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.

Negative Amortization?

Negative amortization for a housing loan occurs when your outstanding housing loan balance increases instead of decreases. There are a few instances that this can happen. Speak to us to learn more.

Commercial Property Loan – Singapore Mortgages For Your Business

Commercial property can be a little more interesting than residential property if you are looking for an investment property. Generally, commercial property has a higher yield than a residential property. And because tenants will be businesses rather than families, it can be a lot of fun talking and negotiating with business owners too.

You can buy commercial property as an individual or by using your company. You can even buy residential property using your company. However, if you are using your company to purchase it, you could be subject to more hassle, more required paperwork, and a lengthier processing time.

For companies, documents required for purchase will include Profit and loss statements, audited or management accounts, operating bank statements, directors’ income tax statements, etc. These are not relevant to documents required for residential properties.

Some of the key figures to look out for on the company statements and documents include

  1. Profit
  2. Positive cash flow
  3. Positive networth
  4. Consistent monthly collections
  5. Healthy running balances in bank statements
  6. Committed paid up capital

A huge portion of commercial and industrial properties are owned by the businesses that operate in them. When your business is stable, it makes full logical sense to buy a place rather than rent one. This is because mortgage monthly payments will very likely be lower than rental and you get to own the place as well. Owning it will also mean that you will reap the rewards of capital gains on the appreciation of value.

A common shrewd business move is to purchase a 2 storey commercial property, lease out 1 level to a tenant and keep another level for own use. You will be able to offset the mortgage payments with rental and get to use your commercial property sufficiently for your company as well. When your company grows too big to accommodate with 1 level, simply take over the other level on rental when the tenancy agreement expires.

A client of ours actually bought a whole freehold 3 storey shophouse. And later build up 8 storeys at the back compound. This increased the property value to almost 4 times the original purchase price. And all these was funded with commercial loans. The whole process took about 3 years. Not a bad investment.

For a new buyer of commercial or industrial property, the loan to value eligible can be a little confusing. There is also more criteria to consider and options to decide on. The commercial property class alone can mean a big difference to the options available to you. Even the authorities that you have to deal with can be different from purchasing a residential property.

Do contact us using our contact form if you need a quick review of the loan to value you can qualify for.

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