INVEST IN SINGAPORE PROPERTY OR RENT ONE
There are many factors to consider whether to buy or rent a house. If you are a foreigner, you may be tempted to buy a house.
For own stay, you need to first like the place then you are buying. You need to be emotional and you need the house to “talk to you”, you need to feel good about the place. If you are buying for investment, you need to be as unemotional as possible. It’s all about safety, yield and capital appreciation.
Everyone needs a roof over their heads. Hence a residential home is first and foremost a consumption.
By Property Buyer Mortgage Brokers
When you rent a house
When you rent a house, you pay rent, rental stamping fee and some routine maintenance.
When you buy a house
When you buy a house, you pay interest costs for the housing loan, property tax, maintenance and repairs and many other associated costs.
Should you buy a house or Rent a house?
Let us examine the cost of renting a house versus that of owning a house.
There are of course price considerations. Timing is quite important as well as negotiation skills. Most people are disadvantaged when they deal with property agents alone.
RENTING COST
As the cost of renting a house will also change over time, we have factored in a +/- 30% renting cost so that you can compare the relative cost and hence savings.
WILL YOU SAVE MONEY THROUGH BUYING A HOUSE?
Assume you will now buy a house at Park Infinia at Wee Nam say at $1666 per square feet. How much will you save?
We worked out a few interest rates scenario and it’s various yearly housing cost.
We also worked out the rental costs over a 3 years period on both high, low and current scenario.
Rental Cost over 3 years (Ignoring time-value of money)
If you have a 3 to 5 years horizon, let’s say you sit out of the market for 3 years, this will be your cost over 3 years.
Current: 3 x $67,142 = $201,426
+30% : 3 x $85,844 = $257,532
-30%: 3 x $48,439 = $145,317
Cost of Buying a House over 3 years
If you are buying a house, let’s assume a 3 year horizon. Based on repayment, the amount will be almost the same as renting a place.
The cost over 3 years using various interest rates: -
Based on 1.5%: 3 x $31,278 = $ 93,834
Based on 2.5%: 3 x $44,622 = $134,064
Based on 3.5%: 3 x $57,966 = $173,898
Savings From buying a house versus renting (3 year horizon)
Rental cost Current price: 3 x $67,142 = $201,426
Housing loan cost
Based on 1.5%: 3 x $31,278 = $ 93,834
Based on 2.5%: 3 x $44,622 = $134,064
Based on 3.5%: 3 x $57,966 = $173,898
Savings from buying a place ranges from $27,528 to $107,592.
Based on 1.5%: $201,426 - $93,834 = $107,592
Based on 2.5%: $201,426 - $134,064 = $ 67,362
Based on 3.5%: $201,426 - $173,898 = $ 27,528
So it would seem that there will definitely be savings from buying a house compared to renting. Is that really the case?
If all property prices stayed stagnant, that would definitely be the case. However, prices of properties tend to fluctuate.
As you can see from the above chart that, if you buy at a wrong time, the difference can be easily a $321 psf difference within a 1 year period.
In other words, a 1001 sq feet condo would cost you $321,321 more.
Your savings ranging from $27,528 to $107,592 would be wiped out by getting in at a wrong price by overpaying $321,321.
Therefore, when property agents tell you it's cheaper to buy a house than renting, it's only half the story.
The other half of the story is still about buying at the right price, obviously this half, they don't want you to know.
Please note:
Calculations ignore time-value of money as well as the opportunity cost of sum of money repaid through principle repayment.
About Property Buyer Contact Property Buyer
www.PropertyBUYER.com.sg
We are a Research-focused Singapore Mortgage Consultant which helps you compare Singapore Home loans either for new home loans or Singapore Mortgage refinance home loans, we balance risks versus rewards for each home loan to match your risk profile and financing needs.
Not Simply Cheap, but what Fits. We Research, You Save!
Tel: 6100 - 0608
SMS: 9782 - 8606
Email: loans@propertyBUYER.com.sg
All articles are the intellectual property of www.PropertyBuyer.com.sg. You are welcome to reproduce our articles provided that you include an active and working link back to http://www.propertyBuyer.com.sg
Career at Property Buyer
Showing posts with label singapore mortgage consultant. Show all posts
Showing posts with label singapore mortgage consultant. Show all posts
Thursday, October 28, 2010
Saturday, September 5, 2009
Invest in Singapore property using CPF
Singapore Property Investor and CPF funds for second property
CPF is abbreviation for Central Providend fund. It is similar to the American 301k plan. CPF funds are supposed to be saved for retirement.
