' out to more than one house-hunter - he collected money from each of them as a deposit on the rent or the utility bill."
(Source: The Straits Times, "http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_361167.html, Esther Tan")
HOW SOME SINGAPORE PROPERTY AGENTS BEHAVE
When you go to an agent, he/she brings you to see a property. He/she
always emphasize "Bring your cheque book". This is because in the heat of
the moment, sometimes you can get influenced into making a rash decision.
A rash decision is what an agent wants. Because no matter the house is
sold or not, he/she still gets his/her commission, while if you do not proceed,
you forfeit your Option to purchase deposit of 1% of the House price.
You can pay for a property that is NOT worth that much and eventually the
bank will not loan you the full amount you want to borrow or worse, you get
cheated.
Agents always tell you, it's best for them to negotiate on your behalf. Many times,
this is the worst scenario. We will talk about that in the next article.
PLACING AN OPTION TO PURCHASE
Usually the agent will ask you to place the cheque first for an amount.
But the agent did NOT get an agreement from the seller to sell at the
particular price. The agent will then use this cheque to dangle in front of the
seller inducing him/her to sell.
WHAT IS THE PROBLEM WITH GIVING A CHEQUE?
Usually, the agent will take your cheque without asking you to sign the
Option to purchase agreement.
There is No verification of who you are writing the cheque to.
If the property is $1m, 1% = $10,000.
Giving a cheque without proper verification is like passing someone your 1
CARAT Diamond ring without checking his identity.
In case the agent asks you to write to an "Imaginery owner" of the property
which is his/her friend, the agent can cash your cheque and run if he is
crooked.
Even if the agent is not crooked, giving your cheque without proper Identity
verification of the related parties is fraught with risks.
You Could consider the following Precautions: -
* Check NRIC: Of the agent
* Check NRIC of the property owner - With documents showing he/she
is indeed the owner of the property.
* Check through the Option to Purchase agreement for unfavourable
terms. (These contracts are usually worded to favour the
agent/agency, but you can negotiate to CHANGE them)
* Make sure that the owner gives you a photo-stated NRIC together with
documents stating ownership, i.e. a Bank Loan statement showing
his/her name on the loan as owner.
* Make sure that the Option to Purchase is duly signed by the Property
owner and DATED (Don't leave the DATE empty).
* If you have to give a cheque, post date it by a few days, so in case you
want to change your mind, you can quickly stop payment.
Even all these won't stop a rogue agent or a rogue Homeowner selling his
home multiple times to multiple buyers, but at least you have a slightly better
level of protection. Because at least you are sure you are dealing with the
Property Owner.
www.PropertyBUYER.com.sg is a research focused Mortgage Advisory that do not emphasize cheap loans. We balance risks with savings based on the individual's financial situation to find the best fit Home Loan.
Not only that, we help to make sure of the following: -
* Buyer is buying at the right price (we check multiple valuations to give a safe price)
* Because all these work takes a lot of time, if you commit to get your loan through us, we can
help you to check recent transaction around that block, or the particular unit's transaction
and price history.
* We can check and verify PROPERTY Seller details.
* When bank's letter of offer is given, we can check to verify the contract
details and make sure that it is as agreed.
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
Contact us
http://www.propertybuyer.com.sg/contactus.php
Read More articles
http://www.propertyBUYER.com.sg/articlesnews.php
Understand Property Investing and Sub-prime
http://astore.amazon.com/httpwwwpro0ad-20?%5Fencoding=UTF8&node=55
Refinance and Mortgages DIY steps
http://www.squidoo.com/Singapore-homeloan
Courtesy of www.PropertyBUYER.com.sg
Contact them
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php
In an article by Straits Times, April 8, 2009.
"Eric Heng Jit Siang (left) conned 127 people, mainly foreigners and permanent residents...
Heng would pose as the owner of a property seeking to rent it out, milking the tenant for a deposit on the rent, and then pulling a disappearing act.
Using both landed properties and flats he had rented, the 33-year-old conned over $242,500 in rental deposits between last April and January out of 127 people.
The court heard that he rented 10 properties across Singapore, got hold of the keys and then placed advertisements in newspapers and in train stations seeking tenants.
When people responded to his advertisements, he posed as the owner of these properties and arranged to show them the units.
When the tenancy agreement was signed - and each unit was 'rented' out to more than one house-hunter - he collected money from each of them as a deposit on the rent or the utility bill."
(Source: The Straits Times, "http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_361167.html, Esther Tan")
HOW SOME SINGAPORE PROPERTY AGENTS BEHAVE
When you go to an agent, he/she brings you to see a property. He/she
always emphasize "Bring your cheque book". This is because in the heat of
the moment, sometimes you can get influenced into making a rash decision.
A rash decision is what an agent wants. Because no matter the house is
sold or not, he/she still gets his/her commission, while if you do not proceed,
you forfeit your Option to purchase deposit of 1% of the House price.
You can pay for a property that is NOT worth that much and eventually the
bank will not loan you the full amount you want to borrow or worse, you get
cheated.
Agents always tell you, it's best for them to negotiate on your behalf. Many times,
this is the worst scenario. We will talk about that in the next article.
PLACING AN OPTION TO PURCHASE
Usually the agent will ask you to place the cheque first for an amount.
But the agent did NOT get an agreement from the seller to sell at the
particular price. The agent will then use this cheque to dangle in front of the
seller inducing him/her to sell.
WHAT IS THE PROBLEM WITH GIVING A CHEQUE?
Usually, the agent will take your cheque without asking you to sign the
Option to purchase agreement.
There is No verification of who you are writing the cheque to.
If the property is $1m, 1% = $10,000.
Giving a cheque without proper verification is like passing someone your 1
CARAT Diamond ring without checking his identity.
In case the agent asks you to write to an "Imaginery owner" of the property
which is his/her friend, the agent can cash your cheque and run if he is
crooked.
Even if the agent is not crooked, giving your cheque without proper Identity
verification of the related parties is fraught with risks.
You Could consider the following Precautions: -
* Check NRIC: Of the agent
* Check NRIC of the property owner - With documents showing he/she
is indeed the owner of the property.
* Check through the Option to Purchase agreement for unfavourable
terms. (These contracts are usually worded to favour the
agent/agency, but you can negotiate to CHANGE them)
* Make sure that the owner gives you a photo-stated NRIC together with
documents stating ownership, i.e. a Bank Loan statement showing
his/her name on the loan as owner.
