home loan Archives - Holland Property

Should You Pay Off Your Home Loan Faster?

hollandproperty — Fri, 17 Jul 2020 12:20:52 +0000

Should You Pay Off Your Home Loan Faster?

I have encountered some home owners who are eager to pay off their home loan as soon as possible, be it for their private property or HDB flat. The conventional thinking is it’s prudent to be debt-free. The sooner they can clear their housing debts, the faster they can enjoy peace of mind or the more they can save on bank interests. These are valid reasons.

But sometimes things are not so straightforward. Take the current Covid-19 situation, for instance, would it have been better to pay off your home loan faster? If you have chosen a shorter loan tenure in order to clear your mortgage loan quicker, but it also means a higher mortgage loan payment each month. In the event of a pay-cut or loss of job, would you be facing a cashflow problem?

Paying off your home loan faster may be advantageous or disadvantageous, depending on the situation and your objectives. There is no one definitive answer.

There are at least three valid reasons for paying off home loan earlier.

Paying off Home Loan Early Helps Save on Bank Interest

One of the key reasons for quickly paying off the mortgage is to save on the bank interests.

Assuming that one takes a $1 million loan at 2 per cent interest, the monthly repayment amount and total interest paid will work out as follow based on different loan tenures:

It is apparent by reducing the loan tenure, the saving on interest can be very substantial. The only downside is the increasing burden of the higher monthly payment. By choosing a shorter loan tenure is akin to taking short term pain for long term gain.

To Be Debt-Free Is To Be Worry-Free

To be debt-free is to be worry-free. It gives you peace of mind without having the burden of having to set aside a portion of monthly income to pay for an outstanding loan. A housing loan usually is the most significant loan you would undertake in your lifetime.

Without any remaining loan also means you can plan better with your finances, such as retirement, investment, buying a luxury item or going on vacation. To be saddled with a big loan is to be worried about the inability to keep up with the payment, especially in a major crisis like the Covid-19 pandemic.

No Outstanding Home Loan Gives A Sense of Security

When a home loan is all paid up, it also gives a sense of security. To be debt-free gives one better control over his or her finances.

Should you face a sudden loss of employment, the last thing you want to be worried about is the possibility of defaulting on your housing loan and the risk of losing your home.

Fluctuating Interest Rate

While our current interest rate is at a historical low, it will not remain low forever. Our home loans are usually pegged to SIBOR (Singapore Interbank Offered Rates). Given the current Covid-19 pandemic, the 3-month SIBOR rate is now at an incredible low of 0.44%. Pre Covid-19 was about 1.87%. Just not too long ago, the mortgage interest rate was more than 2%.

Looking at the history of SIBOR, in 2006 (before the Global Financial Crisis), it was as high as 3.5%, which means a typical mortgage rate would be around 4.5% (compared to 1.3% now!).

In the last 27 years, the three-month SIBOR averages about 2.5%, that is, our average home loan is about 3.5%. This means that if you are taking a 25-year loan, you can almost be sure in the long run, you will be paying a higher interest rate than the current rate.

A 1% increase in the interest rate for a $1 million loan will make a difference of about $490 in monthly payment (for a 25-year loan tenure).

While the last ten years, we have been enjoying relatively low housing loan interest rates, should we enter into an interest-high environment, then it makes sense to clear the loan quickly.

If you are taking an HDB loan for your flat, the interest rate has been 2.6% for as long as I can remember. It is pegged to CPF 2.5% interest rate. The stability of the HDB loan rate may sound good, but it is currently considerably higher than private bank loans. One bank I know is offering five years at 1.4% fixed rate.

Disadvantages of Paying Off Home Loan Quickly

Singaporeans are quite fortunate. Our housing loan interest rates are about one of the lowest in the world.

This is quite different from many other countries, where interest rates can be much higher. As such, there may be greater urgency in rushing to pay off the home loan, given the higher rate.

While it’s always good to minimise interest repayments, our comparatively lower rate adds a new dimension to this. It may, for instance, be advantageous to maintain a healthy cash flow, or have cash to invest elsewhere besides our property, rather than giving full priority to home loan repayment.

