Current Interest Rate

If your latest interest rate is higher than other housing loan packages, consider reinvesting. Go back to your current bank or financial institution and ask them to reprice your loan package. Most likely, your lender will give you an offer, which is better than your current one. Make a comparison between this offer and with offers from other lenders to see whether you should switch or stay put.

Lock-in and Clawback Periods

Lock-in period is when your lender give you a penalty if you want to fully repay your loan. Many housing loans have drawback period. This is when the lender will take back what they gave you when you get your housing loan. Lock-in period is different from clawback period. Thus, it is not advisable for you to reinvest due to these extra costs.

Loan Quantum

The higher the amount of your loan, the greater your savings for the same decrease in interest rates will be. However, fixed cost to reinvesting, which comprises mainly of legal fees, does not vary much with loan quantum. The difference between your current and reinvesting interest rates has to be larger for a relatively smaller loan as fixed cost takes into a more considerable part of your interest rate savings.

Identify Interest Rate Movements

Your analysis on how interest rates are moving can be a factor when considering whether you should reinvest. Try a floating rate package as an alternative to fixed rate package if the interest rates are decreasing. Conversely, if you are on floating rates and believe interest rates are increasing, switching to fixed rates may be a good choice.

Own Financial Evaluation

Try to get a fixed rate package. Consider increasing your loan quantum. When your monthly income increased and you want to decrease interest payments, try to reduce your loan tenure.

In Singapore, expats are not restricted by government authorities from acquiring their own residential properties.

Basically, the Residential Property Act of Singapore encourages Singapore citizens to buy residential properties in the country at reasonable rates. In addition, this act encourages expatriates who are recognized by the Singapore government to have made significant contributions to the economic prosperity of the city-state in their desire to acquire residential properties within Singapore.

Non-restricted residential properties can be acquired by expatriates even without prior approval from the Singapore government. The following are residential properties that belong to the non-restricted class:

- apartment flats within a structure that is not more than 6 floors in height – condo units in authorized condominium development sites included in the Planning Act – a lease contract on a restricted residential property; the term should not go beyond seven years

Expatriates who want to own all units in an apartment or condominium in an accredited development site have to have prior sanction from Singapore’s Minister for Law.

In the same vein, a foreign national who has no prior approval from Singapore’s Minister of Law cannot own residential properties that are classified as restricted.

The following are considered restricted residential properties by the Residential Property Act of Singapore:

- a vacant residential lot – town houses, separate or semi-detached homes, or terraced houses built on residential lands – lots not authorized for condominium development under the Planning Act

In applying for an official sanction to be able to acquire a restricted residential property, the foreign national must fill out a form and, along with the required supporting papers, send this to the Singapore Land Authority. The Singapore Land Authority is responsible for appraising and issuing approval for the merits of an expatriate whether he or she will be qualified to acquire a restricted residential property.

The Freddie Mac and Fannie Mae organizations normally influence how mortgages are set up, but this is not true for a subprime home loan. In this type of loan, interest rates can be as high as the lender pleases, and they can include any kind of fine print that they want. For this reason it is always necessary to read your agreement papers toughly. It would be worthwhile to take the papers to your attorney if you have one.

A subprime house finance loan is usually too risky for the one who borrows it. Many people having bad credit score and low income get loan these days, but the financing company ensures that they make profit out of it. This is done by keeping the rates of interest very high and by including several hidden charges.

There are however certain benefits of getting a home loan. Under circumstances when your credit is so bad that no other financers are ready to lend you money, but you have money to easily pay the monthly installments, you can opt for the subprime home loan. Getting your credit score back on the track may take several years, and there are times when you need money urgently. You can later improve your credits by making timely payments and getting your loan amount refinanced.

If you are in a situation like this then your finance agent may propose you a subprime home loan. If you later feel that your loan arrangement is not beneficial for you, then you can get your loan refinanced. However, you will not be bale to do this if your actual interest rates are mentioned in your original documents. This is so because the rates are so high that it is almost impossible to get a refinance and you may have to bear the burden of the high rates yourself.

