Housing Loan Singapore

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Providing online home loan services since 2009

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.

Definition

Indicative Value

An indicative value is an estimation (or guesstimation) of value on a property based purely on information that can be gathered about the property and the market in which it operates in.

They are usually requested from appraisers by banks when trying to determine value so as to determine the loan to value in which a borrower can borrower on a mortgage.

They can also be requested by real estate investors who are evaluating the market value of a property they are intending to buy or sell.

Appraisers can have a wealth of information on their fingertips (provided they are in the office) and can often provide a credible indicative value within minutes of receiving information regarding a house, apartment, building, etc.

When a banker for example, calls a valuation company to get indicative value, information provided include things such as:

  • Property address
  • Square footage
  • Freehold or leasehold with remaining years
  • Type of property
  • etc

Sometimes in order to nudge a valuer to provide a certain level of value, they might also mention the buying price.

This is so that the valuer knows that is the “target” value. The reason for this is for LTV as mentioned previously.

With the information provided by a banker, the valuer merges the information with market information to generate an estimated value.

These market information could include variables like:

  • Recent transaction prices in the neighborhood
  • Property appreciation and depreciation trends
  • Master plans
  • Demand and supply
  • etc

With this indicative value, a banker would be able to proceed with processing of a home loan application based on it.

This helps to determine maximum LTV.

The final value which is generated after a proper appraisal is usually the same as the indicative valuation.

Sometimes an investor can refuse to accept a low level of indicative value even though it does not affect the loan amount he is seeking.

For example, a property investor might be seeking a 40% loan on a $1m property. But the indicative value is only $900,000. While this does not affect the amount of financing the investor would be able to obtain, a lower value listed in the official closing documents can have material repercussions in the future.

This could be that a potential buyer refuses to pay a good price for the property as it was valued at just $900,000 before. Or that a cash out refinancing application is not able to reach a high equity loan quantum as the previous valuation was too low.

For regular home buyers, indicative value seldom causes such stress as they are only viewed as a variable that affects their home purchase for self-occupancy.

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What We Do For You

We Gather And Provide You Information On The Best Housing Loans In Singapore So That You Can Make A Better Decision Based On What Is Available In The Market

Which bank do you recommend for home loans in Singapore?

We don't recommend banks. We recommend you the best home loan that suits your profile and financial position.

How Does SOR Rates Hit Negative Value?

SOR rates are calculated with a complex financial formula, solved with simple algebra. The results of solving the equation therefore depends on the inputs used. Varying inputs that result from economic impacts and indicators can lead to negative value when the formula is solved. Key input indicators include USD/SGD spot rates and USD/SGD forward rates.

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.

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.
Want to see housing loan interest rate trends for the last 36 months?

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It makes absolutely no sense to pay more
than you have to on a home loan.

Find the best mortgage rates here
SEE RATES
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Find the best mortgage rates here
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