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
Tuesday, June 23, 2009
Thursday, June 18, 2009
Invest in Singapore property: Strange things happen when property buying
Singapore Property Investor: Seller is different person
www.propertyBUYER.com.sg
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php
Strange things do happen in property investment in Singapore.
The property buyer has decided to bid on the property which they liked.
What happens during this phase, the property agent usually tries to convince
the buyer that a loan is obtainable and valuation can be matched.
This raises the price and the cost for the buyer.
What is the risk to property buyer if he/she does not check the valuation?
Because if the buyer does not check the valuation prior to committing to a
property, there may be just 1 bank which can support the high valuation.
The property investor may be left with only one choice for their home loan.
They end up paying for a more expensive home loan.
When placing Option to purchase, should I simply give a cheque?
Giving a cheque without first checking who you are paying to is a common
industry practice. However this exposes the property investor to risks.
How do you know the cheque you pay out is indeed the property seller?
You won't know unless you insist on seeing their name and NRIC on the
option to purchase. And you should consider asking the agent to show you
the prove of ownership.
Here is a True story
Our client came to us and they wanted to place an option to purchase. We
helped them to check who the owner was.
On 08th June 2009, we check: -
Owner Name search
We found that the person is a person, XXX. As you can see above, the
instrument of change of proprietor and address was due to "Transfer xxxx
registered on xxxx 2003"
1 day later
1 day later our client was ready to sign on the option to purchase. When
they saw the property owner name does NOT TALLY.
Then our client asked the Singapore property agent to prove that the person
is indeed the rightful owner.
The property agent went to check, we can see it's done on the 9 June 2009.
The name on the certificate of title is indeed the correct person.
But if you check the instrument, it states "Transmission upon Death, registered on 09
June 2009." Wow, we are amazed at the coincidence.
On the 8th June 2009, it is one owner and once our client have decided to
purchase the property, on the 9th June 2009, it is another owner.
This got us worried!!! It was only a casual and routine check and we found something...
We then realized that the previous owner had died last year in 2008.
The previous owner had died. And the place of death was also clearly
stated.
So we now know the truth
The previous owner had died and his/her assets was transferred to the
current owner. We felt that the property agent was not upfront with it and we
did not feel comfortable with it. The cause of death was not stated, but it was
rumoured that the previous owner had died of unnatural death
circumstances upon checking with our friends.
What did www.PropertyBUYER.com.sg do?
We duly informed our client about this. We told them that we don't mind if
they change their minds about investing in the property. But ultimately the
choice is up to them.
Depending on what religion they believe in, they may want to check with
their respective authority on spiritual matters to bless the property.
Our client has decided not to continue the deal. And we lost a mortgage
deal. But we are glad we did it.
www.PropertyBUYER.com.sg is research-focused mortgage advisory. We do not emphasize Cheap loans, but help property buyers get home loans or refinance home loans that fits.
http://www.propertybuyer.com.sg/contactus.php
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
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
www.propertyBUYER.com.sg
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php
Strange things do happen in property investment in Singapore.
The property buyer has decided to bid on the property which they liked.
What happens during this phase, the property agent usually tries to convince
the buyer that a loan is obtainable and valuation can be matched.
This raises the price and the cost for the buyer.
What is the risk to property buyer if he/she does not check the valuation?
Because if the buyer does not check the valuation prior to committing to a
property, there may be just 1 bank which can support the high valuation.
The property investor may be left with only one choice for their home loan.
They end up paying for a more expensive home loan.
When placing Option to purchase, should I simply give a cheque?
Giving a cheque without first checking who you are paying to is a common
industry practice. However this exposes the property investor to risks.
How do you know the cheque you pay out is indeed the property seller?
You won't know unless you insist on seeing their name and NRIC on the
option to purchase. And you should consider asking the agent to show you
the prove of ownership.
Here is a True story
Our client came to us and they wanted to place an option to purchase. We
helped them to check who the owner was.
On 08th June 2009, we check: -
Owner Name search
We found that the person is a person, XXX. As you can see above, the
instrument of change of proprietor and address was due to "Transfer xxxx
registered on xxxx 2003"
1 day later
1 day later our client was ready to sign on the option to purchase. When
they saw the property owner name does NOT TALLY.
Then our client asked the Singapore property agent to prove that the person
is indeed the rightful owner.
The property agent went to check, we can see it's done on the 9 June 2009.
The name on the certificate of title is indeed the correct person.
But if you check the instrument, it states "Transmission upon Death, registered on 09
June 2009." Wow, we are amazed at the coincidence.
On the 8th June 2009, it is one owner and once our client have decided to
purchase the property, on the 9th June 2009, it is another owner.
This got us worried!!! It was only a casual and routine check and we found something...
We then realized that the previous owner had died last year in 2008.
The previous owner had died. And the place of death was also clearly
stated.
So we now know the truth
The previous owner had died and his/her assets was transferred to the
current owner. We felt that the property agent was not upfront with it and we
did not feel comfortable with it. The cause of death was not stated, but it was
rumoured that the previous owner had died of unnatural death
circumstances upon checking with our friends.
What did www.PropertyBUYER.com.sg do?
We duly informed our client about this. We told them that we don't mind if
they change their minds about investing in the property. But ultimately the
choice is up to them.
Depending on what religion they believe in, they may want to check with
their respective authority on spiritual matters to bless the property.
Our client has decided not to continue the deal. And we lost a mortgage
deal. But we are glad we did it.
www.PropertyBUYER.com.sg is research-focused mortgage advisory. We do not emphasize Cheap loans, but help property buyers get home loans or refinance home loans that fits.
http://www.propertybuyer.com.sg/contactus.php
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
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
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
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