The best way to keep away from getting duped with a bad plan, and get a suitable one is to fid a reliable and good loan agent. Before finalizing a broker to manage your loans, you may have to look around and meet quite a few different agents. This will help you in gathering enough information about their practices so that you can choose the one who is more likely to give you the best deal. You can inspect about a specific agent by looking for their name online, at the Better Business Bureau, or by making a call at the organization that they work for.

Get a subprime loan only if you are certain that it is the most suitable choice for you. Your agent will inform you about diverse other ways to get a loan on the basis of your financial condition. Don?t hurry and take enough time to explore all options and different types of loans available. Also ensure that you read the agreement well before accepting it.

Usually, when the media splashes reports on banks raising home loan interest rates in and their impact on Monthly Installments, you deem it better to select fixed home loan rates. In fact, your banker may also suggest you to go for the same.

Now ideally as it should be, we assume that once you select fixed rate plan for yourself the rate of interest will continue unchanged for the entire period you have fixed the interest rate for irrespective of any subsequent increase in the same. But actually this is not necessarily the case.

Here we demystify the nature of fixed interest rate housing loan transaction for you so that you can make an informed decision over the subject.

* Check the small print of a loan. The bank has the right to give you 30 or 60-days notice that it intends to increase its rates.

* The bank’s first-year rates are binding on the bank only for that short period of 1 or 2 months. The 2nd-year home loan rates are not binding at all. Neither are the bank’s 3rd-year loan rates.

* Force Majeure Clause

So, while you read your home loan agreement papers, you can spot statement like this:

“Provided further that from time to time, the bank may in its sole discretion alter the rate of interest suitably and prospectively on account of change in the internal policies or if unforeseen or extraordinary changes in the money market conditions take place during the period of the agreement.”

This is called Force Majeure Clause that enables the bank to undertake appropriate changes in the interest rates on home loans they sanction to their borrowers.

So remember to look at refinancing every couple of years so that you do not pay too much. If you select a good housing loan company you can save a lot of money over the life of your housing loan and in most cases the consultation cost is free.

Current Mortgage Interest Rate

It is definitely a positive indication for you to explore refinancing when your current interest rate is higher than available home loan packages on the market. A first step to take is to go back to your existing banking company or financial institution and ask them to revise your package, otherwise known as repricing. If your lender comes back with an offer, it will normally be better than your existing one. You can then compare this offer with offers from other lenders to see whether you should switch or stay put.

Lock-in and Clawback Periods

When you take up a housing loan, there may be a lock-in period where your housing lender will charge you a penalisation fee, commonly a percentage of your outstanding loan value, if you were to fully repay your mortgage. Almost all loans also come with a clawback period where the lender will claim back “freebies”, such as legal subsidies, that they “gave” you when you take up your loan (Note: lock-in period is separate from clawback period). It may not be valuable for you to refinance due to such costs.

Loan Quantum

The larger your home loan amount, the greater your savings for the same reduction in interest rates. For instance, 1% on a loan of S$100,000 is much less than 1% on a loan of S$500,000. However, fixed cost to refinancing, which represents mainly of legal fees, do not vary much with loan quantum. The difference between your current and refinancing interest rates, therefore, has to be bigger for a comparatively smaller mortgage as fixed cost eats into a more fundamental part of your interest rate savings.

Perceived Interest Rate Movements

Your view on how interest rates is moving can be a factor when thinking whether you should refinance. If you are currently on a fixed rate package and believe interest rates are dropping, you may want to refinance to a floating rate package. Conversely, if you are on floating rates and believe interest rates are rocketing, converting to fixed rates may be a positive choice.

Individual Financial Appraisal

If there is a change in your financial state, you may want to vary your package details via refinancing. For example, you are beginning your own business and do not want volatility in other areas. Give some consideration to taking up a fixed rate package. Maybe you want cash to invest in another property. Consider increasing your loan quantum. Or your monthly income has increased and you want to minimise interest loan payments. Consider reducing your loan tenure.

