Expatriates staying in Singapore for lengthy periods of time may find that being billeted in a hotel for the length of their stay can be very expensive. If a foreigner owned a residential property in Singapore, the costly problem could have been averted.

In Singapore, expats are not restricted by government officials from purchasing their own residential properties.

Primarily, Singapore’s Residential Property Act aims to let Singapore nationals to buy, at affordable prices, their own residential properties. In addition, this Act supports foreigners who are recognized by the Singapore government to have made important contributions to the economy of the city-state in their desire to buy residential properties within Singapore.

Even without any permits or sanctions from Singapore government officials, an expat may buy non-restricted residential properties. Non-restricted residential properties are described as whichever of the following:

- apartment units within a building that is not more than 6 floors in height – condominium units in approved condo development sites stipulated in the Planning Act – a lease agreement on a restricted residential property; the contract must not go beyond 7 years

Foreign nationals who desire to acquire all units in an apartment or condo in an accredited development site should have prior sanction from Singapore’s Minister for Law.

Furthermore, a foreigner who would like to buy residential properties that are classified as restricted cannot do so without prior approval from Singapore’s Minister of Law.

The Residential Property Act of Singapore specifies these restricted residential properties as follows:

- an empty residential land – town houses, separate or semi-detached houses, or terraced houses standing on residential properties – lots not authorised for condo development under the Planning Act

If an expatriate wishes to purchase a restricted residential property, he or she is required to fill out an approval form and submit this, together with supporting documents, to the Singapore Land Authority. This government agency is responsible for receiving the requests of the expatriate regarding the proposed ownership of a restricted residential property. The agency will assess and approve or disapprove the application, depending on the virtues of the expatriate’s qualifications.

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Maintaining a regular assessment of your family finances is essential to the family’s financial welfare. The following tips will help you take charge of your household finances.

Use of Credit Cards

Use your credit if you have one. However, remember to pay your outstanding balance, not the minimum amount, before its due. Use your credit card wisely.

Rule of Thumb

Household expenses should be lower than 33% of household income. If it is higher, think of cutting down your expenses. Below are useful tips to cut down your household expenses.

1. Cleaning of air-conditioners should be done regularly.

2. When you do the laundry, do it full load.

3. Put thimbles on your taps

Assign Book Keeping Duties to Your Children

If you have kids, share them a simple task in book keeping, like data-entry. This will make them understand basic financial principles. Moreover, it will also give them a sense of responsibility and promotes good financial practice.

Keep a File of Your Financial Statements

List down your finances. Have a notebook or a ledger. If you have a computer, put everything into a spreadsheet. You don’t even have to pay up cash for a spreadsheet.

The following tips will help you organize your financial statements.

1. To save time from entering data, get soft copies of bills and statements, if possible.

2. Save your files and have back-up of them. You can use CD-R or thumb drive. Then keep them in a safe place.

Plan Your Finances

If there is only one in the household is working, and there is not much sources of income, consider an insurance plan for the breadwinner. This will help you from financial problems when the breadwinner become disabled

Do It Regularly

When you are not doing your task, it piles up. Give at least half an hour each week to analyze your finances.

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Once you resolve to take up a home loan, the immediate matter that tempests your head is selecting between fixed and floating rate of interest. It is easy to get stuck at this stage if you are not financially educated.

Usually, when the news papers splashes reports on banks raising home loan interest rates in and their affect on Monthly Installments, you may take for granted that it is better to opt for fixed home loan rates. In fact, your banker may also advise you to go for the same.

Now ideally as it should be, we assume that once you select fixed rate plan for yourself the rate of interest will remain unaltered for the entire period you have fixed the interest rate for irrespective of any incidental increase in the same. But in reality this is not necessarily the situation.

Here we demystify the nature of fixed interest rate mortgage transaction for you so that you can make an educated conclusion over the matter.

* Read the small print of your home loan document. You will find that the bank has the right to serve you thirty or sixty-days notice period that it intends to increase its interest rates.

* The bank’s first-year rates are binding on the bank only for that short period of 1 or 2 months. The 2nd-year home loan rates are not binding at all. Neither are the bank’s 3rd-year loan rates.

* Force Majeure Clause

So, while you read your mortgage contract, you can spot statement like this:

“Provided further that from time to time, the bank may in its sole discretion alter the rate of interest suitably and prospectively on account of change in the internal policies or if unforeseen or extraordinary changes in the money market conditions take place during the period of the agreement.”

