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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

Option To Purchase (OTP)

An option to purchase is a basic agreement between a property seller and buyer whereby the buyer has been granted the exclusive right to buy the property within a certain period of time.

The validity period for such options are usually two weeks from the date of issue of the OTP.

What usually happens for an option to purchase to be generated is that a buyer agrees a purchase price with the seller. He then pays a booking fee (or option fee) in order to obtain the exclusive right to buy the property. This is earnest money.

Should the buyer fail to exercise this right before the expiry of this right, he forfeits the deposit and the home owner would be able to sell the property to another buyer.

Should the buyer takes action to exercise the OTP but the seller has a change of heart, then the buyer may claim damages against the seller.

This can sometimes go all the way to court.

Option to purchase vs sales and purchase agreement

It must be said that an option-to-purchase is not the same as a sales and purchase agreement (S&P).

A sales and purchase agreement is a bilateral agreement between buyer and seller whereby the buyer has agreed to buy, and the seller has agreed to sell at an agreed transaction price.

An OTP is basically just a right to buy given to the potential buyer. The buyer can still walk out of the deal and just have the booking fee forfeited.

When it comes to claims for damages, the sales and purchase agreement would have a higher amount.

Theoretically, the sales and purchase agreement would  come after the OTP has been exercised.

But sometimes, both parties can skip the OTP and move on directly to the S&P.

This can be commonly observes in sales launches where developer sales staff generate S&Ps for buyers to sign.

Developers could in practice issue an OTP before S&P.. But that would delay the sales process and can even cause developers to incur opportunity costs as apartment units with issued OTPs cannot be sold to other buyers.

When you receive an option-to-purchase, do check the expiry date as you would need to obtain financing before exercising the options with confidence.

Getting housing loan approvals can sometimes take a lot of time. So you’d want to keep your dates in mind and remind a banker about your deadline when necessary.

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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?

Enter your email below so we can send it to you.

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

Find the best mortgage rates here
VIEW TODAY'S RATES
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