SIBOR or SOR?

SIBOR is generally more stable while SWAP tend to fluctuate more. However 3-month SWAP has recently stayed consistently lower than 3-month SIBOR for an extended period of time. SOR is also very reactive to currency exchange rates.

Which bank offers the best home loan deals?

Interest rates and spreads are not all that matter. Don't ignore the closing costs involved. Different banks can have different customized home loans for you. Don't be surprised if you will save more on a home loan that charges more interest because of the lesser closing costs involved. This is especially so if you know that you will refinance your home loan as soon as the lock in period has expired.

HDB loan or bank housing loan?

Our opinion is to always take a HDB concessionary loan if you are eligible for one. One of HDB's objectives is to to provide affordable housing for the people. While a bank is profit driven.

Subordination

Subordination occurs when a lien holder agrees to a lower priority claim against the asset (property) which allows another creditor to take it’s place.

When default and foreclosure happens, creditors will be in a queue that determines who gets repaid first with the proceeds of the sale.

The party with the first lien will have Read more

Tenure

The tenure of a loan refers to the period for the entire life of the housing loan.

For example if a loan is for 30 years, the tenure of the loan is 30 years.

Sometimes also known as term, the tenure of a loan plays a more important part to a bank than most consumers Read more

Appraisal

An appraisal refers to the determination of a property’s value by a qualified appraiser.

It must be noted that an appraised value has nothing to do with market value or a seller’s asking price.

It is just an opinion of an appraiser of what the estimated property value is.

Even though transaction prices can occur Read more

Closing

In real estate, closing refers to the finalization of a transaction with all requirements met and documents endorsed.

Some of the key events that take place include:

Official transfer of property ownership Disbursement of funds Execution of all relevant and required documentation etc

Because the closing date is the day when all the terms of Read more

Housing Expense

Housing expense is the monthly amount a borrower has to make towards the mortgage, property taxes, association fees, and related insurance premiums.

It can be used by lenders for assessing borrower profiles during underwriting.

It is also most commonly used to compute housing expense ratio.

This ratio is used to calculate the ratio of housing Read more

Fully Indexed Rate

The fully index rate is the value of home loan interest rate consisting of the index plus spread.

For example, if a loan is on SIBOR + 1%, and SIBOR is 1.20%, then the fully indexed rate is 2.20%.

Bear in mind that index rates are meant to fluctuate with market conditions.

So they change Read more

Due On Sale

Due on sale is a clause contained in home loan contracts that allows banks to demand full repayment of the loan balance should the property be sold.

This is to prevent the possibility of financing a home that don’t belong to a borrower.

Moreover, if the bank don’t demand payment from the borrower when he Read more

Construction Loan

A construction loan basically means a financing agreement for a lender to provide the funding for a site to undergo construction works.

This should not be confused with renovation loans that deal with home design. Construction loans are for home building.

A borrower or land owner will usually have two options to select from.

Either Read more

Second Mortgage

A second mortgage on a house refers to a second loan against the property.

Technically speaking, it is possible for a house to have more than one lien holder.

The first-priority will go to the first lender, while second priority will go to the second lender.

This means that should a borrower go bankrupt, and Read more

Total Interest Payments

Total interest payment refer to the sum of all interest paid over the entire life of the loan or to a specific date.

However, it is not a good reflection of the total costs incurred by a borrower as it does not take into account any settlement costs incurred upfront when the home loan was Read more