* Make sure that the Option to Purchase is duly signed by the Property
owner and DATED (Don't leave the DATE empty).
* If you have to give a cheque, post date it by a few days, so in case you
want to change your mind, you can quickly stop payment.
Even all these won't stop a rogue agent or a rogue Homeowner selling his
home multiple times to multiple buyers, but at least you have a slightly better
level of protection. Because at least you are sure you are dealing with the
Property Owner.
www.PropertyBUYER.com.sg is a research focused Mortgage Advisory that do not emphasize cheap loans. We balance risks with savings based on the individual's financial situation to find the best fit Home Loan.
Not only that, we help to make sure of the following: -
* Buyer is buying at the right price (we check multiple valuations to give a safe price)
* Because all these work takes a lot of time, if you commit to get your loan through us, we can
help you to check recent transaction around that block, or the particular unit's transaction
and price history.
* We can check and verify PROPERTY Seller details.
* When bank's letter of offer is given, we can check to verify the contract
details and make sure that it is as agreed.
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
Contact us
http://www.propertybuyer.com.sg/contactus.php
Read More articles
http://www.propertyBUYER.com.sg/articlesnews.php
Understand Property Investing and Sub-prime
http://astore.amazon.com/httpwwwpro0ad-20?%5Fencoding=UTF8&node=55
Refinance and Mortgages DIY steps
http://www.squidoo.com/Singapore-homeloan
Monday, April 20, 2009
Singapore Property Investor: Is the US recovering in Q3, 2009?
Is the recovery going to be V-shape, U-shape or L-shape?
Some leading indicators are looking positive. If property investors can time it right, they can easily become richer. The doom and gloom is affecting judgement, but these are very real fears. Even the very rich are getting burnt or feeling the uncertain sentiment.
According to www.PropertyBuyer.com.sg, there has been increased House Hunting and Mortgage Refinancing activities. Many of these are from people who already own 2 to 3 properties. So there is indeed some cash flushed buyers out there shopping for good value deals.
Contact them: -
http://www.PropertyBUYER.com.sg/contactus.php
Email them: loans@propertybuyer.com.sg
Monday, April 13, 2009
Singapore Refinance Home Loan: CPF Limits your Borrowing
Singapore Home Loan Refinancing and Mortgage: CPF limits your borrowing
Contributed by: www.PropertyBUYER.com.sg
Tel: 6100 - 0608 sms: 9782 - 8606
http://www.propertybuyer.com.sg/contactus.php
Singapore Refinance Home Loans and Mortgage: CPF limits your borrowing
How CPF can seriously limit your cash flow! Most people forget that after all these years, CPF is still king. When you sell your
place, you think you have cash, only to have the large part of your money being returned to your CPF account. You end up
"RICH" in your CPF account, but you can't use that money.
Even if you want to obtain a Term Loan "CASH OUT" from your house/Property, CPF can also severely limit the amount you will
get.
Here is an illustration on TERM LOAN - also known as "CASH OUT"
Property valuation = $1m
Loan outstanding = $200,000
In this case, the bank can usually lend you up to 80% of your valuation, that means $800,000.
So the term loan (Cash out) is = $800,000 - $200,000 = $600,000
That means the bank will lend you $600,000 of cash as Term Loan while
taking over your outstanding loan of $200k, right?
Yes, this is right if you have not used a single cent of CPF in paying for this
property.
Just as another illustration of if CPF was used: -
Property valuation = $1m
Loan outstanding = $200,000
CPF property withdrawal = $300,000
At 80%, the bank can lend you up to $800,000. After deducting the outstanding loan, they can still lend you $600,000. But
they will consider the CPF draw down.
The term loan (CASH out) obtainable = $800,000 - $200,000 (loan outstanding) - 300k (CPF accrued usage) = $300,000
The Term loan is only $300,000
So although it may seem that there is substantial equity in the property. In fact, the amount that can be borrowed is not that
much.
SOME GET CAUGHT OUT
Some home owners who initially thought they could build/ A&A or re-construct a home suddenly find themselves short of
money and go into hardship after CPF comes into the picture.
So do take note of this. It can be easy to forget about this part of the calculation.
ABOUT US Contact us
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
Contact them
http://www.propertybuyer.com.sg/contactus.php
Read More of their articles
http://www.propertyBUYER.com.sg/articlesnews.php
Understand Property Investing and Sub-prime
http://astore.amazon.com/httpwwwpro0ad-20?%5Fencoding=UTF8&node=55
Refinance and Mortgages DIY steps
http://www.squidoo.com/Singapore-homeloan
Contributed by: www.PropertyBUYER.com.sg
Tel: 6100 - 0608 sms: 9782 - 8606
http://www.propertybuyer.com.sg/contactus.php
Singapore Refinance Home Loans and Mortgage: CPF limits your borrowing
How CPF can seriously limit your cash flow! Most people forget that after all these years, CPF is still king. When you sell your
place, you think you have cash, only to have the large part of your money being returned to your CPF account. You end up
"RICH" in your CPF account, but you can't use that money.
Even if you want to obtain a Term Loan "CASH OUT" from your house/Property, CPF can also severely limit the amount you will
get.
Here is an illustration on TERM LOAN - also known as "CASH OUT"
Property valuation = $1m
Loan outstanding = $200,000
In this case, the bank can usually lend you up to 80% of your valuation, that means $800,000.
So the term loan (Cash out) is = $800,000 - $200,000 = $600,000
That means the bank will lend you $600,000 of cash as Term Loan while
taking over your outstanding loan of $200k, right?
Yes, this is right if you have not used a single cent of CPF in paying for this
property.
Just as another illustration of if CPF was used: -
Property valuation = $1m
Loan outstanding = $200,000
CPF property withdrawal = $300,000
At 80%, the bank can lend you up to $800,000. After deducting the outstanding loan, they can still lend you $600,000. But
they will consider the CPF draw down.
The term loan (CASH out) obtainable = $800,000 - $200,000 (loan outstanding) - 300k (CPF accrued usage) = $300,000
The Term loan is only $300,000
So although it may seem that there is substantial equity in the property. In fact, the amount that can be borrowed is not that
much.
SOME GET CAUGHT OUT
Some home owners who initially thought they could build/ A&A or re-construct a home suddenly find themselves short of
money and go into hardship after CPF comes into the picture.
So do take note of this. It can be easy to forget about this part of the calculation.