Every Singaporean must contribute 20% of their income into CPF. Therefore Singapore’s CPF has billions of dollars of funds. Singapore property investor and Singapore property buyer also have lots of fund and liquidity, unlike other markets. The Singapore market is more about confidence than about liquidity.
About Property Buyer Contact Property Buyer
www.PropertyBUYER.com.sg
We are a Research-focused Singapore Mortgage Consultant which helps you compare Singapore Home loans either for new home loans or refinancing, we balance risks versus rewards for each home loan to match your risk profile and financing needs.
Buying property is a serious affair, we do NOT advocate a Greed based buying approach, we emphasize that you need to check your affordability and do your sums right. If you are unsure, we are happy to help you check.
Not Simply Cheap, but what Fits. We Research, You Save!
Tel: 6100 - 0608
SMS: 9782 - 8606
loans@propertyBUYER.com.sg
CPF causes you to overpay?
Singapore government likes to get maximum value for its land. If too many people can afford Housing, it is time to raise prices. In other circumstances, we can say it’s market forces or free market as supply and demand are determined by private enterprise. But not in this case.
HDB Government Housing market is Not a free market
But in Singapore’s case, government housing (HDB) is a controlled market, www.propertybuyer.com.sg is often critical of the way some policies are dished out, to the disadvantaged of the Singapore property buyers.
Many people along with us also see the setting of prices as arbitrary, because the government controls much the state land and there is no question of supply, but rather that of demand and affordability. The government can freely control supply to set prices.
CPF funds adds to affordability
Allowing the use of CPF funds for HDB and property in general raises the affordability.
With this new found liquidity, the government can then raise the selling prices of HDB, by putting in more frills and of course enhancing the construction industry producing more value add.
Of course, ultimately the home buyers and the Singapore property investors are the ones that pay for it through sapping up their retirement funds in CPF.
Raising prices of HDB flats is a means to sap liquidity out of the individual’s CPF account into the government coffers through land sales.
Since the Singapore property investor – buyer may have limited cash, the Singapore government allows the use of individual’s CPF funds to pay for their government “subsidized” housing. As a result properties become more and more expensive, effectively becoming an indirect tax.
Coupled with more funds (through the use of CPF) money, plus low interest rate environment, many Singapore banks cannot reduce rates much more rather they start to come out with newer terminology and features. Comparing Singapore Home loan has become much more tedious exercise, it is prudent to engage www.PropertyBUYER.com.sg mortgage consultants to help. They can be contacted at +65-6100-0608.
Refinancing home loan can also be tedious.
Singaporeans have lesser and lesser CPF money for retirement
Singaporeans have lesser and lesser CPF monies left for their retirement as they pay for ever more expensive properties. At some stage, we have to say, “Mr. Government, stop eying our CPF money!!!”
Since so many people are resigned to the fact that they will never really see their CPF money as cash as more and more rules are put in place to tap into their CPF.
Even after retirement age at 55 years, there is the minimum sum that you have to set aside. Currently (as at 2009) the minimum sum is $117,000 for retirement. This is the minimum sum that a person must have in the account. You can only withdraw any CPF funds in excess of the minimum sum upon retirement age.
Many Singaporeans have already given up on hoping to see their CPF money. As a result, many Singaporeans and PR used CPF to buy their second property before 1st July, 2006.
Can I use my CPF to purchase more than one property?
(Source: www.cpf.gov.sg)
Yes, you may use your CPF to purchase more than one property.
However, if you already own a property (HDB flat or private property) bought with your CPF savings and wishes to buy another property with CPF savings from 1 July 2006, you will be able to do so only after setting aside in your Ordinary and Special Accounts (including the amount used for investment from the Special Account) the prevailing Minimum Sum cash component if you are below 55 years, or the Minimum Sum cash component shortfall if you are aged 55 and above.
If you currently own more than one property bought with CPF savings before 1 July 2006, you need not set aside the prevailing Minimum Sum cash component unless you subsequently buy another property using your CPF savings on or after 1 July 2006.
