Need advice on choosing SOR or Sibor package

[evergreen]

This Bank of China package which give u flexibility of switching between SOR and SIBOR, look quite attractive:

http://imcmsimages.mediacorp.sg/CMSF...0807SUF023.pdf

1st year: 3M SIBOR/SOR +0.55%
2nd year thereafter: 3M SIBOR/SOR+0.75%

Free fire insurance, legal subsidy,etc

2years lock in...

Very aggressive...., worth a look

Thanks for the info!
If we only consider the rates, it's competitive. The rate you stated is for loans >$0.5M.
For <$0.5M, the rate is 3M sibor/sor + 0.75% which is the same as Package A. But package A has no lock in so I'd rather go for Package A.

I don't know whether the CIMB rates applicable for uncompleted property.
The article also doesn't state the cancellation and pre-payment charge.

can anyone share what is the best rate now with no lock in?

For floating rate, uncompleted property, <$0.5M loan, given the SOR and Sibor rates as of today, it would be Package A.

[DC33_2008]

Lock-in for SOR and SIBOR is too risky.

[amk]

Lock-in for SOR and SIBOR is too risky.

Why ? What's wrong with benchmark rates ?

[radha08]

Hi CondoSearch,

Thanks for sharing!

I asked for rates from all the banks (I'm kiasu ), compared the rates and learnt the terms myself by reading blogs and forums like these.

You were lucky to meet a mortgage broker who knows his stuff. I tried contacting one but he appeared to be just a middleman who passes on my documents to the banks, and after that I have to liaise with the banks myself.

yup nowadys so many of these refinancing agents middleman around just pass ur documents to the bank...

[DC33_2008]

One can get better deal if work with the real estate agent on loan package as banker will give the agent a cut on commission if you go through them rather than to the banker directly.

yup nowadys so many of these refinancing agents middleman around just pass ur documents to the bank...

[CondoSearch]

Hi CondoSearch,

Thanks for sharing!

I asked for rates from all the banks (I'm kiasu ), compared the rates and learnt the terms myself by reading blogs and forums like these.

You were lucky to meet a mortgage broker who knows his stuff. I tried contacting one but he appeared to be just a middleman who passes on my documents to the banks, and after that I have to liaise with the banks myself.

yes, i did the same initially but not from all bank though nonetheless still fell overwhelmed by the information furthermore I'm not very savy come to T&C. and almost left out some good deal if not because talking to the guy i mentioned. luckily he is not a postman ..he very responsive till i felt paiseh cos i have a time constraint for my option exercise, so keep shooting email to him till 1am+ and he just responded to my messages even late at night and patiently explain to me the information, i really slut him and really got a good deal thru him...

hmh! sorry guys, you may have thought i promoting this middleman but just want to share with you alll as he really did a good job for me...

Anyway, I believe you decided with the package by now, seems your package A still the best so far unless the Bank of China offer the package for <0.5mil ...

btw, different person or banker somehow might result in a bit different of the offer package even from the same bank from what i have learnt...if have time search as much as info you can...good luck!

[CondoSearch]

One can get better deal if work with the real estate agent on loan package as banker will give the agent a cut on commission if you go through them rather than to the banker directly.

haha! hope you are not agent and you might be right but my agent somehow good in what she is doing, come to bank loan my agent mearly a postman...

[newbie11]

thats bcos agents are different..thats their rice bowl. i am a mortgage broker, so i know what is gd service. and thats the difference i make. otherwise i might as well become a prop agent. refer, shake leg, get comm.

[newbie11]

This Bank of China package which give u flexibility of switching between SOR and SIBOR, look quite attractive:

http://imcmsimages.mediacorp.sg/CMSF...0807SUF023.pdf

1st year: 3M SIBOR/SOR +0.55%
2nd year thereafter: 3M SIBOR/SOR+0.75%

Free fire insurance, legal subsidy,etc

2years lock in...

Very aggressive...., worth a look

i got better spread for my client with >1m loan.

[land118]

i got better spread for my client with >1m loan.

yes, probably 2nd year and after 0.65%

[evergreen]

One can get better deal if work with the real estate agent on loan package as banker will give the agent a cut on commission if you go through them rather than to the banker directly.