ABOUT US Contact us
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
Contact them
http://www.propertybuyer.com.sg/contactus.php
Read More of their articles
http://www.propertyBUYER.com.sg/articlesnews.php
Understand Property Investing and Sub-prime
http://astore.amazon.com/httpwwwpro0ad-20?%5Fencoding=UTF8&node=55
Refinance and Mortgages DIY steps
http://www.squidoo.com/Singapore-homeloan
Friday, April 3, 2009
Elevated Risks for Uncompleted under-construction Pre-TOP Properties
Singapore Mortgage and Home Loan: Elevated Risk for Uncompleted pre-TOP Properties
Elevated Risk for yet to be complete Pre-top properties.
Courtesy of www.PropertyBUYER.com.sg
Contact them
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php
Financial Institution reduces loan quantum for Rivergate Condominium
Singapore
There is now elevated risks for home owners with building under construction (pre-top)
properties. Some of these properties were sold during the boom time in
2006 and 2007 with TOP in 2009, 2010 and beyond. Valuations have
dropped, some heartless financial institutions do not stand behind their
home owner.
Rivergate Condo owner gets "betrayed" by Financial institution.
Someone who has bought a Rivergate Condominium unit during the launch
around 2007. He told us he bought it for $2000 per square feet for a property
of 2025 sq feet. The price bought was $4 million dollars.
At that time, he arranged financing for 80% of $4 million from a financial
institution (which we shall not name, there are more than 1). The loan size at full
disbursement is $3.2 million dollars.
Recently, just 3 days prior to the TOP, the financial institution sent valuers to
re-value the place. They arrived at a figure of $1200 per square feet. This
valued the property at $2.4 million. A 80% loan to valuation equals $1.92
million. From a loan size of $3.2 million to $1.92!!!
This leaves the home owner short of $1.28 million dollars!!!
He has to let go of the property at fire sale prices or work out a plan with the
developer. The consequences are dire. A few more such cases can
really sink an already weak economy. Yet another bad example of
pro-cyclical behaviour.
Financial institutions have every right in their legal contract to exercise this
adjustment in loan size. However such a scenario was never fully explained
by the bankers on lending him the money.
The owner has a choice, forfeit all the proceeds paid up till this point or work
out a mutually acceptable plan with the developer. But the consequences
are dire as the properties may be dumped into the market with few buyers
depressing the prices for all properties, which in turn lead to more financial
institutions pulling the plug on borrowers.
Our question has always been, why lend in the first place and then to pull it
back at the very last moment?
This is another example of pro-cyclical behaviour that typically makes a
recession worse or a boom time bubble bigger than it is. This totally
destroyed that person's wealth as there is no way he could have come up
with $1.28 million in 3 days and he may have to dump his assets cheaply.
Opinions
There is now an elevated risk of buying new launches of uncompleted and
yet to be TOP properties. Home buyers who commit to pre-top and
uncompleted properties with completion dates in 2009, 2010 and perhaps
even 2011 is likely to be exposed to risks whereby the financial institution(s)
reduce the loan size at their whims and fancy. Do think twice.
contact them at:
loans@propertybuyer.com.sg
Elevated Risk for yet to be complete Pre-top properties.
Courtesy of www.PropertyBUYER.com.sg
Contact them
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php
Financial Institution reduces loan quantum for Rivergate Condominium
Singapore
There is now elevated risks for home owners with building under construction (pre-top)
properties. Some of these properties were sold during the boom time in
2006 and 2007 with TOP in 2009, 2010 and beyond. Valuations have
dropped, some heartless financial institutions do not stand behind their
home owner.
Rivergate Condo owner gets "betrayed" by Financial institution.
Someone who has bought a Rivergate Condominium unit during the launch
around 2007. He told us he bought it for $2000 per square feet for a property
of 2025 sq feet. The price bought was $4 million dollars.
At that time, he arranged financing for 80% of $4 million from a financial
institution (which we shall not name, there are more than 1). The loan size at full
disbursement is $3.2 million dollars.
Recently, just 3 days prior to the TOP, the financial institution sent valuers to
re-value the place. They arrived at a figure of $1200 per square feet. This
valued the property at $2.4 million. A 80% loan to valuation equals $1.92
million. From a loan size of $3.2 million to $1.92!!!
This leaves the home owner short of $1.28 million dollars!!!
He has to let go of the property at fire sale prices or work out a plan with the
developer. The consequences are dire. A few more such cases can
really sink an already weak economy. Yet another bad example of
pro-cyclical behaviour.
Financial institutions have every right in their legal contract to exercise this
adjustment in loan size. However such a scenario was never fully explained
by the bankers on lending him the money.
The owner has a choice, forfeit all the proceeds paid up till this point or work
out a mutually acceptable plan with the developer. But the consequences
are dire as the properties may be dumped into the market with few buyers
depressing the prices for all properties, which in turn lead to more financial
institutions pulling the plug on borrowers.
Our question has always been, why lend in the first place and then to pull it
back at the very last moment?
This is another example of pro-cyclical behaviour that typically makes a
recession worse or a boom time bubble bigger than it is. This totally
destroyed that person's wealth as there is no way he could have come up
with $1.28 million in 3 days and he may have to dump his assets cheaply.
Opinions
There is now an elevated risk of buying new launches of uncompleted and
yet to be TOP properties. Home buyers who commit to pre-top and
uncompleted properties with completion dates in 2009, 2010 and perhaps
even 2011 is likely to be exposed to risks whereby the financial institution(s)
reduce the loan size at their whims and fancy. Do think twice.
contact them at:
loans@propertybuyer.com.sg
Tuesday, March 17, 2009
Singapore Home Loan and Car Home: An Anomaly (Something not quite right)
Article contributed by www.PropertyBUYER.com.sg
HOUSING LOAN
Many banks have cut back on home loan lending. Even the lending Loan to valuation ratio has been reduced from 80% to 70% in some cases.
We all know that Free-Hold or 999 lease hold land appreciates over the longer term of 10 years or 20 years cycle. This coincides with the loan tenure of typically 20 to 30 years cycle. In other words, lending money to individuals for property purchases for first homes are actually very safe banking activities as the land or property is used as collateral not only keeps it's value, but appreciates over the longer time horizon.
There are some 270,000 private houses and condominiums in Singapore. Assuming 10% of households are in negative equity, that is 27,000 units.
