Here are some
tips on taking a housing loan. Do not borrow to the limit. Have some margin to allow for future increase in interest rate. Have some spare savings in case you lose your current job. Ask your bank to give you a special term to defer repayment for up to 12 months in the event of loss of employment.
Couple of years ago, I took a HDB loan for my resale HDB EM from UOB. This is on the intention of selling my HDB EA.
ReplyDeleteWhen I approached UOB HDB loan executive, she encouraged me to take out a maximum loan to take advantage of the 0.4% lawyer rebate cap at $1,500. Had I took up her advise, I will be paying $900 interest per month of a total $1,500 monthly payment.
Generally, my conclusion is Banks are only interested in maximizing profit and not the customer's interest. Do be very careful. Your money is your interest and no one else.
My rule of thumb -> Borrow from HDB as much and as long as possible. Borrow from Private bank as little and as short as possible.
may i add that the purchase price of the home should be ard 5 to 7 times of annual (combined) salary..
ReplyDeletedo not be a debt slave to the bankers and agents... these ppl will only look out for their own pockets.. of coz, they want property prices to increase, they make bigger commissions and profits, but can homebuyers afford homes without being slaves?
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If you can do a partial repayment without penalty after taking the max of loan quantum of 80% then enjoying the legal subsidy of 0.5% of loan amount up to max 2.5k will not be a problem.
ReplyDeleteHousing loan from HDB is a history now same like our used-to-be people's bank, POSB.
I choose to take up my private housing loan from HSBC though POSB can match HSBC's terms and conditions. Why should I give business to POSB?
If DBS can sell High Notes 5 to S'poreans, why should we give business to DBS?
As my intention was to pay off my acquired resale HDB EM, I took a no-penalty variable interest loan. The deal was 3.25% first year, 3.5% second and 3.75% third.
ReplyDeleteGoing into the second year, my interest hit 4.25% due to the booming economy. So my take is the above deal is good for marketing and once it started running, UOB just move up the interest rate. Even though saving rate has fallen, my interest is still >4%.
Not a big deal though as I only owed them <$2k with $20 monthly payment through CPF. It is a blessing not to have this mortage burden especially during this downturn...