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Thread: Think about your current mortgage before refinancing

  1. #1
    Join Date
    Aug 2008
    Posts
    63

    Default Think about your current mortgage before refinancing

    By: Zeng Han Jun, CPCG, Singapore



    There are many different reasons why home owners want to refinance. Some want to go for a lower interest rate, some want a fixed rate and others want to tap on the equity of their house.

    Whatever that reason may be, remember that making even the slightest change to your mortgage can affect your current finance greatly. Make the right decision and you can live in peace with that new mortgage for the next few years.

    Take a look at your interest rate



    Do not be surprised that many people often lose track of their mortgage’s interest rate few months after the closing. People just pay, pay and pay their monthly installments without checking because they are too caught up in their work. It will be too late by the time you realized that monthly debt installments exceeds your current salary. Do not rely on your financial advisors or private bankers to remind you about your mortgages. Turnover rate in the banking industry is extremely high. Your private banker might just become a car salesman months after he just helped you with a transaction – just a statement, no harm intended! Try to set a reminder in your hand phone or organizer, telling you to take a look at your interest rate once a year.

    SIBOR, SOR, CPF or Board Rates?



    Different kinds of mortgage products are sprouting from the banking industry and that makes choosing a mortgage a tad more difficult than before. You have different kinds of benchmark rates: SOR, SIBOR, CPF and Board Rates. Which one should you take? Ultimately the decision lies with you. Different kind of rates displays unique behaviors. Some are more stable, and some sloshes up and down in a matter of months. Maybe you prefer a stable interest rate, but it may so stable that it does not adjust downwards when all other rates are going down. Think about this for a moment…

    How long are you going to stay in this home?



    This is a VERY IMPORTANT factor that must be considered before taking up of any mortgages. Will this house be your retirement home? Having a hunch that you will be gaining a hefty profit margin from this house few years down the road? Being very clear on this issue will enables you to make a decision on how you want to structure your loan. If you think it will turn out to be a good investment, why not try going for an interest only mortgage?



    -------------
    This article from CPCG is currently being protected by Singapore and International Copyright Laws. However please feel free to republish this article, provided that you include working links to our website: http://www.cpcgonline.com and http://www.cpcgonline.blogspot.com. We appreciate your kind gesture. For any enquiries, please email us at [email protected].
    -------------
    Join us at the latest real estate online club TODAY! REAL ESTATE AND PROPERTY INVESTMENT ClUB is a social network catered for the real estate professionals, investors and bankers. An online social network for the real estate community to come together to leverage on each other's relationships and expertise. Join us at http://www.repic.socialgo.com
    Mortgage Advisory and Brokering Services
    http://www.cpcgonline.com

  2. #2
    Join Date
    Jun 2009
    Posts
    136

    Default

    very 'useful' advice...

    very very entry level...yet got copyright????

    i also can be financial advisor


    Quote Originally Posted by Zeng Han Jun
    By: Zeng Han Jun, CPCG, Singapore



    There are many different reasons why home owners want to refinance. Some want to go for a lower interest rate, some want a fixed rate and others want to tap on the equity of their house.

    Whatever that reason may be, remember that making even the slightest change to your mortgage can affect your current finance greatly. Make the right decision and you can live in peace with that new mortgage for the next few years.

    Take a look at your interest rate



    Do not be surprised that many people often lose track of their mortgage’s interest rate few months after the closing. People just pay, pay and pay their monthly installments without checking because they are too caught up in their work. It will be too late by the time you realized that monthly debt installments exceeds your current salary. Do not rely on your financial advisors or private bankers to remind you about your mortgages. Turnover rate in the banking industry is extremely high. Your private banker might just become a car salesman months after he just helped you with a transaction – just a statement, no harm intended! Try to set a reminder in your hand phone or organizer, telling you to take a look at your interest rate once a year.

    SIBOR, SOR, CPF or Board Rates?



    Different kinds of mortgage products are sprouting from the banking industry and that makes choosing a mortgage a tad more difficult than before. You have different kinds of benchmark rates: SOR, SIBOR, CPF and Board Rates. Which one should you take? Ultimately the decision lies with you. Different kind of rates displays unique behaviors. Some are more stable, and some sloshes up and down in a matter of months. Maybe you prefer a stable interest rate, but it may so stable that it does not adjust downwards when all other rates are going down. Think about this for a moment…

    How long are you going to stay in this home?



    This is a VERY IMPORTANT factor that must be considered before taking up of any mortgages. Will this house be your retirement home? Having a hunch that you will be gaining a hefty profit margin from this house few years down the road? Being very clear on this issue will enables you to make a decision on how you want to structure your loan. If you think it will turn out to be a good investment, why not try going for an interest only mortgage?



    -------------
    This article from CPCG is currently being protected by Singapore and International Copyright Laws. However please feel free to republish this article, provided that you include working links to our website: http://www.cpcgonline.com and http://www.cpcgonline.blogspot.com. We appreciate your kind gesture. For any enquiries, please email us at [email protected].
    -------------
    Join us at the latest real estate online club TODAY! REAL ESTATE AND PROPERTY INVESTMENT ClUB is a social network catered for the real estate professionals, investors and bankers. An online social network for the real estate community to come together to leverage on each other's relationships and expertise. Join us at http://www.repic.socialgo.com

  3. #3
    Join Date
    Apr 2009
    Posts
    137

    Default

    Moral of the story is don't borrow money.... pay full in cash!

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