I don't understand the logic. If the banker needs to give the agent a cut, why would the bank give you a better rate.

yes, i did the same initially but not from all bank though nonetheless still fell overwhelmed by the information furthermore I'm not very savy come to T&C. and almost left out some good deal if not because talking to the guy i mentioned. luckily he is not a postman ..he very responsive till i felt paiseh cos i have a time constraint for my option exercise, so keep shooting email to him till 1am+ and he just responded to my messages even late at night and patiently explain to me the information, i really slut him and really got a good deal thru him...

hmh! sorry guys, you may have thought i promoting this middleman but just want to share with you alll as he really did a good job for me...

Anyway, I believe you decided with the package by now, seems your package A still the best so far unless the Bank of China offer the package for <0.5mil ...

btw, different person or banker somehow might result in a bit different of the offer package even from the same bank from what i have learnt...if have time search as much as info you can...good luck!

I was underwhelmed by the lack of T&C's! Especially cancellation charges and prepayment penalties, clawbacks, closing fees, etc.
I confirmed on Package A. I couldn't find anything better.

[DC33_2008]

Agent co-share the commission with the owner as owner brought a deal to the agent. Did not read the earlier mails. Which bank is offering Package A?

I don't understand the logic. If the banker needs to give the agent a cut, why would the bank give you a better rate.



I was underwhelmed by the lack of T&C's! Especially cancellation charges and prepayment penalties, clawbacks, closing fees, etc.
I confirmed on Package A. I couldn't find anything better.

[evergreen]

That's a one-off "rebate" privately arranged between agent and borrower, not a better (interest) rate offered by bank. Not the same.

[DC33_2008]

Just need to put in money to be a private banking customer and you can get better deal.

That's a one-off "rebate" privately arranged between agent and borrower, not a better (interest) rate offered by bank. Not the same.

[CondoSearch]

I don't understand the logic. If the banker needs to give the agent a cut, why would the bank give you a better rate.



I was underwhelmed by the lack of T&C's! Especially cancellation charges and prepayment penalties, clawbacks, closing fees, etc.
I confirmed on Package A. I couldn't find anything better.

I hope you get all the T&Cs information before signing your bankloan... anyway, I personally think for BUC all charges likely to be irrelevant as it likely taking 3-4 years to complete unless you got lot of cash in hand to paid off before TOP....

Anyway, since already confirmed then shall move on...keep track of your dream home or invetment home progress and wait for next challenge come to renovation...your one would probably top almost the same time with mine...can share info again for the reno... haha...

[ysyap]

During times like this when interest rates will probably remain low for another 12 months (maybe only), buyers can risk getting 1 yr lock in with low interest rates. But during more uncertain times and volatile moments, always go for the no lock-in and actively keep a look out for cheaper deals once interest rates fluctuates... more trouble lah but can potentially save that little bit more to spend on self or family!

[DC33_2008]

There may be opportunity for refinancing even during BUC property mortgage. T&C must be read carefully.

I hope you get all the T&Cs information before signing your bankloan... anyway, I personally think for BUC all charges likely to be irrelevant as it likely taking 3-4 years to complete unless you got lot of cash in hand to paid off before TOP....

Anyway, since already confirmed then shall move on...keep track of your dream home or invetment home progress and wait for next challenge come to renovation...your one would probably top almost the same time with mine...can share info again for the reno... haha...

[evergreen]

I hope you get all the T&Cs information before signing your bankloan... anyway, I personally think for BUC all charges likely to be irrelevant as it likely taking 3-4 years to complete unless you got lot of cash in hand to paid off before TOP....

I asked the banker to give me the entire document a few days before meeting the lawyer. All the charges and conditions are important to me. E.g. the bank states that I have to buy insurance from a particular insurer otherwise I need to pay the bank admin fee for insuring with another insurer.
I only need to loan half the amount but I loaned as much as I can because I prefer to keep my cash for investment.
Termination clauses are extremely important - they should be understood/negotiated upfront because when you want to terminate the agreement, you have no bargaining power.

Anyway, since already confirmed then shall move on...keep track of your dream home or invetment home progress and wait for next challenge come to renovation...your one would probably top almost the same time with mine...can share info again for the reno... haha...

