"commits to a debt reduction plan with his financial institution to repay at least 3 per cent of the outstanding balance over a period
of not more than 3 years".
That means just need to pay 1% of outstanding loan per year? - equivalent to 100 years loan? ( good match for 99LH).
i think its even possible to negotiate with the bank to pay 3% right at the end of the 3rd year if the bank is flexible.
Probably MAS realising that not so good times are lying ahead. More people losing jobs or getting pay cut, and govt wants to prevent situation where they go into default, firesale etc. This allows them to refinance and roll over, and take advantage of current low interest rates.
MAS says that this is not relaxing of CM, but in effect it is (albeit a very minor tweak). Apart from that, this also sends a signal to the market, and we all know how property market is largely sentiment driven. Some will interpret this as govt signaling that prices have reached the support level, and take their cue from there. Expect some fence sitters to start coming out of the woodwork.
How much above the 60% can one go? Must one be within the 60% tdsr limits after the 3 years when the 3% is repaid?
Looks like you caught another one (the other one caught previously is by MOM and CPF) - Is MAS trying to confuse, mislead, or speak half-truths?????
As I have said before, the property cooling measures like ABSD+TDSR are causing many forcing selling of big quantum properties (mostly in CCR), but this will spread to lower quantum soon (many in OCR) as Singapore's economy is getting bad and residents' unemployment rate rises............... Is it any wonder for the "tweakling" (looks like "relaxing") of the property cooling measures?
Last edited by teddybear; 02-09-16 at 09:32.
Anyone knows what is the interest rate if the person is unable to do Repricing due to tdrs? Still low right, ard 2-2.5%?
there is no limit coz this is not the LTV. fail TDSR means fail TDSR, doesn't matter how many % one can go.
i think this is called review every 3 years? every 3 years if the person keeps his promise to repay 3%, then review again, still fail TDSR, repeat for 3 years with another commitment to repay another 3% at the end of the next 3 years and so on.
I am due for Repricing end of the year. I called my bank last week and was told as long as I put in $6k as part of early redemption, I do not need to submit all the docs for TDRS.. so the bank is aware of this relaxation already?
Can refinance increase the loan amount?
If my outstanding loan is $500k, can I refinance to 1milllion and above my TDSR (assuming I have another loan on another property) and use that $500k plus savings to buy another property thus avoiding TDSR?
"fine-tuning" TDSR is step one
"fine-tuning" ABSD for citizen shall be the next
Refinancing should have never been subjected to TDSR in the 1st place. The outstanding loan is already taken out, whether it falls on this bank or the other bank, there is no change in the total loan book in the banking system. Making refinancing so difficult only serves to enrich the banks (since I dun need to do anything, just sit there and enjoy high Y4 spreads, cause I know you can't get out).
This is called "home equity loan", not "refinance". Already did this in 2006 after receiving an email from the Bank.
However, one cannot purchase a home using a home equity loan, one can only use a home equity loan to refinance.
https://en.wikipedia.org/wiki/Home_equity_loan
Miss the good old days.
Last edited by Arcachon; 02-09-16 at 19:19.
It was the quickest way to cool the hot market then.
Only SG uses such stringent financing criteria.
To make people unable to see upside and refrain from speculative overstretch. Preys on the human mind to be absorbed with worst case sscenario.
It was meant to be removed at the right time.
Last edited by Kelonguni; 02-09-16 at 21:51.
The three laws of Kelonguni:
Where there is kelong, there is guni.
No kelong no guni.
More kelong = more guni.
The psychology of removal of TDSR for refinancing may seem a subtle one, but it will have far reaching impacts on various areas.
Without its removal, people with mortgage may be hesitant to spend on cars and credit purchases and subsequent investment property purchases. They may be unsure about income or their long term intentions to stay in a high paying job and be reluctant to take risks and change jobs.
They may worry about stuck with high rates if income drops or fall sick. But the concession means that the only consideration now is their savings if they lose their job.
The previous refinancing can only be up to 65 years old if one wishes to retire then (0 income) but even that is not relevant now for the group that managed to loan beyond. Even retire at 55 or 60 is more palatable now if manage to save enough.
The three laws of Kelonguni:
Where there is kelong, there is guni.
No kelong no guni.
More kelong = more guni.
The three laws of Kelonguni:
Where there is kelong, there is guni.
No kelong no guni.
More kelong = more guni.
This is interesting:
http://www.mortgagewise.sg/3-ways-to-overcome-tdsr/