Please note that this is not applicable if you are applying to use your CPF to purchase a second or subsequent property with non-related singles. Non-related singles can only jointly use their CPF to purchase their one and only property (private property or HDB flat).
Your first property can be used as a pledge for half the monies required under the Minimum sum. This means that if you with to use CPF for your second property (as at 2009), you must have at least $58,500 ($117,000 x 50%). Any CPF above $58,500 can be used for your second property.
Is Singapore Market over Leveraged?
Although Singapore is no where near as dangerous as other markets where there are plentiful “no cash down” home loans. With CPF being allowed to make up the 15% down-payment on the purchase price and only 5% is cash down-payment, we at www.PropertyBUYER.com.sg would consider the Singapore market rather leveraged compared to the early say 5 years ago or pre-2000.
The current property boom in 2009 lacks fundamentals (Refer to Property Buyer update July 2009 in the article section of www.PropertyBUYER.com.sg/articles/article.php) as its underpinnings, so it is still hard to say whether sentiments will change the economic fundamentals or economic fundamentals will eventually bring the sentiments back in line.
There are good and bad deals in every property cycle, please exercise your own good judgement.
About Property Buyer Contact Property Buyer
www.PropertyBUYER.com.sg
We are a Research-focused Singapore Mortgage Consultant which helps you compare Singapore Home loans either for new home loans or refinancing, we balance risks versus rewards for each home loan to match your risk profile and financing needs.
Buying property is a serious affair, we do NOT advocate a Greed based buying approach, we emphasize that you need to check your affordability and do your sums right. If you are unsure, we are happy to help you check.
Not Simply Cheap, but what Fits. We Research, You Save!
Tel: 6100 - 0608
SMS: 9782 - 8606
loans@propertyBUYER.com.sg
CPF is abbreviation for Central Providend fund. It is similar to the American 301k plan. CPF funds are supposed to be saved for retirement.
Every Singaporean must contribute 20% of their income into CPF. Therefore Singapore’s CPF has billions of dollars of funds. Singapore property investor and Singapore property buyer also have lots of fund and liquidity, unlike other markets. The Singapore market is more about confidence than about liquidity.
About Property Buyer Contact Property Buyer
www.PropertyBUYER.com.sg
We are a Research-focused Singapore Mortgage Consultant which helps you compare Singapore Home loans either for new home loans or refinancing, we balance risks versus rewards for each home loan to match your risk profile and financing needs.
Buying property is a serious affair, we do NOT advocate a Greed based buying approach, we emphasize that you need to check your affordability and do your sums right. If you are unsure, we are happy to help you check.
Not Simply Cheap, but what Fits. We Research, You Save!
Tel: 6100 - 0608
SMS: 9782 - 8606
loans@propertyBUYER.com.sg
CPF causes you to overpay?
Singapore government likes to get maximum value for its land. If too many people can afford Housing, it is time to raise prices. In other circumstances, we can say it’s market forces or free market as supply and demand are determined by private enterprise. But not in this case.
HDB Government Housing market is Not a free market
But in Singapore’s case, government housing (HDB) is a controlled market, www.propertybuyer.com.sg is often critical of the way some policies are dished out, to the disadvantaged of the Singapore property buyers.
Many people along with us also see the setting of prices as arbitrary, because the government controls much the state land and there is no question of supply, but rather that of demand and affordability. The government can freely control supply to set prices.
CPF funds adds to affordability
Allowing the use of CPF funds for HDB and property in general raises the affordability.
With this new found liquidity, the government can then raise the selling prices of HDB, by putting in more frills and of course enhancing the construction industry producing more value add.
Of course, ultimately the home buyers and the Singapore property investors are the ones that pay for it through sapping up their retirement funds in CPF.
Raising prices of HDB flats is a means to sap liquidity out of the individual’s CPF account into the government coffers through land sales.
Since the Singapore property investor – buyer may have limited cash, the Singapore government allows the use of individual’s CPF funds to pay for their government “subsidized” housing. As a result properties become more and more expensive, effectively becoming an indirect tax.
