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Making sense of home loans

Posted on 24 Sep 2009 | Comments Off

We survey what’s on offer by major banks and discuss key features of the packages. By FELDA CHAY and SIOW LI SEN

WITH the recent home buying spree, one pertinent issue is how to pick the best home loan from among the dozens on the market. What with all the different plans and reams of fine print to go through, the search for the right home loan can often be a headache. Here, online websites can be a boon by making comparison of features easier. Check out smartloans.sg which has details of home loan packages from eight banks – HSBC, Standard Chartered, Rashid Hussein Bank (RHB), Maybank, UOB, OCBC, POSB and DBS.

The fixed rate package from Stanchart and floating rate package from HSBC are currently the most popular among users of the website. And it is constantly trying to add new banks to the list, with talks now ongoing with Citibank Singapore. Smartloans.sg’s chief executive Vinod Nair says he expects the bank’s packages to be listed on the website soon.

While the large variety of loan schemes available may leave many house buyers confused, Mr Nair says that there are a few things to keep in mind. ‘It depends on why you are buying the property. If you are buying it for investment purposes, you should take the floating packages because there are usually no lock-ins for floating rate packages. Also, they are usually pegged to rates like Singapore Interbank Offered Rate (Sibor), which should remain fairly low in the next one to two years,’ he says. Continue reading →

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Posted in Loan / Mortgage / Finance

Tagged Home Loans, Housing Loans, Property Loans, Singapore Property Loan

Don’t overlook mortgage insurance

Posted on 10 Sep 2009 | Comments Off

Your death could cost your family their home if you are not covered, says JASON ONG

RECENTLY, my client Mr Wong called me for mortgage insurance advice. He had just bought a semi-detached house for close to $2 million. He took a loan of $1.2 million over 15 years, and was looking for a mortgage reducing term insurance that will pay off his mortgage in case of his death or total and permanent disability (TPD) while the loan is not fully paid.

Mr Wong told me that he will never forget the time that he and his younger siblings lost their family home when his father died of a heart attack some 30 years ago, leaving his mother struggling to raise the four of them.

Certainly, he does not want this to happen to his homemaker wife and three children.

‘When I pass away, the last thing that I would want to put my family through is to also lose the roof over their heads,’ he said.

In Singapore, mortgage insurance is not made compulsory for private property owners and those who are not using CPF to pay their monthly HDB housing loan repayments. However, the Home Protection Scheme, or HPS, is mandatory for HDB/HUDC flat owners who service their mortgage loans with CPF funds.

Many private property owners baulk at mortgage insurance either because of inertia or misconception that it’s an unnecessary cost. Without mortgage insurance coverage, however, life could be a lot harder financially for the family if things go wrong. Continue reading →