What renovation are you going to do for a brand new condo unit
I'm going to fix up the lights, put up the blinds/curtains only. Of course you could do all those fancy and completely unnecessary carpentry stuff but I think money is better spent elsewhere - things that you can take along with you when you move such as nice moveable furniture, quality fabric for curtain and bed, large wall mirror with a nice frame, framed art pieces or posters, vases, unique lights, top quality bathroom accessories.

[ysyap]

What renovation are you going to do for a brand new condo unit
I'm going to fix up the lights, put up the blinds/curtains only. Of course you could do all those fancy and completely unnecessary carpentry stuff but I think money is better spent elsewhere - things that you can take along with you when you move such as nice moveable furniture, quality fabric for curtain and bed, large wall mirror with a nice frame, framed art pieces or posters, vases, unique lights, top quality bathroom accessories.

There are some developers who do not build the wardrobe for the condo units they sell so still need to engage contractor to build them! Or is it just my developer who do not build wardrobes?

[iwantgizmos]

There are some developers who do not build the wardrobe for the condo units they sell so still need to engage contractor to build them! Or is it just my developer who do not build wardrobes?

Don't worry bout it. Perhaps the cost of the property has offset the cost of the wardrobe. Getting the unit @ low price is better than paying high price for a crappy wardrobe.

[evergreen]

There are some developers who do not build the wardrobe for the condo units they sell so still need to engage contractor to build them! Or is it just my developer who do not build wardrobes?

Mine has wardrobe included.

Don't worry bout it. Perhaps the cost of the property has offset the cost of the wardrobe. Getting the unit @ low price is better than paying high price for a crappy wardrobe.

Most provide it but the quality can be poor. Even those Far East Org high end developments cut corners on the materials used: laminate boards instead of solid wood, normal glass instead of tempered glass, etc.

But you don't need a contractor to do it. Go direct so that you get lower prices and your carpentry built to the correct specifications. Contractors always miscommunicate and try to make you accept the mistakes or pay for rectification.

[sh]

Mine has wardrobe included.



Most provide it but the quality can be poor. Even those Far East Org high end developments cut corners on the materials used: laminate boards instead of solid wood, normal glass instead of tempered glass, etc.

But you don't need a contractor to do it. Go direct so that you get lower prices and your carpentry built to the correct specifications. Contractors always miscommunicate and try to make you accept the mistakes or pay for rectification.

Aiyah... nobody used solid wood for cupboards anymore... maybe just for front if you're willing to pay, but the carcass is almost never solid these days, even for very very high end products.

[ysyap]

Most provide it but the quality can be poor. Even those Far East Org high end developments cut corners on the materials used: laminate boards instead of solid wood, normal glass instead of tempered glass, etc.

But you don't need a contractor to do it. Go direct so that you get lower prices and your carpentry built to the correct specifications. Contractors always miscommunicate and try to make you accept the mistakes or pay for rectification.

One must be selective in what he/she asks the contractor to do. For uniformity and theme, contractors are redundant. One can always walk into a good furniture shop and mix and match. However, there are really some carpentry which will only look much better with contractor's touch. Eg. a cupboard that flushes to the ceiling, weird designs or demanding requirements that are not readily available off the racks, etc. So it really depends on individual's taste, time and demand for perfection, as well as the available budget.

[evergreen]

Aiyah... nobody used solid wood for cupboards anymore... maybe just for front if you're willing to pay, but the carcass is almost never solid these days, even for very very high end products.

I was referring to quality. Even if people are willing to accept poor quality, it doesn't change the definition of what's good and what's poor.
Just like electronics nowadays. Poor quality but cheap

Sometimes it's a matter of safety too. Using normal glass that shatters upon breakage is very dangerous. Certain things, we shouldn't compromise on quality.

One must be selective in what he/she asks the contractor to do. For uniformity and theme, contractors are redundant. One can always walk into a good furniture shop and mix and match. However, there are really some carpentry which will only look much better with contractor's touch. Eg. a cupboard that flushes to the ceiling, weird designs or demanding requirements that are not readily available off the racks, etc. So it really depends on individual's taste, time and demand for perfection, as well as the available budget.

By contractor, I meant renovation contractor - the type who gets the job, subcontracts to other people to do, is supposed to do the coordination and takes a cut.

If you go direct to the people who specialise in carpentry, there's a higher chance that they will understand what you want.