That being said, here are some scenarios to consider, in deciding whether to repay your home loan faster:

Are there prepayment penalties?
What are your current savings?
Do you own a private property or an HDB flat?
Does hurrying the home loan repayment optimise your wealth accumulation?

Are There Prepayment Penalties?

For HDB loans, there are never any prepayment penalties, so you can feel free to prepay as much as you like.

For private bank loans, take note that there may be prepayment penalties for a certain period of time, such as in the first three to five years. If you try to make early repayments in this time, there will be a penalty imposed (the bank is trying to get back the interest they would have earned).

This penalty is often around 1.5 per cent of the amount you’re trying to prepay, and it’s almost never worth the cost; you should always wait till you can prepay without penalties.

Some home loans allow for partial prepayment, such as up to a $200,000 or some other sum, without any penalty. You should check the terms and conditions of the loan when signing up for it.

What Are Your Current Savings?

If paying your home loan early would leave you with little or no savings, then it’s a bad idea to go ahead with it.

Consider what would happen if you encounter some sort of financial emergency, such as job loss or a medical emergency. If you have no cash because you’ve been accelerating your loan repayments, what can you do in such a situation?

If you resort to using other loans, such as personal loans, then you’ve made a bad trade-off. Your home loan interest rate was below two per cent, or 2.6 per cent in the case of HDB loans. A personal loan is typically around six to nine per cent interest. You would have been better off keeping more savings, and paying the lower interest rate of your home loan.

If you own an investment property, by choosing a longer loan tenure, with a smaller monthly payment, you can enjoy a positive cash flow every month. Though you are paying interest, in essence, your tenant is helping you to pay.

Also, even if you finish paying off your home in full, it’s dangerous to go for long periods without savings. For example, imagine if you rush repayment, and pay off your flat at the age of 45, while having little savings. What happens if you’re unexpectedly retrenched afterward?

Having a fully paid-up flat, in such a situation, won’t pay your utility bills or buy you food (unless you’re happy to sell it, which might ruin the joy of having paid it off in the first place).

So if you do want to accelerate your home loan repayment, please ensure that you have sufficient savings first. In general, you should at least have enough to maintain yourself for six months even without income.

Once you have a comfortable level of savings, you can then commit to paying more into your monthly home loan, or paying it off altogether.

If you have no cash because you’ve been accelerating your loan repayments, what can you do in such a situation?

Do You Own a Private Property or an HDB Flat?

Private property provides advantages that HDB flats don’t have. One of these is the option to use cash-out refinancing, also known as home equity loan.

Cash-out refinancing allows you to borrow up to 75 per cent of your property value, less your outstanding loan and CPF used. The interest rate is the same as a home loan rate, as your property is the collateral for the loan.

This means that, if you accelerate home loan repayment but find you need cash later, you still have an option: you can use cash-out refinancing to unlock your equity value and get cash without the need to sell your home.

As such, private property owners can face lower liquidity risks in paying off their home loan faster.

For HDB flats, you do need to tread more carefully because you can’t unlock the equity value of a flat like a private condo.

This means that, if you accelerate home loan repayment but find you need cash later, you still have an option: you can use cash-out refinancing to unlock your equity value and get cash without the need to sell your home.

Does Hurrying The Home Loan Repayment Optimise Your Wealth Accumulation?

The main benefit of speeding up home loan repayment is to pay less interest. However, you should have a concrete plan to weigh up your options.

For example, what do you intend to do with the money once your property is fully paid up? Do you have other investment options?

Instead of putting all your money into your loan, how about investing them to get a higher return? If you could invest your cash and grow it at five per cent, for instance, it may be better to use it for that purpose, rather than to speed up repayment of a home loan with an interest rate of just around two per cent.

Or if you are taking a loan at 2% interest to purchase an investment property which gives you 3 to 4 per cent rental yield, you still make a net gain. Using up all your cash to pay off your existing loan may mean insufficient cash reserves for your investment property.

Accelerating your home loan repayment can mean opportunity costs, reduced liquidity, and doesn’t always optimise your wealth accumulation. There are times when it can be beneficial, but you need to have a clear plan ahead of you.