And assuming that those 27,000 are in negative equity to the tune of 10%. Assume that their loan size is $500,000. 10% of $500,000 is $50,000 per household. Even if we assume all of these households default on their repayment, we are talking about: -
$50,000 x 27,000 units of housing = $1.35 Billion of losses for banks.
100% CAR LOANS
Since a few years ago, we have seen MAS relaxing rules on banks for Car loan lending. Banks started to lend out 100% for car loans.
Almost everyone knows that except in rare circumstances, most cars are depreciating assets.
If a car of $110,000 price has a scrap value of $10,000. In Singapore cars have a life span of 10 years. This means the depreciation is $10,000 a year. But we all know that cars have steeper depreciation in the earlier years.
So let's say: -
Year 1 - Depreciation = $15,000
Year 2 - Depreciation = $15,000
Year 3 - Depreciation = $13,000
Year 4 - Depreciation = $12,000
Year 5 - Depreciation = $10,000
By the end of each year, the car is worth: -
year 1 - Value of car = $110,000 - $15,000 = $95,000
year 2 - Value of car = $80,000
Year 3 - Value of car = $67,000
Year 4 - Value of car = $55,000
Year 5 - Value of car = $45,000
Assuming that the car's values fall linearly and assuming that the car owner pays up linearly over the course of the 10 years. I.e. $110,000/10 = $11,000 of repayment every year in principle.
Year 1 - Amount owed = $110,000 - $11,000 = $99,000
Year 2 - Amount owed = $99,000 - $11,000 = $88,000
Year 3 - Amount owed = $88,000 - $11,000 = $77,000
Year 4 - Amount owed = $77,000 - $11,000 = $66,000
Year 5 - Amount owed = $66,000 - $11,000 = $55,000
What this means is that, in the case of default (i.e. person stops paying for his installment), in Year 1, bank is owed $99k while car is worth $95k.
Negative Equity in Car loan
Year 1 - Amount owed - Value of car = $99,000 - $95,000 = $4,000
year 2 = $88,000 - $80,000 = $8,000
year 3 = $77,000 - $67,000 = $10,000
Year 4 = $66,000 - $55,000 = $11,000
Year 5 = $55,000 - $45,000 = $10,000
What this means is, the bank stands to lose $4,000 to $11,000 in each of these car loans if the loans are not recoverable from the car owner.
There were some 3,000 COEs (Certificates of entitlement per month) therefore about 30,000 cars sold each year, imagine if 50% of these cars sold were through 100% loans.
And Imagine if 20% of these people default on their loans.
That is 15,000 cars x 20% = 3,000 car loans in trouble. Let's assume the average car loan size $50,000, that is $150,000,000 (of 150million of problem for the banks). Since 100% car loan financing has been around for roughly 3 years. A rough estimate of that would be $0.5 Billion of problems which will hit the bank's bottom line.
WHY HOME LOAN is 90% Maximum (Most banks lend only 80% now) and Car Loan is 100%
Car loans is a small magnitude problem of $0.5 billion of potential losses versus that of housing loan of $1.35 billion of potential losses. Both are easily absorbed by the banks which are operationally profitable.
However, we do feel that Car loans is another problem that will blow up should the economy head further south.
It is a small magnitude problem comparatively with car loans no doubt, but still I do not see the logic of such risk taking behaviour by the banks by giving 100% car loans.
If banks are going to lend 100% for cars in which their collateral is suspect, why not lend 90%, 95% or 100% for Houses?
Nevermind short term house price volatility, because on a longer term, property value tends to go up. Banks will tend to have better Collateral that backs the money they lent out.
Now you see where this logic goes?
Banks charter is to make money.
Banks executives are compensated on profitability of banks, not on risk management.
(No one will pad the CEO on the shoulder for having the safest rating, but making just a bit of money)
Banks, like all organizations are run by people. If there are no rules, human behaviour dictates that banks may take excessive risks just like any organizations would, when they are allowed to do so in order to achieve a reward for meeting objectives or avoid NOT meeting objectives and getting fired or demoted.
This calls for a back-to-basic ground rule and a return to some kind of a keynesian economics whereby some regulatory control are essential.
Milton Friedman's Free Market only works within a certain range, at the extreme end of tight credit squeeze or excessive credit, Free market mechanism breaks down and industries are permanently damaged and do not bounce back in years leading to massive unemployment.
They can be reached at: -
http://www.propertybuyer.com.sg/contactus.php
HOUSING LOAN
Many banks have cut back on home loan lending. Even the lending Loan to valuation ratio has been reduced from 80% to 70% in some cases.
We all know that Free-Hold or 999 lease hold land appreciates over the longer term of 10 years or 20 years cycle. This coincides with the loan tenure of typically 20 to 30 years cycle. In other words, lending money to individuals for property purchases for first homes are actually very safe banking activities as the land or property is used as collateral not only keeps it's value, but appreciates over the longer time horizon.
There are some 270,000 private houses and condominiums in Singapore. Assuming 10% of households are in negative equity, that is 27,000 units.
And assuming that those 27,000 are in negative equity to the tune of 10%. Assume that their loan size is $500,000. 10% of $500,000 is $50,000 per household. Even if we assume all of these households default on their repayment, we are talking about: -
$50,000 x 27,000 units of housing = $1.35 Billion of losses for banks.
100% CAR LOANS
Since a few years ago, we have seen MAS relaxing rules on banks for Car loan lending. Banks started to lend out 100% for car loans.
Almost everyone knows that except in rare circumstances, most cars are depreciating assets.
If a car of $110,000 price has a scrap value of $10,000. In Singapore cars have a life span of 10 years. This means the depreciation is $10,000 a year. But we all know that cars have steeper depreciation in the earlier years.
So let's say: -
Year 1 - Depreciation = $15,000
Year 2 - Depreciation = $15,000
Year 3 - Depreciation = $13,000
Year 4 - Depreciation = $12,000
Year 5 - Depreciation = $10,000
By the end of each year, the car is worth: -
year 1 - Value of car = $110,000 - $15,000 = $95,000
year 2 - Value of car = $80,000
Year 3 - Value of car = $67,000
Year 4 - Value of car = $55,000
Year 5 - Value of car = $45,000
Assuming that the car's values fall linearly and assuming that the car owner pays up linearly over the course of the 10 years. I.e. $110,000/10 = $11,000 of repayment every year in principle.