Coupled with more funds (through the use of CPF) money, plus low interest rate environment, many Singapore banks cannot reduce rates much more rather they start to come out with newer terminology and features. Comparing Singapore Home loan has become much more tedious exercise, it is prudent to engage www.PropertyBUYER.com.sg mortgage consultants to help. They can be contacted at +65-6100-0608.
Refinancing home loan can also be tedious.
Singaporeans have lesser and lesser CPF money for retirement
Singaporeans have lesser and lesser CPF monies left for their retirement as they pay for ever more expensive properties. At some stage, we have to say, “Mr. Government, stop eying our CPF money!!!”
Since so many people are resigned to the fact that they will never really see their CPF money as cash as more and more rules are put in place to tap into their CPF.
Even after retirement age at 55 years, there is the minimum sum that you have to set aside. Currently (as at 2009) the minimum sum is $117,000 for retirement. This is the minimum sum that a person must have in the account. You can only withdraw any CPF funds in excess of the minimum sum upon retirement age.
Many Singaporeans have already given up on hoping to see their CPF money. As a result, many Singaporeans and PR used CPF to buy their second property before 1st July, 2006.
Can I use my CPF to purchase more than one property?
(Source: www.cpf.gov.sg)
Yes, you may use your CPF to purchase more than one property.
However, if you already own a property (HDB flat or private property) bought with your CPF savings and wishes to buy another property with CPF savings from 1 July 2006, you will be able to do so only after setting aside in your Ordinary and Special Accounts (including the amount used for investment from the Special Account) the prevailing Minimum Sum cash component if you are below 55 years, or the Minimum Sum cash component shortfall if you are aged 55 and above.
If you currently own more than one property bought with CPF savings before 1 July 2006, you need not set aside the prevailing Minimum Sum cash component unless you subsequently buy another property using your CPF savings on or after 1 July 2006.
Please note that this is not applicable if you are applying to use your CPF to purchase a second or subsequent property with non-related singles. Non-related singles can only jointly use their CPF to purchase their one and only property (private property or HDB flat).
Your first property can be used as a pledge for half the monies required under the Minimum sum. This means that if you with to use CPF for your second property (as at 2009), you must have at least $58,500 ($117,000 x 50%). Any CPF above $58,500 can be used for your second property.
Is Singapore Market over Leveraged?
Although Singapore is no where near as dangerous as other markets where there are plentiful “no cash down” home loans. With CPF being allowed to make up the 15% down-payment on the purchase price and only 5% is cash down-payment, we at www.PropertyBUYER.com.sg would consider the Singapore market rather leveraged compared to the early say 5 years ago or pre-2000.
The current property boom in 2009 lacks fundamentals (Refer to Property Buyer update July 2009 in the article section of www.PropertyBUYER.com.sg/articles/article.php) as its underpinnings, so it is still hard to say whether sentiments will change the economic fundamentals or economic fundamentals will eventually bring the sentiments back in line.
There are good and bad deals in every property cycle, please exercise your own good judgement.
About Property Buyer Contact Property Buyer
www.PropertyBUYER.com.sg
We are a Research-focused Singapore Mortgage Consultant which helps you compare Singapore Home loans either for new home loans or refinancing, we balance risks versus rewards for each home loan to match your risk profile and financing needs.
Buying property is a serious affair, we do NOT advocate a Greed based buying approach, we emphasize that you need to check your affordability and do your sums right. If you are unsure, we are happy to help you check.
Not Simply Cheap, but what Fits. We Research, You Save!
Tel: 6100 - 0608
SMS: 9782 - 8606
loans@propertyBUYER.com.sg
Sunday, June 28, 2009
Singapore mortgage refinance update 2009
Singapore Mortgage refinance update June 2009
Courtesy of www.PropertyBUYER.com.sg
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php
SIbor and SOR rate was all the rage in 2008
Around 2008, Sibor and SOR based home loan rates were all the rage.
Interest rates were SKY HIGH as recent as April to June in 2008. Many
people got their hands burnt by bank's variable rate packages.
As a result of that, many people switched to Sibor or SOR based home loan
rates as it is more transparent.
Many people were Burnt by Variable rate home loan or refinance packages
Variable rates are pegged to the bank's internal reference and typically the
way in which the banks raise rates are somewhat arbitrary. Banks have also
created many reference pegs such as, "mortgage rates", Home loan rate",
board rate; you name it...