I've helped with 2 hdb flats complete overhaul. Contractors will always mess up something. The only variable is how bad it is and how long it will take to get it rectified.

[ysyap]

Shopping for a mortgage loan in Singapore

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Tan Kin Lian, On Sunday 31 July 2011, 18:03 SGT

Many home buyers look for a mortgage loan with the lowest interest rate. They should look at the other details of the mortgage packages and choose a package that is most suitable for their needs.

Different types of mortgages

Here are three common packages:
• Floating rate package
• Fixed rate package
• SIBOR /SOR package
More details can be found at:
http://www.mortgagesense.com.sg/home-loan-packages

Floating rate package

The interest can be adjusted at the bank's discretion. It is usually calculated on the board Mortgage Rate less a fixed discount (which can vary for each of the first three years). The board rate may be changed at the bank's discretion, which will change the interest rate payable by the borrower.

For example, if the board rate is 4.5% and the fixed discount in the first year is 3.82%, the borrower pays a discount interest rate of 0.68%. If the board rate is increased by 0.5%, the discounted rate will also increase by 0.5%

Fixed rate package

The Interest rate for the first few years is upfront fixed by the bank. The borrower is not affect by interest rate adjustment. The interest rate is usually higher compared to the floating rate package.

For example, the interest rate for the first three years can be fixed at 1.18%, 1.68% and 1.98% respectively and thereafter 3.75% for another three years with a 3 year lock-in period.

SIBOR / SOR package

The interest rate is calculated on the base rate plus a fixed spread. The base rate is available for 1, 3, 6, 9 or 12 months. At the end of each period, the interest rate is recalculated according to the market rate.
For example, the borrower may pay the 3 month SOR rate plus a fixed spread of 0.75%. If the SOR rate is 0.5%, the borrower pays 1.25% for 3 months. This rate will be revised every 3 months. There is no lock-in period under this arrangement.

Lock in period

The borrower should take note of the lock in period. If the loan is terminated earlier, e.g. due to sale of the property, the borrower has to pay a penalty, which is usually 1.5% of the outstanding home loan.

Clawback period

Many banks provide a subsidy to cover the legal fee, valuation fee and fire insurance, which could be as much as $4,000. If the loan is terminated within the claw back period of 3 years, the borrower usually has to repay the subsidy in full (i.e. not pro-rated) to the bank. The actual terms may vary from one bank to another.

Borrow what you need

You should borrow only the amount of loan that you need. If you borrow less, you will pay less in interest.

Keep some money for rainy days

You should have liquid savings at least 12 months of your installments. This may be needed to meet the mortgage payments, in case you lose your job.

Websites

Here are some websites for you to find the mortgage packages that are available. You may find it easier to go through to these aggregator websites, rather than try to call or visit the banks individually. You can engage the service of the website owner to advise you and help you to apply for the loan.
www.smartloans.sg


This is a self-service website. The home seeker keys in the details and see the details of available home loan packages.
www.housingloansg.com


The owner of the website is a pioneer of mortgage broking. He has given many seminars and talks.
www.mortgagesense.com.sg


This website aims to provide a personal touch. It engages the clients and understand their needs before recommending any package. It educates the consumers and compares the packages for them. For every successful closure, it promises to makes a donation to charity.

[fisho]

Sibor Package 1 (No Lock)

INTERST RATES

Year 1
3M SIBOR + 0.625%

Year 2
3M SIBOR + 0.625%

Year 3
3M SIBOR + 0.625%

Thereafter
3M SIBOR + 0.625%

FEATURES

Commencement Date
3 months from the date of Letter of Offer or first disbursement of the


Minimum Loan Amount
$100,000

Minimum Loan Period
5 years

Commitment Period
3 years

BENEFITS

Legal Subsidy
• 0.40% of aggregated loan amount up to $2,500 (whichever is lower)

• Full legal subsidy for loan size >$400,000 (applicable for tie up law firms only)

Other Benefits
• Free fire insurance with home contents coverage for 5 years

• Free valuation

TERMS & CONDITIONS

• One time free conversion within 6 months from date of issuance of TOP

Commitment Fee
Nil


Prepayment Fee
Nil

Admin Fee
Nil

Cancellation Fee
0.75% on the loan amount cancelled or undisbursed at the end of the availability period


