Foreigners staying in Singapore for extended periods of time may discover that living in a hotel for the length of their stay can be very costly. The alternative answer to this problem is for the expats to purchase residential properties in the country.

Singapore authorities do not discourage expatriates from buying residential properties in the country.

The Residential Property Act of Singapore essentially supports Singapore nationals in their purchase of their own residential properties by offering reasonable prices. Furthermore, the act enables expatriates who are acknowledged by the government to be capable of of contributing to the financial prosperity of the city-state to acquire residential properties in Singapore.

Expatriates may buy non-restricted residential properties even without prior approval from the Singapore government. Below are specific examples of non-restricted residential properties:

- apartment units within a structure that is not higher than six floors – condo units in approved condo development sites under the Planning Act – a lease contract on a restricted property; the term must not go beyond seven years

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

Likewise, a foreign national without any prior official sanction from Singapore’s Minister of Law cannot acquire residential properties that are categorized as restricted.

Under the Residential Property Act of Singapore, the following are classified as restricted residential properties:

- a vacant residential land – town houses, detached or semi-linked houses, or terraced houses standing on residential lots – lands not approved for condominium development under the Planning Act

The foreigner who intends to acquire a restricted residential property must fill out a form and then send this, together with the requisite supporting documents, to the Singapore Land Authority. This government agency is responsible for receiving the requests of the expatriate regarding the proposed ownership of a restricted residential property. The agency will appraise and approve or disapprove the application, depending on the virtues of the expatriate’s qualifications.

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In Singapore, housing loan packages have two categories: fixed rates or floating (variable) rates.

Singapore fixed rate packages are commonly tendered for up to 3 years, but there are some lenders that go up to 5 years fixed rates or even 10 years. In many Western countries, fixed rates can be made throughout the loan tenure.

On the other hand, floating rates are classified into published rates or board rates. Published rates are mainly rates that are advetised daily, case being the Singapore Interbank Offered Rate (SIBOR) or Singapore Swap Offer Rate (SOR), while board rates are determined by the individual bank or financial institution. Most lenders tie their board rates to certain financial bech marks such as the SIBOR but the precise elements are often vague and variations in board rates tend to be uncertain.

In general, there are no confinements on emigrants getting housing loans in Singapore but do pay attention of the following.

Loan to Value

The maximum loan to value (LTV) in Singapore is 90% of the purchase price or valuation, whichever is lower. Housing loan packages for 90% financing are limited as some lenders do not extend maximum LTV to emigrants. Loan approval for 90% funding is also tighter than for LTV 80% and below.

Proof of Income

To have approval for a housing loan your latest income tax assessment or a letter of appointment from your local employer is necessary. Some local lenders do not respect tax assessments from other countries.

Landed Property

The commendation from Singapore Land Authority is mandatory before emigrants can buy restricted properties such as vacant estate or landed properties such as bungalows, semi-detached, and terrace houses.

In-principle Approval

You may also take an in-principle approval before purchasing. Consider to hire a honored and professional housing loan consultant. This may help you spare time and money with your loan approval.

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Once you decide to take up a mortgage, the immediate matter that tempests your head is choosing between fixed and floating rate of interest. It is easy to get stuck at this point if you are not financially educated.

Usually, when the media splashes reports on banks raising housing loan interest rates in and their impact on Monthly Installments, you may take for granted that it is better to select fixed housing loan rates. In fact, your banker may also advise 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 in reality this is not necessarily the situation.

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

* Read the small print of your home loan document. You will find that the bank has the right to serve you thirty or sixty-days notice period that it intends to increase its interest 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 contract, you can spot clauses 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 lender to undertake appropriate modifications 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 home loan company you can save a lot of money over the life of your housing loan and in most cases the consulting cost is free.

Find out more about a premier Housing Loan advisory firm, providing Housing Loans with free mortgage broking.

When it comes to housing loans, many people do not refinance. A fundamental number are oblivious they have the option of changing their loan to another financier; others are simply indifferent. They stick with their very first lender and the “reward” for such loyalty tends to be higher interest rates. Due to the order of magnitude of housing loans and the tenure that the mortgage is amortized over, the interest we are talking about here can easy stretch from 1000′s to 100,000′s of dollars. Take a look at the following elements to see whether it’s time for you to consider refinancing.

Current Mortgage Interest Rate

It is definitely a positive indication for you to research refinancing when your current interest rate is higher than available loan packages on the market. A first step to take is to go back to your existing bank 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 mortgage lender will charge you a penalty fee, normally a percentage of your outstanding loan value, if you were to fully repay your mortgage. Almost all home loans also come with a clawback period where the lender will claim back “freebies”, such as legal expenses, that they “gave” you when you take up your housing 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 mortgage amount, the greater your savings for the same decrease in interest rates. For example, 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 comprises 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 relatively smaller loan as fixed cost eats into a more substantial portion of your interest rate savings.

Perceived Interest Rate Movements

Your view on how interest rates is moving can be a factor when considering 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 effective choice.

Personal Financial Appraisal

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

Consider calling us today if you are looking for refinancing in Singapore. We can save you a lot of money plus give you the latest advice all for free.

Find out more about a premier Housing Loan advisory firm, providing Housing Loans with free mortgage broking.

Most of the people don’t know that take can change their loan to other investor; others are simply dismissive. They simply become firm with their first lender but they don’t know that it could nring higher interest rates. Because of increasing number of housing loans and amortization period, the interest can range from thousands to hundreds of thousands of money. The following factors may help you consider reinvesting your home.

Current Interest Rate

When your current interest rate is higher than available housing loan packages on the market, it is time for you to consider reinvesting. Ask your bank or financial institution to reprice your loan package. Your lender might give you an offer. 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 Time Periods

When you get a housing loan, there may be a lock-in period wherein your mortgage lender will charge you a penalty fee, maybe a percentage of your outstanding loan amount, if you were to fully repay your loan. Most of housing loans have a clawback period wherein the lender will claim back “giveaways”, such as legal subsidies, that they “gave” you when you take up 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 consumes into a more significant portion of your interest rate savings.

Distinguish Interest Rate Movements

Analyze how interest rates flow. Try a floating rate package as an alternative to fixed rate package if the interest rates are decreasing. However, if you are on floating rates, try to switch in fixed rates if the interest rates are increasing.

Personal Financial Evaluation

Think of reinvesting when your financial states change. Give some thought to take fixed rate package. Think of increasing your loan quantum. When your monthly income increased and you want to decrease interest payments, try to reduce your loan tenure.

Learn more about a premier Housing Loan advisory firm, providing Housing Loans with free mortgage broking.