SIBOR is transparent, but also Volatile
Sibor on the other hand is very transparent, but it is also volatile, as it can
swing wildly in times of crisis.
Banks Keep raising rates... Until...
Before Sep to Oct 2008, some of the best packages are Sibor + 0.6% to
0.7%. This means that bank's gross lending margin is only 0.6% to 0.7%.
By Oct 2008, some banks have raised their Sibor based lending from Sibor
+ 0.7% to Sibor + 1.25%.
In short, banks have decided that the credit crisis is so bad, if they are going
to lend you at all, they want an arm and a leg to compensate them for the
risks.
We warned in FEB 2009 that Banks will yet again raise rates
For those who remember, we have warned people around Feb 2009 that in
Mar 2009, banks will raise rates again. True enough, most banks raised their
SIBOR or SOR based lending rate from Sibor + 1.25% to around Sibor +
1.75%.
Strangely the banks are not really competing in Mar 2009, many banks soon
fall in line.
Maybank fired the first warning shot by dropping rates
Then suddenly Maybank fired a warning shot by dropping their first year
rates to 1.6% in March 2009.
However it was very targeted at higher credit quality customers with loan to
valuation of only 70%.
We were expecting many banks to change course can start competing to
give consumer a better benefits. That did not materialized in March.
Another foreign bank try to steal Maybank's thunder.
Later in March, another foreign bank kept pace with Maybank by matching
their rates, although the terms were different.
During this time, the local banks did not bite, instead preferring to keep their
rates high. At this time, it was mainly the foreign banks that are lending,
although the processing time has increased from 2 to 3 days to as long as 7
days in some cases.
During this time, some banks launched their relationship based lending
rates.
The local banks did not jump in to compete for a long time and sat at the
sidelines watching.
People expect that Maybank will soon terminate their package and rates will
rise.
Many people expected that the Foreign banks will soon terminate their
promotional packages. By this time, June 2009, a local bank has woken up
from it's 6 months slumber and jumped into the fray to compete having been
dormant for almost 6 months. This will probably kick off a price war with
other local banks jumping in.
EVALUATE REFINANCING YOUR HOME LOAN
The rates are a 1.9% for 3 years fixed.
The rate is pretty good. Do give us a call at 6100-0608 or sms us at
9782-8606.
We do NOT charge a fee as banks pay us separately. Meanwhile,you can
just sit back and relax while we submit your application, follow-up on
approval, update you the progress, check the letter of offer
legal contract for major omissions. So would you rather do the work all my
yourself or would you rather sit back and relax and let us do the work for
you, for free?
loans@propertybuyer.com.sg
Will other banks now jump in to compete?
We think that the rates on offer is quite attractive considering that there
could be some risk of inflation given the massive fiscal stimulus in many
countries, locking-in for 3 years at low rates makes sense.
We don't know if other banks will jump in, but it is likely that other banks will
match or tweak it in a different way with some terms and conditions.
www.PropertyBUYER.com.sg is research-focused mortgage consultant. We do not emphasize Cheap loans, but help property buyers refinance home loans to get the best deal or get new home loans.
ABOUT www.PropertyBUYER.com.sg
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
Contact us
http://www.propertybuyer.com.sg/contactus.php
Property Checklist
http://www.propertybuyer.com.sg/viewnews.php?article=39
Read More articles
http://www.propertyBUYER.com.sg/articlesnews.php
Refinance and Mortgages DIY steps
http://www.squidoo.com/Singapore-homeloan
Follow us on Twitter
http://twitter.com/sg_homeloan
Follow us on Facebook
http://www.facebook.com/group.php?gid=7371258458
Courtesy of www.PropertyBUYER.com.sg
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php
SIbor and SOR rate was all the rage in 2008
Around 2008, Sibor and SOR based home loan rates were all the rage.
Interest rates were SKY HIGH as recent as April to June in 2008. Many
people got their hands burnt by bank's variable rate packages.
As a result of that, many people switched to Sibor or SOR based home loan
rates as it is more transparent.
Many people were Burnt by Variable rate home loan or refinance packages
Variable rates are pegged to the bank's internal reference and typically the
way in which the banks raise rates are somewhat arbitrary. Banks have also
created many reference pegs such as, "mortgage rates", Home loan rate",
board rate; you name it...