Clawback Period
To be refunded if loan is redeemed within 3 years from date of first disbursement


SIBOR Package 2
No Lock-In 3 Years Lock-In
Year 1 to Year 3: 1 Month or 3 Months SIBOR + 0.75% 1 Month or 3 Months SIBOR + 0.60%
Thereafter: 1 Month or 3 Months SIBOR + 0.75%1 Month or 3 Months SIBOR + 1.25%

Terms Of Package:

· Cancellation Fees: 0.75% - this applies to undisbursed loan amt only

· Nil for partial & full redemption (for no lock in package)
1.50% of amount applicable if prepaid of loan o/s is less than SGD$100k after partial repayment
(For no-lock in package, condition is imposed for 1 year)
· 3 Years Lock in package - partial redemption & full redemption 1.50% within 3 years

· Legal subsidy of 0.50% of loan amount, subject to cap of S$2,500. Refund applicable if loan is redeemed within 3 years from drawdown.
· Free valuation (For Pte only)& One Time Free Conversion; 6 Months from TOP
· 5 years fire insurance from TOP
· One month free coverage for HomeSurance Classic if a full year cover is taken up.
· First month premium waiver for MortgageProtector.
· Home Assist - 24-hour home assistance service for emergency repairs at no extra cost

Any suggestions between the two packages?

[flagship74]

Sibor Package 1 (No Lock)

INTERST RATES

Year 1
3M SIBOR + 0.625%

Year 2
3M SIBOR + 0.625%

Year 3
3M SIBOR + 0.625%

Thereafter
3M SIBOR + 0.625%

FEATURES

Commencement Date
3 months from the date of Letter of Offer or first disbursement of the


Minimum Loan Amount
$100,000

Minimum Loan Period
5 years

Commitment Period
3 years

BENEFITS

Legal Subsidy
• 0.40% of aggregated loan amount up to $2,500 (whichever is lower)

• Full legal subsidy for loan size >$400,000 (applicable for tie up law firms only)

Other Benefits
• Free fire insurance with home contents coverage for 5 years

• Free valuation

TERMS & CONDITIONS

• One time free conversion within 6 months from date of issuance of TOP

Commitment Fee
Nil


Prepayment Fee
Nil

Admin Fee
Nil

Cancellation Fee
0.75% on the loan amount cancelled or undisbursed at the end of the availability period


Clawback Period
To be refunded if loan is redeemed within 3 years from date of first disbursement


SIBOR Package 2
No Lock-In 3 Years Lock-In
Year 1 to Year 3: 1 Month or 3 Months SIBOR + 0.75% 1 Month or 3 Months SIBOR + 0.60%
Thereafter: 1 Month or 3 Months SIBOR + 0.75%1 Month or 3 Months SIBOR + 1.25%

Terms Of Package:

· Cancellation Fees: 0.75% - this applies to undisbursed loan amt only

· Nil for partial & full redemption (for no lock in package)
1.50% of amount applicable if prepaid of loan o/s is less than SGD$100k after partial repayment
(For no-lock in package, condition is imposed for 1 year)
· 3 Years Lock in package - partial redemption & full redemption 1.50% within 3 years

· Legal subsidy of 0.50% of loan amount, subject to cap of S$2,500. Refund applicable if loan is redeemed within 3 years from drawdown.
· Free valuation (For Pte only)& One Time Free Conversion; 6 Months from TOP
· 5 years fire insurance from TOP
· One month free coverage for HomeSurance Classic if a full year cover is taken up.
· First month premium waiver for MortgageProtector.
· Home Assist - 24-hour home assistance service for emergency repairs at no extra cost

Any suggestions between the two packages?

any SOR package bo?

[evergreen]

Are you taking a loan for completed or uncompleted/new launch property?

[fisho]

Are you taking a loan for completed or uncompleted/new launch property?

Uncompleted.

[evergreen]

Shopping for a mortgage loan in Singapore

...

Borrow what you need

You should borrow only the amount of loan that you need. If you borrow less, you will pay less in interest.

I disagree. At 1% p.a. interest, I borrow the max amount and max term.
It's not the absolute number of dollars paid that matters; It's the effective amount after accounting for opportunity cost and inflation. Money today is worth more than money tomorrow (except if there's deflation).