If looking through this article is giving your a headache or you simply want to save yourself the trouble, contact us for a non-obligatory mortgage interview. Our professional consultants not only frees up your time but also do not charge any fees to help you get the best deal. Refinancing does not have to be a tedious procedure.

They can represent an ideal solution, and many people have already taken advantage of the benefits that they offer. That’s not to say that they are right for everyone though, which is why it is important to research the ins and outs of them before making a decision.

A reverse mortgage can be explained most simply as a type of home equity loan for which no repayment is necessary until the homeowner dies, sells the property, or no longer uses the property as a permanent residence.

They are generally easily obtainable for senior citizens, since the eligibility process does not consider the homeowners income or any credit scores.

There are stipulations for eligibility, including:

- The homeowner must be at least 62 years of age

- The house must be either paid in full or with just a small balance left on the mortgage

- Taxes, homeowners insurance, mortgage insurance, and a hefty closing fee, must be paid by the homeowner

- The homeowner must attend a counseling session to ensure that they completely understand the reverse mortgage process

What happens with a reverse mortgage is pretty simple to understand. A loan is obtained based on the equity in the home, with disbursements available in three different forms. The amounts of the loans will vary, depending on the value of the home and the equity therein.

The homeowner can opt to receive monthly payments, a line of credit or a single lump sum payment; whichever suits their needs best. The funds received by the homeowner can be used in any manner he/she desires; paying bills, making home improvements, taking a trip or any other purpose.

No repayments are made in reverse mortgages for seniors. That is to say, no repayment for as long as the homeowner makes the home their primary residence and is still alive. Repayments need only be made in the case of the following occuring…

- Death of the homeowner

- The property is sold by the homeowner

- The homeowner permanently leaves the property; i.e., taking up residence in a nursing home, with a family member or hospice facility

In many cases, a reverse mortgage is a benefit for its recipients. It should be noted, however, that there is a large closing fee due when the mortgage papers are signed; larger than the costs associated with a traditional mortgage.

Reverse mortgages for seniors are not a decision to be taken lightly and, as with all financial decisions, all paperwork should be closely examined before making a commitment. Don’t let the paperwork put you off though as professional assistance and counseling is available.

The first thing you should look at when choosing a mortgage is the interest rate, but after that, the fees associated with acquiring the mortgage are extremely important as well. There are mortgage companies that may have hidden fees that will not be communicated to you until the time of closing, so the more research you do related to the fees the better. The last thing you want is to be at the closing and have the mortgage company surprise you with this unanticipated expense, which can be quiet costly. Mortgage companies are required to provide you with an estimate before you agree to the loan, and the estimate must be close to the actual expenses when you close on the home or refinancing. This will not stop some companies though from taking advantage of you when you are in an extremely vulnerable position.

If you currently own a home, and are happy with the rate that you have then the only reason to refinance your mortgage is if you are in need of extra funds. It is wise, in this case, to research home equity rates, that make funds available to you for anticipated expenses. The funds that you receive from a home equity loan can be used for any number of reason, from purchasing a new car, to renovating your home. What you spend the funds on is your choice, but you should remember that you are mortgaging your home for this expense, and using up most of its equity by doing so.

Home equity lines of credit are becoming increasingly more difficult to acquire, due to the current economic climate in the country. The line of credit is similar to a credit card you can take out, using your home as collateral. Due to the trouble that the banks have been in though, the home equity lines of credit are almost non-existent now. The home equity loan is more common today, and is much easier to get.

Whether you are obtaining a mortgage or a home equity loan, the lender will require that specific limits of a homeowners policy be in effect and that the lender be named as first loss payee. This insures that in case of loss, the lender will be the first one paid from the homeowners policy value and the remaining insurance will be payable to the homeowner. Every bank or lending institution will require that this be done prior to closing because it is how they protect their investment. The homeowner is second in line after the financial institution.