Year 1 - Amount owed = $110,000 - $11,000 = $99,000
Year 2 - Amount owed = $99,000 - $11,000 = $88,000
Year 3 - Amount owed = $88,000 - $11,000 = $77,000
Year 4 - Amount owed = $77,000 - $11,000 = $66,000
Year 5 - Amount owed = $66,000 - $11,000 = $55,000
What this means is that, in the case of default (i.e. person stops paying for his installment), in Year 1, bank is owed $99k while car is worth $95k.
Negative Equity in Car loan
Year 1 - Amount owed - Value of car = $99,000 - $95,000 = $4,000
year 2 = $88,000 - $80,000 = $8,000
year 3 = $77,000 - $67,000 = $10,000
Year 4 = $66,000 - $55,000 = $11,000
Year 5 = $55,000 - $45,000 = $10,000
What this means is, the bank stands to lose $4,000 to $11,000 in each of these car loans if the loans are not recoverable from the car owner.
There were some 3,000 COEs (Certificates of entitlement per month) therefore about 30,000 cars sold each year, imagine if 50% of these cars sold were through 100% loans.
And Imagine if 20% of these people default on their loans.
That is 15,000 cars x 20% = 3,000 car loans in trouble. Let's assume the average car loan size $50,000, that is $150,000,000 (of 150million of problem for the banks). Since 100% car loan financing has been around for roughly 3 years. A rough estimate of that would be $0.5 Billion of problems which will hit the bank's bottom line.
WHY HOME LOAN is 90% Maximum (Most banks lend only 80% now) and Car Loan is 100%
Car loans is a small magnitude problem of $0.5 billion of potential losses versus that of housing loan of $1.35 billion of potential losses. Both are easily absorbed by the banks which are operationally profitable.
However, we do feel that Car loans is another problem that will blow up should the economy head further south.
It is a small magnitude problem comparatively with car loans no doubt, but still I do not see the logic of such risk taking behaviour by the banks by giving 100% car loans.
If banks are going to lend 100% for cars in which their collateral is suspect, why not lend 90%, 95% or 100% for Houses?
Nevermind short term house price volatility, because on a longer term, property value tends to go up. Banks will tend to have better Collateral that backs the money they lent out.
Now you see where this logic goes?
Banks charter is to make money.
Banks executives are compensated on profitability of banks, not on risk management.
(No one will pad the CEO on the shoulder for having the safest rating, but making just a bit of money)
Banks, like all organizations are run by people. If there are no rules, human behaviour dictates that banks may take excessive risks just like any organizations would, when they are allowed to do so in order to achieve a reward for meeting objectives or avoid NOT meeting objectives and getting fired or demoted.
This calls for a back-to-basic ground rule and a return to some kind of a keynesian economics whereby some regulatory control are essential.
Milton Friedman's Free Market only works within a certain range, at the extreme end of tight credit squeeze or excessive credit, Free market mechanism breaks down and industries are permanently damaged and do not bounce back in years leading to massive unemployment.
They can be reached at: -
http://www.propertybuyer.com.sg/contactus.php
Sunday, March 8, 2009
Singapore Home Loan: Indonesia Interest Rates
Singapore Home Loan and Refinance
Indonesia has further dropped interest rates to stimulate their domestic economy.
Indonesia has further dropped interest rates to stimulate their domestic economy.
Singapore Home Loan: Global Finance world's 50 Safest Banks? Oh really?
Article contributed by www.PropertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php
READ ARTICLE
GLOBAL FINANCE WORLD's 50 SAFEST BANKS, REALLY???
1. KfW
(Germany)
2. Caisse des Depots et Consignations (CDC)
(France)
3. Bank Nederlands Gemeenten (BNG)
(Netherlands)
4. Landwirtschaftliche Rentenbank
(Germany)
5. Rabobank
(Netherlands)
6. Landeskreditbank Baden-Wuerttemberg-
Foerderbank
(Germany)
7. NRW. Bank
(Germany)
8. BNP Paribas
(France)
9. Banco Santander
(Spain)
10. Royal Bank of Canada
(Canada)
11. National Australia Bank
(Australia)
12. Commonwealth Bank of Australia
(Australia)
13. Banco Bilbao Vizcaya Argentaria (BBVA)
(Spain)
14. Toronto-Dominion Bank
(Canada)
15. Australia & New Zealand Banking Group
(Australia)
16. Westpac Banking Corporation
(Australia)
17. Banco Espanol de Credito S.A. (Banesto)
(Spain)
18. ASB Bank Limited
(New Zealand)
19. HSBC
(United Kingdom)
20. Credit Agricole
(France)
21. Wells Fargo
(United States)
22. Nordea Bank
(Sweden)
23. Scotiabank
(Canada)
24. La Caixa
(Spain)
25. Svenska Handelsbanken
(Sweden)
26. US Bancorp
(United States)
27. Banco Popular Espanol
(Spain)
28. DBS Bank
(Singapore)
29. Pohjola Bank
(Finland)
30. Deutsche Bank
(Germany)
31. Société Générale
(France)
32. Intesa Sanpaolo
(Italy)
33. Bank of Montreal
(Canada)
34. DnB NOR Bank
(Norway)
35. The Bank of New York Mellon
(United States)
36. Caixa Geral de Depositos
(Portugal)
37. United Overseas Bank
(Singapore)
38. OCBC
(Singapore)
39. Axa Bank Europe
(Belgium)
40. Credit Suisse Group
(Switzerland)
41. Landesbank Baden-Wuerttemberg
(Germany)
42. Nationwide Building Society
(United Kingdom)
43. CIBC
(Canada)
44. National Bank Of Kuwait
(Kuwait)
45. Barclays
(United Kingdom)
46. UBS
(Switzerland)
47. JPMorgan Chase
(United States)
48. Bank of Tokyo-Mitsubishi UFJ
(Japan)
49. Banque Federative du Credit Mutuel (BFCM)
(France)
50. Credit Industriel et Commercial (CIC)
(France)
Global Finance magazine February 25, 2009
OH REALLY?
Here are the list of the world's 50 Safest banks. However, we would take it
with a pinch of salt as many of the same rating agencies did not spot the
problem with sub-prime mortgages and Collaterized Debt Obligations
(CDO).
OUR DOUBTS
We have doubts as to how much ability the rating agencies have with
regards to estimating off balance sheet risks.