This is called Force Majeure Clause that enables the lender to undertake appropriate alterations in the interest rates on home loans they approve to their borrowers.

So remember to look at refinancing every couple of years so that you do not pay too much. If you select a good home loan company you can save a lot of money over the life of your mortgage and in almost all cases the consultation cost is free.

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When it comes to mortgages, numerous people do not refinance. A significant number are oblivious they have the option of shifting their loan to different financier; others are simply indifferent. They stick with their very first lender and the “reward” for such loyalty tends to be higher interest rates. Due to the magnitude of housing loans and the tenure that the home loan is amortized over, the interest we are speaking about here can easy extend from 1000’s to 100,000’s of dollars. Take a look at the following elements to see whether it’s time for you to consider refinancing.

Current Interest Rate

It is decidedly a positive indication for you to explore refinancing when your current interest rate is higher than available loan packages on the market. A first step to take is to go back to your current banking company or financial institution and ask them to revise your package, otherwise known as repricing. If your lender comes back with an offer, it will ordinarily be better than your existing one. You can then compare this offer with offers from other lenders to see whether you should switch or stay put.

Lock-in and Clawback Periods

When you take up a mortgage, there may be a lock-in period where your mortgage lender will charge you a penalisation fee, commonly a percentage of your outstanding loan amount, if you were to fully repay your housing loan. Almost all mortgages also come with a clawback period where the lender will claim back “freebies”, such as legal subsidies, that they “gave” you when you take up your mortgage (Note: lock-in period is separate from clawback period). It may not be worthwhile for you to refinance due to such costs.

Loan Quantum

The larger your home loan amount, the larger your savings for the same reduction in interest rates. For instance, 1% on a loan of S$100,000 is much less than 1% on a loan of S$500,000. However, fixed cost to refinancing, which represents mainly of legal fees, do not vary much with loan quantum. The difference between your current and refinancing interest rates, therefore, has to be bigger for a relatively smaller housing loan as fixed cost eats into a more significant share of your interest rate savings.

Perceived Interest Rate Movements

Your view on how interest rates is moving can be a factor when considering whether you should refinance. If you are currently on a fixed rate package and think interest rates are dropping, you may want to refinance to a floating rate package. Conversely, if you are on floating rates and believe interest rates are skyrocketing, converting to fixed rates may be a effective choice.

Individual Financial Appraisal

If there is a change in your financial state, you may want to change your package particulars via refinancing. For instance, you are beginning your own business and do not want volatility in other areas. Give some thought to taking up a fixed rate package. Maybe you want cash to invest in another property. Consider raising your loan quantum. Or your monthly income has increased and you want to reduce interest loan payments. Consider reducing your loan tenure.

Consider calling us today if you are looking for refinancing in Singapore. We can save you a lot of money plus give you the latest advice all for free.

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In Singapore, housing loan packages have two categories: fixed rates or floating (variable) rates.

Fixed rates are sometimes offered for up to 3 years. However, other lenders can offer up to 5 years or 10 years. This is unlike from many Western countries where rates can be fixed throughout the loan tenure.

Floating rates can be categorized into published rates or board rates. Like Singapore Interbank Offered Rate (SIBOR) or Singapore Swap Offer Rate (SOR), published rates are normally rates that are released daily. Meanwhile, board rates are set by the respective bank or financial institution. Many of the lenders placed their board rates to a certain financial benchmarks, yet the correct elements are sometimes not clear and variations in board rates turn indefinite.

There are no limits for emigrants applying for housing loans. Still, the following constituents should be dealt.

Loan to Value

The maximum loan to value (LTV) in Singapore is 90% of the purchase price or valuation, whichever is lower. Some loaners do not give maximum LTV to emigrants, thus, housing loan packages for 90% financing are limited. Loan approval for 90% funding is also stricter than for LTV 80% and below.

Income Proof

To receive commnedation for a housing loan your current income tax assessment or a letter of appointment from your local employer is required. Some local loaners do not accept tax assessments from other countries.

Landed Property

The commendation from Singapore Land Authority is necessary before emigrants can buy restricted properties such as vacant land or landed properties such as bungalows, semi-detached, and terrace houses.

In-principle Approval

Try to apply for an in-principle approval before proceeding with a purchase, since loan applications are more intricate for emigrants. Consider of hiring a reputable and professional housing loan consultant. This may help you save time and money with your loan approval.

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