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Mortgages can take up a huge bulk of your budget. After all, you’re not dealing with a very small amount. The good news is with proper planning and good tips you will find you repayments comfortable to your pocket.

Boost your mortgage repayments with these handy tips:

1. Find a good mortgage broker. Mortgage brokers deal with various banks. It should be that they don’t limit your options to only a handful, worst to only one bank. You should have at least 3 to 4 mortgage packages to choose from, each explained thoroughly. Also, brokers receive their fees from the banks, not from you. Remember that.

There are no rules or laws that govern the actions of mortgage brokers. However, before they can do business, they should receive a letter of agreement from banks. These banks, moreover, should be registered and approved by the Monetary Authority of Singapore.

2. Check the subsidies. A lot of the Singapore loans come with subsidies. This means the bank pays a portion of the fees. But they do come with caps. For instance, with legal fees, the maximum subsidy can be $2,000. In this case, you have to pay for whatever difference. The higher the cap, the more advantageous to you since you pay less from your own bank account.

3. Be mindful of your lock-in period. During the lock-in period, you’re not allowed to change the terms and conditions of your mortgage contract. Otherwise, you will have to pay for penalties. It should be one of your considerations. First do you have a lock-in period? How long is it going to be? Does it match to the time you’re planning to sell your home? How much will be the penalty. At most, you pay 1.5 percent, which is already huge.

4. Increase your deposit. The mortgage doesn’t cover the entire cost of the property. The highest will just be 80 percent of the total loan amount. This means you have to find 20 percent elsewhere. Nevertheless, if you wish to reduce your repayments in the coming years, increase your deposit from 10 to around 25 to 40 percent. It will also be easy for you to get a mortgage since banks don’t have to fear about taking a huge risk on you.

5. Lower your debts. Your debts can affect how much loan you can apply from the bank. This is because they implement the so-called debt servicing ratio. They take into account your long-term loans, such as car loans or educational loans, then divide the number by your monthly salary. Target 35 to 50 percent to obtain good loans from banks.

6. Pay off on time. Like credit cards there are corresponding charges if you don’t pay off your monthly repayments on time. To reduce the chances of paying more than you should, as well as to prevent damaging your credit rating, pay your mortgages at the right time.

You can actually tie your mortgages to your bank account. When it’s time to make a repayment, the money will automatically be deducted from your savings or current account. This way, you don’t forget about it. Just monitor your bank balance to ensure you have sufficient funds to support the repayment. If you don’t and you have a current account, you may have to pay for the overdraft fee.

7. Don’t settle for the minimum. If you have extra money, you better use it to pay off your large debts such as your mortgages than for something else. The purpose here is to speed up your repayments. By cutting the payment period, you can save a lot of money from your interest repayments.

8. Know when to apply for refinancing. There are instances where refinancing is not a good idea, but you may still want to keep it an option. Refinancing is good especially if you like to reduce your interest rates. You could be in a fixed interest rate, and you wish to go for variable interest rate since the prevailing SIBOR (Singapore interbank offered rate) has gone down.

You may also like to apply if you want to speed up the repayments through a loan with shorter payment period.

9. Be careful with interest-only loans.

Some lenders may offer with interest-only loans. At first it sounds great since you can save a huge chunk of money every month. Principal is not included in the calculation. However, by the time you have paid all the interest, your debt is still there, which means more repayments from you. It’s also common for lenders to give you very high interest rates.

Be mindful of your mortgages. Banks can repossess the property, leaving you with no home and a lot of debt. If you want to know how to manage your funds more effectively, you can participate in a debt management program.

There’s not much difference between mortgaging in Singapore and anywhere else in the world. Nevertheless, little ideas wouldn’t hurt.

Before you apply for private home loan, make sure you can make a thorough research. How much does a property cost in Singapore? Plenty of homes and apartment or condo dwellings are expensive, but it may not be if you’re an expat. You also have to decide where you’re going to borrow your cash.

There are several lenders operating in Singapore, but not all of them are trustworthy. Stay away from those that ask for any kind of payment even when you’re just requesting for a quote. You should only pay when your application is approved. By then, you need to shoulder the financing costs and down payment.

Speaking of down payment, some countries like the United States would opt for a 20 percent down payment from the total purchase price of the property. In Singapore, it can vary. Some lenders would be okay with 10 percent, while the others demand for as much as 95 percent down payment. You will already have excellent private home loan deals such as lower interest rates if your down payment is between 25 and 40 percent.

Requirements can also depend from one lender to another. Usually, you will have more limitations if you’re a non-resident foreigner. For example, you cannot borrow more than 1 million SGD. It’s also important you can present a good credit rating. Reports are available normally for free depending on which country you’re from. Lenders base their rejection and approval of applications, as well as interest rates, on credit risks.

There are a number of loans you can apply, but there can be two general types. You have the loan for purchase of property. This means it’s your first time to obtain the home or condo unit. The second one is a loan for refinancing, which you can apply such as when you want to reduce your existing interest rate.

Lenders can present various marketing strategies to lure you to apply loans with them. Watch out for very low interest rates as there may be hidden costs or the finance charges are very high.  