If you’re uncertain whether it’s right to accelerate your home loan repayment, do drop me a message and I can help to provide some clarity. I’m also available for any of your questions on building wealth through property.

Accelerating your home loan repayment can mean opportunity costs, reduced liquidity, and doesn’t always optimise your wealth accumulation. There are times when it can be beneficial, but you need to have a clear plan ahead of you.

Danny Han has always been in the people’s business, having spent 23 years as a church pastor, five years as an insurance agent, and the last 16 years as a property consultant.

Danny has a genuine interest in people and firmly believes in personal integrity. While helping homeowners with their property needs, their interest always takes precedence over his personal gains. Hence, Danny has consistently earned his clients’ complete trust and loyalty. Many of them have become his personal friends.

Danny received his Diploma in Mechanical Engineering from Singapore Polytechnics and Bachelor of Science from Oklahoma Christian University of Science and Arts in Bible & Psychology.

Besides keeping abreast of the property market trend and constantly equipping himself to better serve his clients, Danny is a passionate foodie, a weekend cyclist, and an avid hiker.

SKYE AT HOLLAND

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Is It Still Worth Buying A Freehold Property For Retirement?

Is It Still Worth Upgrading To A Condo In 2024?

How Your Property Can Still Provide For Retirement In 2023 And Beyond

PINETREE HILL

The post Should You Pay Off Your Home Loan Faster? appeared first on Holland Property.

Wealth Accumulation Through Home Equity Loan

hollandproperty — Thu, 26 Mar 2020 13:49:53 +0000

Boost Your Wealth Accumulation Through Home Equity Loan

How do you make money with a property asset?

If you’re like most Singaporeans, you will probably say “rent it out”, or “sell it for capital gain”. Indeed, these are the most commonly understood ways in which to monetise your property.

However, there is a third option that is open to owners of private property – and that’s to use it for a home equity loan.

What Is A Home Equity Loan?

Annoyingly, there are multiple terms used for this kind of financing. You may also hear it called a ‘second mortgage’, ‘reverse mortgage’, and ‘cash-out refinancing’.

Other common terms meaning almost the same thing are ‘equity term loan’ and ‘term loan’. There may be a slight difference between these two terms: an equity loan helps you tap into the value of a fully paid for property; whereas a term loan helps you do the same for a property that has not been fully paid for. But the general principle is the same.

Fundamentally, a home equity loan is a secured loan against the value of your home at a very low interest rate. It lets you ‘cash out’ with funds delivered as a lump sum.

a home equity loan is a secured loan against the value of your home at a very low interest rate. It lets you ‘cash out’ with funds delivered as a lump sum.

Difference Between A Home Equity Loan and Home Loan

An equity loan is a loan you take after you have ownership (equity) in a property.

On the other hand, you take a home loan to purchase a property and start building equity in it.

The eligibility of an equity loan is based on the value of your property; a home loan is dependent on your ability to pay, which is usually your income.

Unlock the Value of Your Property

Let’s say you bought a condo for $800,000 in the year 2000. Today, the condo is valued at $1.2 million. As such, you have about $400,000 of untapped value in the property.

In normal circumstances, the only way to unlock this $400,000 is to sell the condo. But this is not always ideal.

Maybe you are getting exceptional rental yield on your investment property.

Or your property can still appreciate much further.

Or you simply don’t want the hassle of having to move house.

A home equity loan provides a solution to this. It allows you to borrow up to 75 per cent of the new value of your home (up to $900,000 in this example), as a loan.

Since an equity loan is a secured loan using your property as collateral, the interest rate is extremely low – it can be fixed at just around 1.6 per cent per annum* (although the exact terms vary based on which bank you approach).

*At this point of writing, the interest rate for home equity loan can be as low as 1.15% (SIBOR + 0.05%). Do check with your banker or broker for the most current rates.

Why Is A Home Equity Loan A Good Financing Option Compared To Normal Loans?

The interest rate of a personal loan is usually in the range of six to nine per cent per annum.