SIBOR is transparent, but also Volatile
Sibor on the other hand is very transparent, but it is also volatile, as it can
swing wildly in times of crisis.
Banks Keep raising rates... Until...
Before Sep to Oct 2008, some of the best packages are Sibor + 0.6% to
0.7%. This means that bank's gross lending margin is only 0.6% to 0.7%.
By Oct 2008, some banks have raised their Sibor based lending from Sibor
+ 0.7% to Sibor + 1.25%.
In short, banks have decided that the credit crisis is so bad, if they are going
to lend you at all, they want an arm and a leg to compensate them for the
risks.
We warned in FEB 2009 that Banks will yet again raise rates
For those who remember, we have warned people around Feb 2009 that in
Mar 2009, banks will raise rates again. True enough, most banks raised their
SIBOR or SOR based lending rate from Sibor + 1.25% to around Sibor +
1.75%.
Strangely the banks are not really competing in Mar 2009, many banks soon
fall in line.
Maybank fired the first warning shot by dropping rates
Then suddenly Maybank fired a warning shot by dropping their first year
rates to 1.6% in March 2009.
However it was very targeted at higher credit quality customers with loan to
valuation of only 70%.
We were expecting many banks to change course can start competing to
give consumer a better benefits. That did not materialized in March.
Another foreign bank try to steal Maybank's thunder.
Later in March, another foreign bank kept pace with Maybank by matching
their rates, although the terms were different.
During this time, the local banks did not bite, instead preferring to keep their
rates high. At this time, it was mainly the foreign banks that are lending,
although the processing time has increased from 2 to 3 days to as long as 7
days in some cases.
During this time, some banks launched their relationship based lending
rates.
The local banks did not jump in to compete for a long time and sat at the
sidelines watching.
People expect that Maybank will soon terminate their package and rates will
rise.
Many people expected that the Foreign banks will soon terminate their
promotional packages. By this time, June 2009, a local bank has woken up
from it's 6 months slumber and jumped into the fray to compete having been
dormant for almost 6 months. This will probably kick off a price war with
other local banks jumping in.
EVALUATE REFINANCING YOUR HOME LOAN
The rates are a 1.9% for 3 years fixed.
The rate is pretty good. Do give us a call at 6100-0608 or sms us at
9782-8606.
We do NOT charge a fee as banks pay us separately. Meanwhile,you can
just sit back and relax while we submit your application, follow-up on
approval, update you the progress, check the letter of offer
legal contract for major omissions. So would you rather do the work all my
yourself or would you rather sit back and relax and let us do the work for
you, for free?
loans@propertybuyer.com.sg
Will other banks now jump in to compete?
We think that the rates on offer is quite attractive considering that there
could be some risk of inflation given the massive fiscal stimulus in many
countries, locking-in for 3 years at low rates makes sense.
We don't know if other banks will jump in, but it is likely that other banks will
match or tweak it in a different way with some terms and conditions.
www.PropertyBUYER.com.sg is research-focused mortgage consultant. We do not emphasize Cheap loans, but help property buyers refinance home loans to get the best deal or get new home loans.
ABOUT www.PropertyBUYER.com.sg
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
Contact us
http://www.propertybuyer.com.sg/contactus.php
Property Checklist
http://www.propertybuyer.com.sg/viewnews.php?article=39
Read More articles
http://www.propertyBUYER.com.sg/articlesnews.php
Refinance and Mortgages DIY steps
http://www.squidoo.com/Singapore-homeloan
Follow us on Twitter
http://twitter.com/sg_homeloan
Follow us on Facebook
http://www.facebook.com/group.php?gid=7371258458
Tuesday, June 23, 2009
Invest in Singapore property: affordability case study
Invest in Singapore property: Affordability case study
Mr. and Mrs Lim earns a monthly income of $3,100 and $3,250 respectively.
They have a car installment which has 5 years remaining and $800 each
month.
* 3100 + 3250 = $6,350
* Credit card liabilities = $0
* Car Liabilities = $800
* Net cash flow (incl cpf) = $5,550 Per month
Contact us
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php
Their parents gave them $120,000, they have $90,000 of savings.