The Typical Types of Properties Found in Singapore

But first thing first, its always important to get a mortgage insurance in singapore if you are going to take a huge mortgage loan before burdening your family when you die

So what types of properties can you rent or purchase if you’re in Singapore? Well, there are actually many.

Majority of the houses are called public housing. They are the ones that are planned and regulated by the HDB or the Housing and Development Board. They are also the residences of over 75 percent of the population. They are normally form small communities, with schools, transport, health care facility, and other basic services.

If you want to save on your flat, it’s best to start looking for them first, as their cost will rarely go beyond a thousand dollars. Moreover, you have several types of flats to choose, from one-bedroom to five bedroom. You may even find a mansionette, with rooms composed of two levels.

Those who are living in the busier districts are in apartments and condominiums. At first glance, you cannot tell the difference as they’re often described as skyscrapers. However, they are different in the sense you get a lot of services and facilities from condominiums. Only a few, though, can afford them as they are worth around 10,000 dollars. Apartments normally don’t have shared amenities, though they can offer 24-hour security.

There are also landed properties, but they don’t come very often. Knowing how small Singapore is, the government is apprehensive of building individual houses in a very limited land.

Nevertheless, if you truly value your privacy and you’re most likely staying in the country for good, these homes are going to be very good investments.

A lot of these landed properties are bungalows or detached homes, semi-detached houses, and terrace houses.

You may also find some of the homes that are very old. They are the ones that are usually aspired—and coveted—by the expats because of their very unique architectural design, story, and location.

You have the colonial houses, which are easy to spot since they almost have the same look and structure. They are painted white and are made of black wood. Some of the terrace houses have been built during Singapore’s pre-war. They bear Chinese influence.

Before you settle for a property, compare the price, location, and features. This way you’re getting something worthy of your money. cke

Considering Investment Linked Saving Plans

Investment linked savings plans are basically what the term implies—saving accounts or plans with earnings dependent to the performance of their investment product. It can offer account holders amazing financial gain. On the flipside, it can also offer the account holder nothing; it really depends on the performance of the investment product, something you have no control over.

This kind of investment option does open up a number of benefits usual investment options cannot provide. For instance, even if the investment does not perform well, the account holder stands to get his principal deposit back. As you may know, this isn’t the case with usual investments, wherein you can lose all your assets if your investment product does not perform well. Of course, the option isn’t foolproof, at least in terms of speculative earnings. In terms of security, a fixed deposit account or even a saving account is the better choice. But in the end, it is a viable financial savings option, especially for those looking for serious returns from their savings.

So what are the factors you should consider when opening an investment linked saving plan?

Link

First off: consider the investment product linked to your account.

The investment product of an investment linked savings plan actually differs from financial institution to financial institution. For instance, some banks weight the performance of the investment across various sectors. In one bank in Singapore, the performance of the investment is weighted across gold, property, and developed and emerging equity markets equally. This makes the investment less predictable, giving the product more room fail—but, at the same time, more room to succeed as well.

Some banks, on the other hand, will allow you to choose a specific sector. In another bank in Singapore, an interested account holder can choose from four different sectors: specifically, foreign currency, gold, bond, and stock market. With the investment concentrated on only one sector, the account holder can choose intelligently according to current market and financial indicators.

A good question that may rise from these facts: which is better, the sector-specific saving plan or the general investment linked saving plan? Sector-specific plans are ideal for those who are already adept in the specific area, only because this gives them an edge when it comes to personal forecasts. Otherwise, the general saving plan allows for a more adequate buffer when it comes to investment performance. A general-sector investment is more different to predict, but take note that predictions and forecasts during the term of the plan are already useless.

Maturity date

Another important factor to consider here is the maturity date.

The maturity date is the time when you can withdraw your deposits and your earnings, if any. Unknown to many, the specific market indicators only matter depending on your decision. In general, the market figures now would not really be relevant if you plan to open a long term investment linked saving plan. For instance, in America, those who made long term investment commitments in 2007 (before the economic crunch reared its ugly head) lost speculative earnings since they thought the economic bubble wasn’t going to burst.

This doesn’t mean you should not consider market forecasts and indicators. In fact, you should at least be knowledgeable about the recent financial trends and movements in your sector. However, this also says that it’s a completely unpredictable financial option.

Terms and agreements

Different banks and financial institutions have different terms, so it’s wise to take note of these.

Although the general concept of this plan is to give you earnings from the floating interest and performance of your investment, some banks offer a minimal interest rate on top of this. This set up is not the usual set up; in fact, it’s probably rare. But just the same, it’s a viable option to look into, especially if you’re looking for a more stable saving option.

Some banks also have a specific maturity period for the saving plans (usually six months), with the longer plans having different terms. Make sure the terms of your plan remain to be reasonable vis a vis your plan’s maturity period.

The redeem clause is also an important factor to look into. This clause will allow you to withdraw your savings before the pre-determined maturity date. Technically, this has nothing to do with how much you earn and how you earn it. However, in case you suddenly need to access your funds, this can be lifesaver. Look for banks that allow a no-deduction pre-maturity date withdrawal, although a minimal deduction is good enough.

In the end, it’s really matter of you deciding why you need to invest. What are your financial plans? How much do you need to earn? Are willing to risk the money you could earn from a more stable saving plan?  Make sure your investment objectives are clear and you would do no wrong.