These are some typical rates for different purposes:

Type of Loan	Interest Rates
Renovation loan	2.98% – 5.8%
Business term loan	3.5% – 6%
Debt consolidation plan	4% – 6%
Education loan	4.5% – 5.88%

At just 1.6 per cent per annum*, a home equity loan is probably the cheapest available option.

Usages of Home Equity Loan

A home equity loan can provide a big enough loan quantum to cover costs such as studying overseas, children’s education, seed capital for a business, etc.

There have also been cases where individuals use home equity loans to consolidate their debts.

For example, say you owe $150,000 in loans, at rates of six to nine per cent interest. You may be able to borrow this amount via a home equity loan, and then pay off all that high interest debt.

You would then have to service only your home equity loan, at a much lower rate of 1.6 per cent. You don’t even need to sell your house to do it.

If you are thinking of investing in another property, and wish to take a maximum Loan-To-Value (LTV), you can take the Equity Loan to pay fully off your existing loan. In this case, the next home loan you are taking will be considered as your first loan, hence eligible for 75%.

If you are thinking of investing in another property, and wish to take a maximum Loan-To-Value (LTV), you can take the Equity Loan to pay fully off your existing loan. In this case, the next home loan you are taking will be considered as your first loan, hence eligible for 75%.

Can a Home Equity Loan Be Used For Investment?

Home equity loans are often used for investment, as the interest rate is exceptionally low.

For example, you may have noticed that an interest rate of 1.6 per cent per annum is even lower than the risk-free, guaranteed CPF rate (2.5 per cent, or four per cent for your CPF Special Account).

Note that you can even put the money back into your CPF if you wish. In this way, you are enjoying a positive carry trade of more about 0.9 to 2.4 per cent (depending on the prevailing equity loan interest rate).

But this action must be taken with great care because once you deposit the cash into the CPF OA or SA accounts, you cannot take it out in cash. You can, however, use the funds in OA to pay for your housing loan payments on an investment property.

Savvy investors may even use the equity loan to invest in stocks, especially in a crisis like Covid 19 pandemic where stock values have dropped to a very attractive value.

As such, it’s not uncommon for property investors to use home equity loans, to seize other profitable opportunities.

you can even put the money back into your CPF if you wish. In this way, you are enjoying a positive carry trade of more about 0.9 to 2.4 per cent.

How Much Can You Borrow?

The amount you can borrow is:

(Up to 75 per cent of your property value) – (outstanding home loan) – (Total amount of CPF used)

For example, say your property value is $1.5 million. You have $300,000 outstanding loan, and you have used $500,000 of your CPF. The total you can borrow is:

$1.125 million (75 per cent of property value) – $300,000 (outstanding loan) – $500,000 (CPF) = $325,000

Terms and Conditions

The only properties for which you can use this loan are private residential properties, industrial properties, and overseas properties*.
For those who own Executive Condominiums (EC), you will need to meet the 5 year Minimum Occupation Period (MOP) before you can qualify.
If you have an outstanding home loan, you can only get a home equity loan from the same bank that holds your mortgage. You cannot owe the same property to two different banks at once. If you’ve fully paid off the mortgage, you’re free to shop around and find a bank you like.
Most home equity loans come with fees of between $2,500 to $3,000; you may also need to pay for a valuation of your property (around $500), if it’s been several years since one has been conducted.
You must pass the usual requirements needed to take on property loan, such as the Total Debt Servicing Ratio (TDSR).

*In practice, Singapore banks tend to only offer the loan on properties in Australia, the UK, and some states in the US.

If you’re not sure what the usual requirements are for property loans, drop me a Whatsapp message, and I can explain them to you.

When Should You Use A Home Equity Loan?

A home equity loan can be used for needs such as settling higher interest debts, tapping into other investment opportunities, or other financial plans undertaken with advice from a qualified financial professional.

Home equity loans should never be used for non-essential expenses, such as buying a sports car or expensive watch.

In addition, it’s important to make sure you can service the home equity loan, as your property is the collateral. Treat it with the same respect as you would another home loan.

For more discussions on how to build a road to wealth with property, visit me at Danny Han Property Wealth Planning. Feel free to drop in and ask me anything or schedule a zoom meeting with me using the calendar below!