They are planning on buying a condominium: -
* Condo price = $ 875,000
* Loan amount = $ 700,000
* CASH AT HAND = $ 210,000
* Stamp duty = -$ 20,850
* Downpayment = -$ 175,000
* Cash left = $ 14,150
Based on a Loan Tenure of 30 years @ 2.5% interest rate
* 30 years = $2766 per month (295,704 interest paid out)
Based on a loan tenure of 35 years @ 2.5% interest rate
* 35 years = $2,502 per month (351,305 interest paid out)
Assuming a Debt servicing ratio to cash flow of 50%
(Note: this is just a guideline, different banks use different interest rates and slightly different DSR, buyers are encouraged to check with us to obtain an approval-in-principle home loan, call us at 6100-0608 or SMS us at 9782-8606 or email us at loans@propertybuyer.com.sg to check)
While they look for investment property in Singapore, they have to make sure that
their credit history is clean. Their income should qualify them for a loan amount of
$700,000.
They are thinking of using 30 years instead of 35 years.
Because the interest paid out would be less.
Of course if everything goes smoothly, they would be able to go for the 30
year tenure. But in case something goes wrong, i.e. an accident, loss of
income, etc. They will be really cash strapped.
There are other incidentals associated with owning a private condo, such as
the following: -
*** $300 per month maintenance fees or $3600 per year.
*** Property tax, estimated at $18,000 per year, i.e. at owner occupier status
@ 4% = $720 per year or $60 per month.
So the monthly extra commitment is $360 due to the property.
So if we re-compute the fixed liabilities, the net cash position is...
* income 3100 + 3250 = $ 6,350
* Liabilities = $ 800 car (for 5 years)
* Liabilities = $ 360 condo related
* Credit card liabilities = $ 0
* Net cash = $ 5,190
Based on a Net cash position of $5190, paying out $2766 a month will be a
bit too tight for Mr. and Mrs. Lim.
So we recommended that Mr. Mrs Lim take a 35 years loan instead of a 30
years loan. This would be more comfortable on their monthly expenses.
ARE CAREERS AS SAFE AS THEY USED TO BE?
As careers are shorter with the new economic dynamics with technology and
business disruptions, many people will expect to change many jobs and
even change industries in which they work in their life times. From 1985 to
2009, we have encountered recessions in 1987, 1997, 2003, 2009, a
working adult should see major disruptions at least once every 5 years in
their life time. There is no guarantee of employment and salary stability.
So what is safer way for the Home loan tenure?
So just using a safer measure, we use a 20 year loan tenure @ 2.5% to
compute...The monthly installment is $3709 per month. Therefore Mr. and
Mrs. Lim should ideally be earning around $7,418 + $800 + $360 = $8,578
to more comfortably afford the Condo of $ 875,000.
So based on their current income, how much can they AFFORD?
Based on their current earning capacity, they should really be looking at a
property that is no more than, $480,000 loan or $600,000 property, based on
a 20 year loan.
Why work through www.PropertyBUYER.com.sg for mortgage home loans?
We help property buyers to look through each property's valuation to
establish a valuation range for any given unit. We have a unique
methodology to evaluate bargains for properties, we usually charge a fee for
property buying analysis service, we are offering this service free until Dec
2009.
-----------------------------------------------------------------------------
www.propertyBUYER.com.sg is a research-focused Singapore Mortgage
advisor that helps individuals get the best fit Singapore Home loans or to
refinance their properties, not simply the cheapest Singapore Home loans.
You can come to us for your Singapore Home Loan needs and we will do the
research work to compare all the bank's packages as well as assess the
best fit for you.
Contact us
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php
Property Checklist (Very Kiasu one)
http://www.propertybuyer.com.sg/viewnews.php?article=39
Read More articles
http://www.propertyBUYER.com.sg/articlesnews.php
Refinance and Mortgages DIY steps
http://www.squidoo.com/Singapore-homeloan
Follow us on Twitter
http://twitter.com/sg_homeloan
Follow us on Facebook
http://www.facebook.com/group.php?gid=7371258458
Mr. and Mrs Lim earns a monthly income of $3,100 and $3,250 respectively.
They have a car installment which has 5 years remaining and $800 each
month.