We also have doubts as to how much ability the rating agencies has, to assess
the exposure of each one of the complicated derivatives that each bank
holds and it's liabilities and valuation, as the trading volume is so thin,
derivatives are mostly mark to model. But in times of credit crisis, the
derivatives can be useless and worthless if it is mark-to-market. That could
mean that banks who dabble in derivatives are technically insolvent if they
are Marked-to-market.
CONSOLATION PRIZE
The only consolation we have is, the world's leaders are sitting up and
nobody wants another bank to fail. Many banks who take excessive risks,
will be nationalized, the shareholders will be punished for their faith in the
banks.
CLAW BACK THE BONUSES OF GREEDY BANKERS
Previous CEOs of banks will get away with all the big fat bonuses for taking
the excessive risks and bring the banks to their knees for their greed.
We strongly feel that banks who are currently in trouble, there is a record to
trace back to the time when they first take excessive risks. Executives who
received big fat bonuses and share option plans, should be liable to repay
most of their bonuses. They should not be let off easily.
We quote a section from NYT
"
Arthur Levitt, the former chairman of the Securities and Exchange
Commission, charges that “the credit-rating agencies suffer from a conflict of
interest — perceived and apparent — that may have distorted their
judgment, especially when it came to complex structured financial products.”
Frank Partnoy, a professor at the University of San Diego School of Law
who has written extensively about the credit-rating industry, says that the
conflict is a serious problem. Thanks to the industry’s close relationship with
the banks whose securities it rates, Partnoy says, the agencies have
behaved less like gatekeepers than gate openers. Last year, Moody’s had to
downgrade more than 5,000 mortgage securities — a tacit acknowledgment
that the mortgage bubble was abetted by its overly generous ratings.
Mortgage securities rated by Standard & Poor’s and Fitch have suffered a
similar wave of downgrades."
We are independent mortgage consultants for home loans in Singapore.
Property Agents tell you that it is a Valuable Buy
Sometimes some property agents tell the buyers that a property is worth it
and they have good bankers that can get a bank approved, do you really
think that it is really worth it?
Sometimes it's true, other times, it simply means, "Quickly buy so that I can
get my commission".
Property Agents specialized in Properties, we specialized in Home Loans.
At www.PropertyBUYER.com.sg, we don't rush you and we have no conflict
of interests with buying or selling properties. We will handle all the
paperwork for you and compare the various packages. Most important of all,
we never emphasize cheap rates or cheap loans. We first evaluate your
personal and family financial situation and then evaluate the risk versus
rewards of each possible choice.
http://www.propertybuyer.com.sg/contactus.php
READ ARTICLE
GLOBAL FINANCE WORLD's 50 SAFEST BANKS, REALLY???
1. KfW
(Germany)
2. Caisse des Depots et Consignations (CDC)
(France)
3. Bank Nederlands Gemeenten (BNG)
(Netherlands)
4. Landwirtschaftliche Rentenbank
(Germany)
5. Rabobank
(Netherlands)
6. Landeskreditbank Baden-Wuerttemberg-
Foerderbank
(Germany)
7. NRW. Bank
(Germany)
8. BNP Paribas
(France)
9. Banco Santander
(Spain)
10. Royal Bank of Canada
(Canada)
11. National Australia Bank
(Australia)
12. Commonwealth Bank of Australia
(Australia)
13. Banco Bilbao Vizcaya Argentaria (BBVA)
(Spain)
14. Toronto-Dominion Bank
(Canada)
15. Australia & New Zealand Banking Group
(Australia)
16. Westpac Banking Corporation
(Australia)
17. Banco Espanol de Credito S.A. (Banesto)
(Spain)
18. ASB Bank Limited
(New Zealand)
19. HSBC
(United Kingdom)
20. Credit Agricole
(France)
21. Wells Fargo
(United States)
22. Nordea Bank
(Sweden)
23. Scotiabank
(Canada)
24. La Caixa
(Spain)
25. Svenska Handelsbanken
(Sweden)
26. US Bancorp
(United States)
27. Banco Popular Espanol
(Spain)
28. DBS Bank
(Singapore)
29. Pohjola Bank
(Finland)
30. Deutsche Bank
(Germany)
31. Société Générale
(France)
32. Intesa Sanpaolo
(Italy)
33. Bank of Montreal
(Canada)
34. DnB NOR Bank
(Norway)
35. The Bank of New York Mellon
(United States)
36. Caixa Geral de Depositos
(Portugal)
37. United Overseas Bank
(Singapore)
38. OCBC
(Singapore)
39. Axa Bank Europe
(Belgium)
40. Credit Suisse Group
(Switzerland)
41. Landesbank Baden-Wuerttemberg
(Germany)
42. Nationwide Building Society
(United Kingdom)
43. CIBC
(Canada)
44. National Bank Of Kuwait
(Kuwait)
45. Barclays
(United Kingdom)
46. UBS
(Switzerland)
47. JPMorgan Chase
(United States)
48. Bank of Tokyo-Mitsubishi UFJ
(Japan)
49. Banque Federative du Credit Mutuel (BFCM)
(France)
50. Credit Industriel et Commercial (CIC)
(France)
Global Finance magazine February 25, 2009
OH REALLY?
Here are the list of the world's 50 Safest banks. However, we would take it
with a pinch of salt as many of the same rating agencies did not spot the
problem with sub-prime mortgages and Collaterized Debt Obligations
(CDO).
OUR DOUBTS
We have doubts as to how much ability the rating agencies have with
regards to estimating off balance sheet risks.
We also have doubts as to how much ability the rating agencies has, to assess
the exposure of each one of the complicated derivatives that each bank
holds and it's liabilities and valuation, as the trading volume is so thin,
derivatives are mostly mark to model. But in times of credit crisis, the
derivatives can be useless and worthless if it is mark-to-market. That could
mean that banks who dabble in derivatives are technically insolvent if they
are Marked-to-market.
CONSOLATION PRIZE
The only consolation we have is, the world's leaders are sitting up and
nobody wants another bank to fail. Many banks who take excessive risks,
will be nationalized, the shareholders will be punished for their faith in the
banks.
CLAW BACK THE BONUSES OF GREEDY BANKERS
Previous CEOs of banks will get away with all the big fat bonuses for taking
the excessive risks and bring the banks to their knees for their greed.
We strongly feel that banks who are currently in trouble, there is a record to
trace back to the time when they first take excessive risks. Executives who
received big fat bonuses and share option plans, should be liable to repay
most of their bonuses. They should not be let off easily.
