Managing your mortgage can save money

Posted on 3 Dec 2014 | Comments Off on Managing your mortgage can save money

Enquiries from property buyers and investors wanting to buy overseas property has increased 17 percent this year, according to the latest quarterly index compiled by the OverseasGuidesCompany.com.

With some of the lowest mortgage rates in history now available to overseas buyers, and the strength of the British pound, for example, against both the Euro and the U.S. Dollar, it is easy to understand this upward turn.

The organisation has compared mortgage rates across the most popular expatriate destinations to establish where the best deals can be found.

Note that all rates are given as an average. Actual rates will be determined subject to the financial status of the client, the size of the mortgage required, location and type of property and loan to value.

SPAIN
Accounting for 24 percent of all enquiries into the company, Spain remains the most popular destination amongst expats according to the index. There are good repossession properties still available, and mortgage rates on offer from as little as 2.75 percent.

Angelos Koutsoudes, Head of OverseasGuidesCompany.com said: “The IMF recently predicted that Spain will lead the rest of the European Union in terms of economic growth over the next year. Combine that with the low rates and the Spanish government’s on-going commitment to attracting overseas buyers. and you will begin to understand why Spain remains such a popular choice”.

FRANCE
Trailing its neighbour by just a few percent, France has accounted for 21 percent of all enquiries to the company so far in 2014. The evergreen popularity of the nation has been further fuelled by the European Central Bank’s (ECB) interest rate drop introduced throughout Europe, which has made it possible to secure a mortgage in France for as little as 1.80 percent.

PORTUGAL
Rates on offer in Portugal sit slightly higher at 4.10 percent. This is a reflection of the nation’s desire to safeguard its economy now things have started to move in a positive direction once again.

Koutsoudes said: “We have had close to 3,000 enquiries about buying property in Portugal so far in 2014. The Algarve remains a popular choice for expats, especially those looking for a lifestyle change or a buy-to-let investment”.

ITALY
Another country benefitting from the ECB low base rate is Italy, where it is possible to secure a rate of 2.9 percent on a variable mortgage.

Koutsoudes explained: “There has been a reduction in all of the taxes involved in purchasing Italian property. Other reasons for its growing popularity include its lack of inheritance tax and no Capital Gains Tax after five years”.

TURKEY
Buyers can find a mortgage in Turkey for a rate of around 6.40 percent. Despite recent political conflict, 2014 has been a year of significant growth in Turkey, suggesting that financially savvy overseas property buyers haven’t been put off snapping up the readily available bargain properties.

UNITED STATES OF AMERICA
The market in the U.S.has shown great signs of recovery and this looks set to continue with mortgage rates of 3.50 percent being made available to overseas buyers.

AUSTRALIA AND NEW ZEALAND
In Australia and New Zealand, which consistently attract expat buyers, rates of 4.65 percent and 5.85 percent respectively can be secured.

DUBAI
With much of the world’s focus on Dubai and its investment opportunities in the run up to World Expo 2020, rates of 3.99 percent will no doubt continue to attract the attention of buyers from overseas.

Charles Purdy, Founder and Director of SmartCurrencyExchange.com, the currency partner of the Overseas Guides Company sounded a note of caution.

He warned: “It is important that overseas buyers understand the importance of effectively managing their monthly currency transfers for regular payments such as mortgages.

“If you’ve benefitted from these great mortgage rates, the last thing you want to do is end up losing the money that you would have saved yourself as a result of adverse exchange rates or in fees charged by your bank.

“Look for ways to manage this risk, through using a reliable regular payments programme and forward purchasing currency when rates are favourable”.

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Luxury homes face nearly $3m in losses in mortgagee sale

Posted on 3 Dec 2014 | Comments Off on Luxury homes face nearly $3m in losses in mortgagee sale

TWO luxury homes in Singapore are on the market at prices that would mean losses of nearly $3 million each as the local property market continues to weaken.

The mortgagee sale of the two units in Turquoise, a luxury Sentosa Cove condominium, at fire-sale prices comes amid signs that banks are forcing more cash-strapped owners to offload property to meet loan shortfalls.

The units, understood to belong to one owner, are on sale for about $1,600 per sq ft (psf) – an asking price of $4.5 million to $4.6 million apiece, which would mean losses of about $2.7 million each for the 2,777 sq ft units.

Caveats lodged with the Urban Redevelopment Authority showed that both apartments were bought in November 2007 at about $2,600 psf. Current market prices are $2,000 psf to $2,200 psf.

But the losses are still less than those suffered from the sale of two other 2,777 sq ft apartments in the project earlier.

These two apartments in the 91-unit project went under the hammer as distressed sales in July, and were sold for about $1,400 psf. At least one of the units was sold by DBS Bank, sources said.

The units had been bought in 2009 for about $2,550 psf but ended up suffering losses of up to $3.2 million.

Homes are put up for mortgagee sales when financial institutions try to recover their losses after a borrower defaults on a loan.

Experts say luxury homes are more likely to face forced sales, given the large sums involved and the fact that speculators may be involved.

Fewer suburban units are facing mortgagee sales, Colliers deputy managing director Grace Ng said last week.

The lower total price means the owners can pay their mortgage more easily and find buyers if they default, she added.

Mr Tan Tee Khoon, executive director of residential services at Knight Frank Singapore, said defaulting borrowers could have had difficulties selling their properties in the tepid secondary market, while an increased supply of new units in the prime districts means that it is harder to find a tenant.

“Sentosa’s exclusive location makes it less accessible than homes on the main island and harder to lease now,” he said.

“Also, borrowers who default are more likely to have been speculators.”

The property market has been buckling under the weight of cooling measures, with the luxury segment bearing the brunt of the slowdown on the back of dwindling demand and borrowing restrictions.

A total of 98 homes were put up for auction by mortgagees in the first 10 months of the year – far more than the 14 homes in the same period last year.

Housing loans for the third quarter came under close scrutiny as the three local banks released their financial scorecards last month.

DBS chief executive Piyush Gupta said the bank was not seeing any stress in its mortgage loan book. But United Overseas Bank and OCBC Bank posted higher non-performing loans from bad mortgages, attributing the rise to borrowers who bought luxury homes.

UOB disclosed only that the rise in bad home loans was mostly the result of mortgages at one luxury condominium, but Maybank Kim Eng analysts Ng Wee Siang and Ng Li Hiang noted in a report that it was “largely from one key project in Sentosa”.

Meanwhile, two units were put up for mortgagee sale at a Colliers auction last Friday. The three-bedders at The Laurels in Cairnhill had opening prices of $4.1 million and $3.6 million but were not sold.

The Straits Times understands that the units were put up for sale by UOB.

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