* 3100 + 3250 = $6,350
* Credit card liabilities = $0
* Car Liabilities = $800
* Net cash flow (incl cpf) = $5,550 Per month
Contact us
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php
Their parents gave them $120,000, they have $90,000 of savings.
They are planning on buying a condominium: -
* Condo price = $ 875,000
* Loan amount = $ 700,000
* CASH AT HAND = $ 210,000
* Stamp duty = -$ 20,850
* Downpayment = -$ 175,000
* Cash left = $ 14,150
Based on a Loan Tenure of 30 years @ 2.5% interest rate
* 30 years = $2766 per month (295,704 interest paid out)
Based on a loan tenure of 35 years @ 2.5% interest rate
* 35 years = $2,502 per month (351,305 interest paid out)
Assuming a Debt servicing ratio to cash flow of 50%
(Note: this is just a guideline, different banks use different interest rates and slightly different DSR, buyers are encouraged to check with us to obtain an approval-in-principle home loan, call us at 6100-0608 or SMS us at 9782-8606 or email us at loans@propertybuyer.com.sg to check)
While they look for investment property in Singapore, they have to make sure that
their credit history is clean. Their income should qualify them for a loan amount of
$700,000.
They are thinking of using 30 years instead of 35 years.
Because the interest paid out would be less.
Of course if everything goes smoothly, they would be able to go for the 30
year tenure. But in case something goes wrong, i.e. an accident, loss of
income, etc. They will be really cash strapped.
There are other incidentals associated with owning a private condo, such as
the following: -
*** $300 per month maintenance fees or $3600 per year.
*** Property tax, estimated at $18,000 per year, i.e. at owner occupier status
@ 4% = $720 per year or $60 per month.
So the monthly extra commitment is $360 due to the property.
So if we re-compute the fixed liabilities, the net cash position is...
* income 3100 + 3250 = $ 6,350
* Liabilities = $ 800 car (for 5 years)
* Liabilities = $ 360 condo related
* Credit card liabilities = $ 0
* Net cash = $ 5,190
Based on a Net cash position of $5190, paying out $2766 a month will be a
bit too tight for Mr. and Mrs. Lim.
So we recommended that Mr. Mrs Lim take a 35 years loan instead of a 30
years loan. This would be more comfortable on their monthly expenses.
ARE CAREERS AS SAFE AS THEY USED TO BE?
As careers are shorter with the new economic dynamics with technology and
business disruptions, many people will expect to change many jobs and
even change industries in which they work in their life times. From 1985 to
2009, we have encountered recessions in 1987, 1997, 2003, 2009, a
working adult should see major disruptions at least once every 5 years in
their life time. There is no guarantee of employment and salary stability.
So what is safer way for the Home loan tenure?
So just using a safer measure, we use a 20 year loan tenure @ 2.5% to
compute...The monthly installment is $3709 per month. Therefore Mr. and
Mrs. Lim should ideally be earning around $7,418 + $800 + $360 = $8,578
to more comfortably afford the Condo of $ 875,000.
So based on their current income, how much can they AFFORD?
Based on their current earning capacity, they should really be looking at a
property that is no more than, $480,000 loan or $600,000 property, based on
a 20 year loan.
Why work through www.PropertyBUYER.com.sg for mortgage home loans?
We help property buyers to look through each property's valuation to
establish a valuation range for any given unit. We have a unique
methodology to evaluate bargains for properties, we usually charge a fee for
property buying analysis service, we are offering this service free until Dec
2009.
-----------------------------------------------------------------------------
www.propertyBUYER.com.sg is a research-focused Singapore Mortgage
advisor that helps individuals get the best fit Singapore Home loans or to
refinance their properties, not simply the cheapest Singapore Home loans.
You can come to us for your Singapore Home Loan needs and we will do the
research work to compare all the bank's packages as well as assess the
best fit for you.
Contact us
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php
Property Checklist (Very Kiasu one)
http://www.propertybuyer.com.sg/viewnews.php?article=39
Read More articles
http://www.propertyBUYER.com.sg/articlesnews.php
Refinance and Mortgages DIY steps
http://www.squidoo.com/Singapore-homeloan
Follow us on Twitter
http://twitter.com/sg_homeloan
Follow us on Facebook
http://www.facebook.com/group.php?gid=7371258458
Subscribe to:
Posts (Atom)
Posts