Danny Han has always been in the people’s business, having spent 23 years as a church pastor, five years as an insurance agent, and the last 16 years as a property consultant.

Danny received his Diploma in Mechanical Engineering from Singapore Polytechnics and Bachelor of Science from Oklahoma Christian University of Science and Arts in Bible & Psychology.

Besides keeping abreast of the property market trend and constantly equipping himself to better serve his clients, Danny is a passionate foodie, a weekend cyclist, and an avid hiker.

Subscribe to receive updated practical property investment insights, property reports and good investment deals

The post Wealth Accumulation Through Home Equity Loan appeared first on Holland Property.

Why Lock-In Clause Is Not Always Bad For Home Loan

hollandproperty — Wed, 25 Mar 2020 06:16:00 +0000

Why A Lock-In Clause Is Not Always Bad For Home Loan

A home loan is the first thing a homebuyer needs to consider when buying a property. There are only rare fortunate few who can afford to buy without having to take a housing loan.

With many HDB upgraders in the market this year, some will be taking bank loans for the first time.

Housing Loan Can Be Very Complex

A housing loan offered by banks is quite different from the simpler HDB concessionary loan you may have been used to before. Bank loan packages are quite varied and have different terms and conditions. Some basic variations are:

Fixed rates with lock-in
Floating rates with lock-in
Floating rates with no lock-in (generally for buildings under construction or BUC, referring to non-T.O.P projects)

For our discussion here, we will focus only on the lock-in clause, which is misunderstood by many first-time bank home loan borrowers.

What Is A Lock-In Clause In A Home Loan?

Many bank housing loan packages come with a lock-in clause of two to three years; very rarely, you may see some with a lock-in that’s as long as five years.

In addition, you should know that any fixed-rate home loan is by default “locked-in”, for the duration of the fixed rate (typically two to three, sometimes up to five years).

Penalty That Comes With Lock-In

The concept of the lock-in is simple:

If you attempt to refinance your home loan (i.e. switch to another, cheaper bank) within the lock-in period, you will be charged a penalty of 1.5 per cent of the undisbursed loan amount.

An Example

For example, if you have $500,000 outstanding on the home loan, you would end up paying 1.5 per cent of $500,000 ($7,500). This penalty is how the bank makes up for the interest it would lose on the loan you take. Due to the harshness of the lock-in penalty, it is almost never worth incurring it just to refinance.

This condition also applies if you attempt to pay off the whole loan during the lock-in period (e.g. when you try to pay off the remaining loan all at once, following the sale of your house). However, there are some exceptions to this, as I’ll explain below.

The Main Worries Regarding Lock-In Clause For Housing Loan

Bank home loans can fluctuate with the interest environment and economy; whereas HDB loans at 2.6 per cent hardly change. As such, many bank loan users will be on the lookout for cheaper rates – you can minimise the interest you pay by switching to a lower rate loan when the time is appropriate.

(Ps. If you’re confused by how a bank home loan affects your property asset, do contact me. I can help to clarify the important details, especially if you’re a recent upgrader who has only dealt with HDB loan before).

Worry #1: Interest Rates Rise During Lock-In Period

The main worry is that should the interest rates rise, and with a lock-in, you will be stuck with the higher rates. This will be true for the case of a housing loan package that is based on floating rates, which is based on a fixed percentage plus usually SIBOR rate. SIBOR rates can change over time.

Currently, with the major Covid 19 crisis at hand, fixed rates with lock-in can be as low as 1.68 per cent and floating rates as low as 1.36%.

Floating rate loan package is the preferred choice now because it is likely interest rates will stay low in the next one to two years. But do be aware of the potential risk in the event the world recovers fast from the Covid 19 crisis.

(Ps. Finding you the cheapest loan is not the role of your property agent; it is best handled by a mortgage broker. And they usually don’t charge you anything. So do look for one).

Worry #2: Sell Your Property During The Lock-In Period

The second fear is that, if you need to sell your house during the lock-in period, you will incur the penalty. 1.5 per cent of the undisbursed loan amount can be very painful.

