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.

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 his house foreclosed and sold, the sales proceeds will be used to pay off the debt from the first lender.

If there’s anything left after that, the second lender will get it’s share of the claim.

Homeowners seek second mortgages usually do so either to cash out home equity or to get a HELOC.

Some even have the idea of using a second mortgage to redeem the first to save on interest rates.

But in practice, banks in Singapore are seldom willing (if ever) to become a lender for a second mortgage.

When borrowers inquire about these credit facilities, a lender would refinance the whole existing loan and provide additional funding via term loans or credit lines.

From a consumer point of view, replacing the current loan with a bigger one is not much different than taking a second loan.

Both will subject the borrower to credit checks and underwriting requirements. Both will have settlement costs to contend with. And both will give the homeowner some liquidity.

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