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.

Junk Fees

Junk fees is a sarcastic street term used to describe the endless itemized expenses lenders list out to show borrowers so as to justify why there are so much costs involved upfront in issuing a loan.

Labeling cost items as junk fees are usually reserved for item fees that are expressed in dollars rather than a percentage of the loan.

The exception is the origination fee which many also consider a junk fee item.

Where these charges come from is unclear and any effort to clarify it with a banker is usually met with template answers that don’t really answer anything.

Interest rates however, are part of the cost of credit and they are tax deductible.

So they are therefore, not classified as junk fee items.

When it comes to smaller loans, very often junk fees can cost a borrower much more than the interest charged on the loan quantum.

For example, a personal loan of $2,000 at 5% interest can have junk fess totaling $250 that is deducted directly from disbursement. This means that the borrower will be charged interest on $2,000 even though in reality, he was only given $1,750.

Sometimes, these fees can be waived by lenders. So do remember to request for it.

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