We quote a section from NYT
"
Arthur Levitt, the former chairman of the Securities and Exchange
Commission, charges that “the credit-rating agencies suffer from a conflict of
interest — perceived and apparent — that may have distorted their
judgment, especially when it came to complex structured financial products.”
Frank Partnoy, a professor at the University of San Diego School of Law
who has written extensively about the credit-rating industry, says that the
conflict is a serious problem. Thanks to the industry’s close relationship with
the banks whose securities it rates, Partnoy says, the agencies have
behaved less like gatekeepers than gate openers. Last year, Moody’s had to
downgrade more than 5,000 mortgage securities — a tacit acknowledgment
that the mortgage bubble was abetted by its overly generous ratings.
Mortgage securities rated by Standard & Poor’s and Fitch have suffered a
similar wave of downgrades."
We are independent mortgage consultants for home loans in Singapore.
Property Agents tell you that it is a Valuable Buy
Sometimes some property agents tell the buyers that a property is worth it
and they have good bankers that can get a bank approved, do you really
think that it is really worth it?
Sometimes it's true, other times, it simply means, "Quickly buy so that I can
get my commission".
Property Agents specialized in Properties, we specialized in Home Loans.
At www.PropertyBUYER.com.sg, we don't rush you and we have no conflict
of interests with buying or selling properties. We will handle all the
paperwork for you and compare the various packages. Most important of all,
we never emphasize cheap rates or cheap loans. We first evaluate your
personal and family financial situation and then evaluate the risk versus
rewards of each possible choice.
Saturday, February 28, 2009
Singapore Mortgage: High Pay attracts the BEST bankers or the greediest?
Will high pay attract the best or the greediest bankers?
Article contributed by: http://www.PropertyBuyer.com.sg
Contact them at: -
http://www.PropertyBUYER.com.sg/contactus.php
Throughout the world, bankers are paid huge salaries. No doubt the
organisations are huge, therefore in order to manage organisations of such
enormous size, you will need someone of enormous talent.
For such enormous talent, you will then have to pay millions, even hundreds
of millions. This is true even for national banks or quasi-national banks.
Does this Logic hold water?
We think that the relationship between bigger organisations and pay is not
linear. Managing a 1 man company requires not so much skills as opposed
to managing a team of 300 people. But between managing 300 people and
3000 people, there is yet again a skill pre-requisite.
However from managing a team of 3,000 people to 30,000 the incremental
skills required for that may be marginal. As a result the salaries increase for
that types of roles should also consequently be marginally higher, not that
much more.
Why the logic doesn't hold water, If you extend this logic more, then the US
president which presides over a USD$ 14 Trillion economy and 300 million
inhabitants should perhaps demand US$ 500 billion in annual salary.
Even using Singapore's Char Kway Teow analogy, where it is claimed that
it's only $2 a person a year for good leadership (Just the cost of Char Kwya
Teow), that means that we should pay the US president $600 million or (0.6
billion dollars).
Greed takes Over
When some companies are obviously better off being split into smaller and
nimbler companies when they grow too big. Instead the management
insisted that they are better off being the big organisations that they are.
However way they structured it or argued, the logic is tenuous.
Because the organisation is so big, this necessarily entails a very HIGH pay
for the top few layers of management. The argument is often that these are
talented people and they manage such a big team.
In fact the executive's time is same as everyone else, just 24 hours a day.
No matter how capable he or she is, he/she doesn't do the actual work. He/she has
someone reporting to him/her to carry out the work, while he/she sets the direction. Because the business is so big and
contains some many business units and divisions whose head of Business Units are already setting the strategy and directions,
so we don't see why there should be someone sitting yet on top.
BANKS and their SHARE OPTIONS
We cannot really blame the bankers, the system encourages greed. With
employee share option schemes, it encourages executives to BOOST
earnings.
The boosting of earnings can come in many ways.
1) Real earnings through best practices and ethic businesses practices.
2) Real earnings through taking excessive risks on behalf of the banks. (If
the risk pays off, the bankers get a big PAY cheque)
3) Create accounting profits, that are nonetheless legal, but will need to be
write down or accounted for in later periods.
4) Create outright fraud.
Now, because the regulatory oversight has failed in the USA, banks have
largely become "Bankrupt" and that has deprived many home owners and
businesses from credit (i.e. funds and borrowings).
We strongly condemn such activities, but these are systematic failures in the
systems. Checks and balances has also failed in the US with the republican
lobbying for more tax-cuts on behalf of big and profitable businesses and a
FREE Market knows best logic. That has obviously not worked.
We are hopeful that President's Obama stimulus package will clean up this
mess. But we are not happy that the package was watered down by
including tax-cuts in the package as a result of concessions to the
Republicans, that means that actual package is smaller than it is actually
stated. Tax cuts does not immediately create employment and the logic of a
trickle down economy has been given 8 years of trial and failed.
What does this do for Singapore Mortgages?
Singapore banks have also started to invest for higher returns and some of
them got caught out by Lehman brothers and others. Most of Singapore's
properties are backed by CPF and are by and large more resilient to
sub-prime mortgages. But Singapore's banks are not immune to global trade
and credit tightness. Singapore has a high number of expatriate workforce
and is highly dependent on external trade, And as a result, credit has also
dried up. Many Singapore home loans and home owners are faced with
banks becoming more and more stringent in lending out money.
If you have a home loan in Singapore and are considering to REFINANCE
or are thinking of getting one, we are a research focused mortgage advisory,
our service is free to you because the bank pays us separately.
AMAZON Property and Finance Books
READ FULL ARTICLE at: -
http://www.propertybuyer.com.sg/viewnews.php?article=78
Read more of their articles: -
http://www.propertybuyer.com.sg/articlesnews.php
PM Lee's Call to Foreign Banks to take long term view
The Expatriate population wild card - Could cause your property prices to swing wildly.
Don't believe in Good Debt Bad Debt as 100% gospel
Learn how your Property can have Perpetual Option value
Article contributed by: http://www.PropertyBuyer.com.sg
Contact them at: -
http://www.PropertyBUYER.com.sg/contactus.php
Throughout the world, bankers are paid huge salaries. No doubt the
organisations are huge, therefore in order to manage organisations of such
enormous size, you will need someone of enormous talent.
For such enormous talent, you will then have to pay millions, even hundreds
of millions. This is true even for national banks or quasi-national banks.
