Morgage property rules
- Thread starter Solidgold
- Start date
Red_Bean_Bun
Well-Known Member
Re: Morgage property rules
As long as the bank can make money out of you - definitely yes.
As long as the bank can make money out of you - definitely yes.
Re: Morgage property rules
Get your mortgage banker to check the current outstanding and latest valuation. If there is residual value then you may do a gear up on existing loan subject to the approval of the bank. You can then use the cash from the gear up to help your sibling purchase. Hope this helps.
Get your mortgage banker to check the current outstanding and latest valuation. If there is residual value then you may do a gear up on existing loan subject to the approval of the bank. You can then use the cash from the gear up to help your sibling purchase. Hope this helps.
Re: Morgage property rules
I am a newbie at this..so gear up means to take a "loan" from the "profit" value of the property?
Meaning.. My mortgage left 200k, my house valued at 1M, give back CPF 200k...my "profit" value is 600k which can be re-mortgaged?
If so, HOH SAY LIAO, I am going to re-mortgage and buy M6 GC M-Performance Competition Package and whatever they can come up with...
Jasonic;1049782 said:
I am a newbie at this..so gear up means to take a "loan" from the "profit" value of the property?
Meaning.. My mortgage left 200k, my house valued at 1M, give back CPF 200k...my "profit" value is 600k which can be re-mortgaged?
If so, HOH SAY LIAO, I am going to re-mortgage and buy M6 GC M-Performance Competition Package and whatever they can come up with...
Red_Bean_Bun
Well-Known Member
Re: Morgage property rules
Everyone did that in the US to get a new ride and renovations / additional extensions to the house - resulted in the financial crisis.
When the housing price crashed - bank asked for top up between valuation and loan amount.
One of the local bank is quite ruthless compared to the others in that situation - so be careful - read the fine prints.
Everyone did that in the US to get a new ride and renovations / additional extensions to the house - resulted in the financial crisis.
When the housing price crashed - bank asked for top up between valuation and loan amount.
One of the local bank is quite ruthless compared to the others in that situation - so be careful - read the fine prints.
Last edited by a moderator:
Re: Morgage property rules
Haha MW, u lawyer how to be newbie..
Anyway just to share my limited knowledge..the gear up portion is subject to haircut depending on the existing bank credit guideline, bank prevailing risk appetite and also repayment ability of the borrowers. .best is check with the mortgage banker for TS.
Hope this above helps..haha.
Haha MW, u lawyer how to be newbie..
Anyway just to share my limited knowledge..the gear up portion is subject to haircut depending on the existing bank credit guideline, bank prevailing risk appetite and also repayment ability of the borrowers. .best is check with the mortgage banker for TS.
Hope this above helps..haha.
Vansoh
Well-Known Member
Re: Morgage property rules
I think you are correct,
valuation of property: 1mil
o/s loan to ABC bank: 200K
CPF used to finance purchase till date: 200K
you should be able to gear up till max of 600K
However, your DSA /DSR computation should also be within the appetite of ABC bank.
the catch here is, if you manage to get the 600K loan this yr and couple yrs later and your property valuation falls to 800K and you start to miss repayment, the bank can repo your property and you gotta slp in your M6
I think you are correct,
valuation of property: 1mil
o/s loan to ABC bank: 200K
CPF used to finance purchase till date: 200K
you should be able to gear up till max of 600K
However, your DSA /DSR computation should also be within the appetite of ABC bank.
the catch here is, if you manage to get the 600K loan this yr and couple yrs later and your property valuation falls to 800K and you start to miss repayment, the bank can repo your property and you gotta slp in your M6
MW;1049790 said:
Re: Morgage property rules
The typical "gear-up" is the form of a term loan that's additional on your existing mortgage. There will be an express clause in the term loan agreement that says the proceeds won't be used to fund another property purchase but there's no possible way to police/track that. If you want to gear up with a different bank, you'd have to refinance your existing mortgage. So if you've got a good rate locked in on your current mortgage, might make sense to go with the same bank for the term loan.
AFAIK there's no maintenance covenant on local mortgages, where you need to top-up the negative equity. So long as you can service the loan the bank doesn't care. They would have buffered in some potential for price downside in the LTV.
The typical "gear-up" is the form of a term loan that's additional on your existing mortgage. There will be an express clause in the term loan agreement that says the proceeds won't be used to fund another property purchase but there's no possible way to police/track that. If you want to gear up with a different bank, you'd have to refinance your existing mortgage. So if you've got a good rate locked in on your current mortgage, might make sense to go with the same bank for the term loan.
AFAIK there's no maintenance covenant on local mortgages, where you need to top-up the negative equity. So long as you can service the loan the bank doesn't care. They would have buffered in some potential for price downside in the LTV.
Solidgold
Well-Known Member
Re: Morgage property rules
Thanks to all for the good advice. I did call up a couple of banks and indeed this is possible. They called it Term Loan. The only caveat is that you cannot redeem the term loan for the a stipulated timeline (eg. 2 yrs) and that means you cannot sell your mortgage property in that "freeze out" period. The interest rate is same as housing loan rates.