But A Lock-In Clause In A Home Loan Is Not Always Bad

This may sound crazy, but a lock-in can actually be a good thing.

Housing Loan With Lock-In Enjoys Lower Interest

The first reason is that housing loans with a lock-in tend to be slightly cheaper. The bank will compensate you by lowering their spread (their charges) slightly. You might find your loan rate lower by 0.2 to 0.3 per cent.

(I know that doesn’t sound like a lot – but given the sheer size of home loans, and the effect of compounding, small changes can accumulate to significant sums).

Here is an example for a home loan with lock-in and no lock-in:

Note: For this example, we are using a sample bank loan package by a particular bank, which is available at the time of writing. Available loan packages and rates change on a monthly basis.

Example of a Home Loan With No Lock-In

Loan amount: $1 million
Duration: 25 years (300 months)
Interest with no lock-in: 2.03 per cent per annum

Monthly Payment: $4,253.16
Total Payments: $1,275,949.14
Total Interest Paid: $275,949.14

Example of a Home Loan with Lock-In

Now, let’s look at an alternative package from the same bank, which also has lock-in. The loan amount and duration are the same, but the loan interest rate is only 1.7 per cent with either 2 or 3 years lock in:

Monthly Payment: $4,094.02
Total Payments: $1,228,204.57
Total Interest Paid: $228,204.57

Slightly Lower Interest Rate Big Savings

So you can see that, with a slight “tweak” of just 0.33 percentage points, it comes to saving about $159.14 per month. If you maintain the loan at the same rate over the whole course, the difference in interest payment will amount to $47,744.57.

This extra interest is yet one more cost that eats into your gains and negatively impacts your net rental yield.

(Important to note: unlike our hypothetical example, interest rates fluctuate so you will not have the same rate throughout your entire loan tenure. I am using this to illustrate that, all things being equal, the differences in the interest rate can impact your bottom line. Hence, it sometimes justifies accepting the lock-in clause for a lower rate).

For Singaporeans who don’t intend to refinance, especially when the current interest rate is so low, a lock-in period of two or three years is not a key restraint. In fact, most home loans are cheap for three years and then jump on the fourth. So you would be getting a lower rate, with no real penalty.

Housing Loan With Lock-In May Have Waiver of Penalty Due To Sale of Property

The second reason is that today, some banks provide a waiver for “redemption of loan due to sale”. This means that, if you are paying off the loan as a consequence of selling your property, you won’t be hit by the penalty. This incentive mitigates one of the main fears of a bank loan with lock-in.

Lock-In When The Rates Are Very Low

A final consideration is an environment with rising interest rates. While rates are low right now (mainly due to factors like the US-China trade war, Covid-19 flu, Brexit, etc.), do note that home loan rates have been abnormally low for over ten years.

Bank loans now are as low as 1.68 per cent to two per cent per annum, cheaper than even HDB loan rates (2.6 per cent). Can’t imagine how much lower it can get. So it’s good to lock in these low rates while you can.

Bank loans now are as low as 1.68 per cent to two per cent per annum, cheaper than even HDB loan rates (2.6 per cent). Can't imagine how much lower it can get. So it’s good to lock in these low rates while you can.

Opt For Lock-In When Interest Rate is Very Low Now

For reference, the “normal” interest rate for home loans in Singapore used to be around four per cent. This was before the Global Financial Crisis that sent rates plummeting in 2008.

As such, there’s likely to be a time when interest rates start climbing again. Before the US-China trade war, mortgage rates did go up in tandem with US Central Bank rates. With the current Covid-19 pandemic, we are seeing unprecedented low-interest rates. Interest rates will not stay so low forever.

When interest rates do go up, why would a lock-in be a problem? Surely you’re not going to refinance into more expensive loan than you have! Also bear in mind, after the lock-in period, you will likely need to do a refinancing. By then, your future decision will be based on the situations when the time comes.

In short, don’t be too quick to dismiss a loan package because of the lock-in clause, especially if it’s cheaper

In building wealth through property, a fundamental principle is keeping your costs low.