Does this Logic hold water?
We think that the relationship between bigger organisations and pay is not
linear. Managing a 1 man company requires not so much skills as opposed
to managing a team of 300 people. But between managing 300 people and
3000 people, there is yet again a skill pre-requisite.
However from managing a team of 3,000 people to 30,000 the incremental
skills required for that may be marginal. As a result the salaries increase for
that types of roles should also consequently be marginally higher, not that
much more.
Why the logic doesn't hold water, If you extend this logic more, then the US
president which presides over a USD$ 14 Trillion economy and 300 million
inhabitants should perhaps demand US$ 500 billion in annual salary.
Even using Singapore's Char Kway Teow analogy, where it is claimed that
it's only $2 a person a year for good leadership (Just the cost of Char Kwya
Teow), that means that we should pay the US president $600 million or (0.6
billion dollars).
Greed takes Over
When some companies are obviously better off being split into smaller and
nimbler companies when they grow too big. Instead the management
insisted that they are better off being the big organisations that they are.
However way they structured it or argued, the logic is tenuous.
Because the organisation is so big, this necessarily entails a very HIGH pay
for the top few layers of management. The argument is often that these are
talented people and they manage such a big team.
In fact the executive's time is same as everyone else, just 24 hours a day.
No matter how capable he or she is, he/she doesn't do the actual work. He/she has
someone reporting to him/her to carry out the work, while he/she sets the direction. Because the business is so big and
contains some many business units and divisions whose head of Business Units are already setting the strategy and directions,
so we don't see why there should be someone sitting yet on top.
BANKS and their SHARE OPTIONS
We cannot really blame the bankers, the system encourages greed. With
employee share option schemes, it encourages executives to BOOST
earnings.
The boosting of earnings can come in many ways.
1) Real earnings through best practices and ethic businesses practices.
2) Real earnings through taking excessive risks on behalf of the banks. (If
the risk pays off, the bankers get a big PAY cheque)
3) Create accounting profits, that are nonetheless legal, but will need to be
write down or accounted for in later periods.
4) Create outright fraud.
Now, because the regulatory oversight has failed in the USA, banks have
largely become "Bankrupt" and that has deprived many home owners and
businesses from credit (i.e. funds and borrowings).
We strongly condemn such activities, but these are systematic failures in the
systems. Checks and balances has also failed in the US with the republican
lobbying for more tax-cuts on behalf of big and profitable businesses and a
FREE Market knows best logic. That has obviously not worked.
We are hopeful that President's Obama stimulus package will clean up this
mess. But we are not happy that the package was watered down by
including tax-cuts in the package as a result of concessions to the
Republicans, that means that actual package is smaller than it is actually
stated. Tax cuts does not immediately create employment and the logic of a
trickle down economy has been given 8 years of trial and failed.
What does this do for Singapore Mortgages?
Singapore banks have also started to invest for higher returns and some of
them got caught out by Lehman brothers and others. Most of Singapore's
properties are backed by CPF and are by and large more resilient to
sub-prime mortgages. But Singapore's banks are not immune to global trade
and credit tightness. Singapore has a high number of expatriate workforce
and is highly dependent on external trade, And as a result, credit has also
dried up. Many Singapore home loans and home owners are faced with
banks becoming more and more stringent in lending out money.
If you have a home loan in Singapore and are considering to REFINANCE
or are thinking of getting one, we are a research focused mortgage advisory,
our service is free to you because the bank pays us separately.
AMAZON Property and Finance Books
READ FULL ARTICLE at: -
http://www.propertybuyer.com.sg/viewnews.php?article=78
Read more of their articles: -
http://www.propertybuyer.com.sg/articlesnews.php
PM Lee's Call to Foreign Banks to take long term view
The Expatriate population wild card - Could cause your property prices to swing wildly.
Don't believe in Good Debt Bad Debt as 100% gospel
Learn how your Property can have Perpetual Option value
Saturday, February 14, 2009
Wednesday, February 11, 2009
US Mortgage rates at 50 years Low
THE US MORTGAGE RATES ARE AT A 50 YEAR LOW.
The reports have highlighted that many people in the US are refinancing their
home loans at an unprecedented level. They can typically safe a few hundred
dollars off their monthly installments. These days, a few hundred dollars
extra in a household is useful.
IS REFINANCING COMMON?
Refinancing is very common in the USA and Australia and many western
countries with a highly developed Property and mortgage market. It is still
not main-stream in Singapore as awareness is still not that high for
Refinancing.
IS REFINANCING DIFFICULT?
Refinancing is not that simple, neither is it that difficult. Anyone who can set
aside 5 to 10 working days reading, talking to bankers, corresponding,
sending documentation, etc., can do it. It is tedious, that is part of the reason
why people do not always do it.
WHAT ARE THE THINGS TO LOOK OUT FOR IF I DO IT MYSELF?
Here are the things we feel you should look at.
First, be honest with yourself and get a financial bearing of you and
family. Assess whether the current bank loan protects you
adequately in terms of loan repayment serviceability. Then you
can branch out to things that affects Loan repayment
serviceability. I.e. What if I change employment and I receive less
pay in the new job, can I still pay the mortgage? What if my child
goes to college and need funds, will it affect my ability to service
the loan? Be as exhaustive as possible with the scenarios. After
this exercise, you will get a pretty clear picture of what affects
your ability to service your loan.
2nd thing, never assume anything. If today you have a 20 years tenure
Some people will think, it's okay, I can always go to the bank to
extend my loan tenure if I need an easier repayment schedule.
That is not always the case.
Work out the possible cost savings.
Understand the minor differences in the clauses, legal clawbacks,
Repayment penalty, pre-payment penalty, legal subsidy, fire and
insurance subsidy, mortgage insurance, Repayment penalty
subsidy. Loan benefits and risks. Features Benefits and risks.
Some of the possible features are (non exhaustive list): -
Overdraft, Term Loans (Cash out), Construction loans,
Renovation loans, Interest offset savings account, combination
packages, Interest only loans, Variable Sibor Pegged rates with
fixed repayment, fixed rate loans for 1 year, 2 years, 3 years,
even 10 years...
Read more
READ MORE
Wednesday, February 4, 2009
Singapore Budget Announcement
More articles at: -
http://www.propertybuyer.com.sg/articlesnews.php
Some Property Books - Specifically for Singapore
http://astore.amazon.com/httpwwwpro0ad-20
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