I was trying to see if there are options to get my sibling go get the housing loan and I act as a guarantor. This means that I am liable to pay if the monthly schedule repayment is not being service for some reasons or another. I was told that MAS does not allow this for housing loan. This means that if you do not have a steady income, you cannot get a housing loan even if someone acts as a guarantor.
Thanks to all for the good advice. I did call up a couple of banks and indeed this is possible. They called it Term Loan. The only caveat is that you cannot redeem the term loan for the a stipulated timeline (eg. 2 yrs) and that means you cannot sell your mortgage property in that "freeze out" period. The interest rate is same as housing loan rates.
I was trying to see if there are options to get my sibling go get the housing loan and I act as a guarantor. This means that I am liable to pay if the monthly schedule repayment is not being service for some reasons or another. I was told that MAS does not allow this for housing loan. This means that if you do not have a steady income, you cannot get a housing loan even if someone acts as a guarantor.
ktnpl
Well-Known Member
Re: Morgage property rules
Honestly not advisable because a person should buy only what he can afford to avoid carrying a long term burden and he also has to be prepared for life's uncertainties. Insurance will not cover everything. It is still best to have a good dollup of savings in order to be free of the lenders' clutches and be the pilot of your life. Be a lender to the bank, not borrower!
Honestly not advisable because a person should buy only what he can afford to avoid carrying a long term burden and he also has to be prepared for life's uncertainties. Insurance will not cover everything. It is still best to have a good dollup of savings in order to be free of the lenders' clutches and be the pilot of your life. Be a lender to the bank, not borrower!
Re: Morgage property rules
Last night I watched a program on CNA about the poor...there was one family of 5 who had a comfortable 3rm HDB flat and a car then sold the HDB flat and took a hefty mortgage to uplift themselves to a Maisonette. Then fell into debt and eventual bankruptcy cos couldn't service the loan and now stays at a homeless shelter-provided HDB flat master-bedroom where the whole family of 5 is cooped up in that room.
The man of the house blamed govt for his plight saying more should be done to help the poor and homeless like him.
ok......
Last night I watched a program on CNA about the poor...there was one family of 5 who had a comfortable 3rm HDB flat and a car then sold the HDB flat and took a hefty mortgage to uplift themselves to a Maisonette. Then fell into debt and eventual bankruptcy cos couldn't service the loan and now stays at a homeless shelter-provided HDB flat master-bedroom where the whole family of 5 is cooped up in that room.
The man of the house blamed govt for his plight saying more should be done to help the poor and homeless like him.
ok......
Vansoh
Well-Known Member
Re: Morgage property rules
my friend, if your sibling cant afford the resale HDB, don't buy.
banks normally are not interested to have one as a guarantor; they would be interested if you are a co-owner of the property and is jointly taking up the loan. However, the property being a HDB, don't think you can be easily be a co-owner.
my advice, as your sibling to look for other affordable housing option. if donno where to find, look for his/her MP cause govt say HDB are affordable.
my friend, if your sibling cant afford the resale HDB, don't buy.
banks normally are not interested to have one as a guarantor; they would be interested if you are a co-owner of the property and is jointly taking up the loan. However, the property being a HDB, don't think you can be easily be a co-owner.
my advice, as your sibling to look for other affordable housing option. if donno where to find, look for his/her MP cause govt say HDB are affordable.
Solidgold;1050020 said:
Vansoh
Well-Known Member
Re: Morgage property rules
the govt has already done a lot, from 3rm flat for a family to a maisonette, communication between the family members bound to be reduced cause some of them upstairs, some downstairs ... now that they are all coop in a shelter, everyday they can communicate and love each other more!!
SG Govt all the way!!!
the govt has already done a lot, from 3rm flat for a family to a maisonette, communication between the family members bound to be reduced cause some of them upstairs, some downstairs ... now that they are all coop in a shelter, everyday they can communicate and love each other more!!
SG Govt all the way!!!
MW;1050047 said:
Red_Bean_Bun
Well-Known Member
Re: Morgage property rules
Tell KBH his HDBs are only for those with steady income etc meaning his definition of affordability is ambiguous for some people.
Whatever happened to HDB's charter of helping everyone have a roof over their head. Even if have steady income today does not mean have steady income tomorrow. Those with resale flats and loans with banks will experience that ruthlessness inherent with banks versus HDB when they lose that steady income and their CPF runs out.
Since when banks got anything to do with that roof over your head charter.
Guess if there's no steady income then get into the queue for direct sale HDBs and get a loan from HDB. In the mean time focus on career - maybe later if successful may not even consider HDB.
Tell KBH his HDBs are only for those with steady income etc meaning his definition of affordability is ambiguous for some people.
Whatever happened to HDB's charter of helping everyone have a roof over their head. Even if have steady income today does not mean have steady income tomorrow. Those with resale flats and loans with banks will experience that ruthlessness inherent with banks versus HDB when they lose that steady income and their CPF runs out.
Since when banks got anything to do with that roof over your head charter.
Guess if there's no steady income then get into the queue for direct sale HDBs and get a loan from HDB. In the mean time focus on career - maybe later if successful may not even consider HDB.