A high interest rate eats into your capital gains, and lowers your net rental yield (like me on Facebook, for further updates on how to maximise your property gains). It may not make sense to forego a good loan offer with a low rate, for a lock-in clause that may ultimately be irrelevant.

Update: Falling Interest Rates Due To the Covid 19 Pandemic

Following the United Stated Federal Reserve (the Fed)’s cut in interest rates to near zero, and the escalating Covid 19 pandemic, bank interest rates are falling to an unprecedented low level. Low rates help to keep the economy going in rough times.

We are seeing a knock-on effect. The anticipated protraction of the pandemic will mean interest rates will be kept low for quite some time. Hence, it’s worth considering floating, SIBOR-pegged home loans at the moment.

Right now, rates can be as low as 1.15 to 1.24 per cent per annum with a lock-in package (drop me a message if you’re looking for a home loan right now, and want to save money). Don’t wait too long however, as banks will eventually raise their spread when SIBOR falls steeply.

You can also use the calendar below to schedule a zoom meeting with me.

Danny Han has always been in the people’s business, having spent 23 years as a church pastor, five years as an insurance agent, and the last 16 years as a property consultant.

Danny received his Diploma in Mechanical Engineering from Singapore Polytechnics and Bachelor of Science from Oklahoma Christian University of Science and Arts in Bible & Psychology.

Besides keeping abreast of the property market trend and constantly equipping himself to better serve his clients, Danny is a passionate foodie, a weekend cyclist, and an avid hiker.

Subscribe to receive updated practical property investment insights, property reports and good investment deals

The post Why Lock-In Clause Is Not Always Bad For Home Loan appeared first on Holland Property.

home loan Archives - Holland Property

Should You Pay Off Your Home Loan Faster?

Should You Pay Off Your Home Loan Faster?

Paying off Home Loan Early Helps Save on Bank Interest

To Be Debt-Free Is To Be Worry-Free

No Outstanding Home Loan Gives A Sense of Security

Fluctuating Interest Rate

Disadvantages of Paying Off Home Loan Quickly

Are There Prepayment Penalties?

What Are Your Current Savings?

Do You Own a Private Property or an HDB Flat?

Does Hurrying The Home Loan Repayment Optimise Your Wealth Accumulation?

SKYE AT HOLLAND

New Launch vs Resale Condos In 2024: Which To Buy?

Is It Still Worth Buying A Freehold Property For Retirement?

Is It Still Worth Upgrading To A Condo In 2024?

How Your Property Can Still Provide For Retirement In 2023 And Beyond

PINETREE HILL

Wealth Accumulation Through Home Equity Loan

Boost Your Wealth Accumulation Through Home Equity Loan

What Is A Home Equity Loan?

Difference Between A Home Equity Loan and Home Loan

Unlock the Value of Your Property

Why Is A Home Equity Loan A Good Financing Option Compared To Normal Loans?

Usages of Home Equity Loan

Can a Home Equity Loan Be Used For Investment?

How Much Can You Borrow?

Terms and Conditions

When Should You Use A Home Equity Loan?

SUBSCRIPTION FORM

Why Lock-In Clause Is Not Always Bad For Home Loan

Why A Lock-In Clause Is Not Always Bad For Home Loan

Housing Loan Can Be Very Complex

What Is A Lock-In Clause In A Home Loan?

Penalty That Comes With Lock-In

An Example

The Main Worries Regarding Lock-In Clause For Housing Loan

Worry #1: Interest Rates Rise During Lock-In Period

Worry #2: Sell Your Property During The Lock-In Period

But A Lock-In Clause In A Home Loan Is Not Always Bad

Housing Loan With Lock-In Enjoys Lower Interest

Example of a Home Loan With No Lock-In

Example of a Home Loan with Lock-In

Slightly Lower Interest Rate Big Savings

Housing Loan With Lock-In May Have Waiver of Penalty Due To Sale of Property

Lock-In When The Rates Are Very Low

Opt For Lock-In When Interest Rate is Very Low Now

Update: Falling Interest Rates Due To the Covid 19 Pandemic

SUBSCRIPTION FORM