Home loan for BUC

[RayOfLight]

I took up ocbc because banker told me there will be a 1 time free conversion and there after can also call in for waiver for conversion. not sure how true is it for ocbc to waive off.

may I know how does refinance works? if let's say I were to refinance to dbs after 2-3 years, I suppose I will need to pay ocbc some fee? I was also told that some bank may help to you pay for the fee? how true is it? if not how much is the finance fee normally? and can pay via cpf or cash?

 

[joannen85]

Technically you only have floating rates as a choice. Sibor/Sor, probably sibor/Sor hybrid, board, & FD pegged options.

FHR is a new product (About 2+ yrs), and there is already an example cited on how sibor has increased this past 1-2 years but FHR remained stable, so I don't get your point about asking who benefitted from getting FHR. And also given mortgageguru's analysis of fix deposit rates(FD tenor difference comparison, probability of bank raising FD, transparency of each type etc), & also examples explaining the mechanism of board vs FHR, there is more than sufficient info to extract a decision to your own comfort level.

I don't see a point in asking also for more examples for board rate sufferers or benefiters. It really depends on the year of loan taken and how market rates move and what the bank did consequentially at that time. If you really need so detailed info, i think you should get the services of a mortgage broker(like mortgageguru who has replied, or Loansupermart, icompare, redbrick etc) who might be willing to value add.( and pls take your loan through them) Otherwise I think you can continue to wonder about your various scenarios of benefiters and sufferers of each type of loan package. No offense. Just my opinion.

Thanks for the detailed explanation. I understand now.

 

[joanie_dan]

Just came to my mind on 1 additional point to aid your decision.

Typically for BUC, TOP 3yrs, CSC 4yrs. Hence you need to stay with the same bank til CSC before you can refinance to another bank without paying any penalties. (Consider a 4 year perspective instead as the bulk loan is at top 65%, and csc80%)

Upon TOP, the house is completed. Most banks allow you to reprice/utilize one time free conversion to fix rate packages if available. However OCBC only allows a change to fix rate upon CSC, so by going with Ocbc, even if you have a one time free conversion to other packages, come year 3 TOP, technically you can only switched to another floating rate. If you compare this with other banks free conversion, this is a disadvantage.

Cheerios, pls take no offense if my words were too harsh

Thanks for the detailed explanation. I understand now.

 

[joannen85]

Just came to my mind on 1 additional point to aid your decision.

Typically for BUC, TOP 3yrs, CSC 4yrs. Hence you need to stay with the same bank til CSC before you can refinance to another bank without paying any penalties. (Consider a 4 year perspective instead as the bulk loan is at top 65%, and csc80%)

Upon TOP, the house is completed. Most banks allow you to reprice/utilize one time free conversion to fix rate packages if available. However OCBC only allows a change to fix rate upon CSC, so by going with Ocbc, even if you have a one time free conversion to other packages, come year 3 TOP, technically you can only switched to another floating rate. If you compare this with other banks free conversion, this is a disadvantage.

Cheerios, pls take no offense if my words were too harsh

No worries. I was comparing DBS FHR and UOB. Both offers free conversion upon TOP. I was also comparing their fixed rate and found out UOB's fixed rate is much lower than DBS's. I was considering that when it is time to proceed with the free conversion, I will be able to enjoy a lower fixed rate assuming I take up the UOB board rate now. I reckon both banks would adjust their rates, but UOB would still have a lower fixed rate in 3yrs time.

 

[joanie_dan]

Every bank has promotional periods of fix rates, so all boils down to timing. Using Uob having a better fix rate now is not a good indicator of future trends.

Hence I guess most people will rather compare based on current loan package on the assumption of no change of loan package as nobody knows which bank has the best fix rates 3yrs later.

Good luck!

No worries. I was comparing DBS FHR and UOB. Both offers free conversion upon TOP. I was also comparing their fixed rate and found out UOB's fixed rate is much lower than DBS's. I was considering that when it is time to proceed with the free conversion, I will be able to enjoy a lower fixed rate assuming I take up the UOB board rate now. I reckon both banks would adjust their rates, but UOB would still have a lower fixed rate in 3yrs time.

 

[RayOfLight]

in general, let's say after 3 years with ocbc, I decided to switch to dbs. how much penalty do I need to pay to ocbc/or legal fee? let's say full amount has been dispersed, no lock in and initial loan amount is 600k. kind of like regret to sign up for ocbc, but I guess no choice already even though I have not met the lawyer.

 

[RayOfLight]

Usually upon 3 years and full disbursement made, there'll be no penalty.

Note that 3 years meaning from the date of first disbursement, not from the date of letter of offer.

ic.. so am I the right to say that I just have to pay for the legal fee and valuation fee to dbs? and I don't have to pay anything to ocbc?

 

[joannen85]

Usually upon 3 years and full disbursement made, there'll be no penalty.

Note that 3 years meaning from the date of first disbursement, not from the date of letter of offer.

Full disbursement would refer to up till CSC?

 

[joannen85]

You are very wrong to assume UOB will have a lower fixed rate than DBS in 3 years time.
As this is a forecast;

- we won't know exactly what's their rate will be by then
- we won't know what's their bank strategic planning by then
- we won't know which bank will be more aggressive on mortgage by then

If you were to think that this 2 bank will be the most competitive one, you are wrong.
Before the interest hike this year on January, or rather early December 2014... Maybank is the bank that's offering the most competitive fixed rate going at;

1st year - 1.25%
2nd year - 1.45%
3rd year - 1.55%

Back then, most people choose not to take up this package as interest were still low, rather stick to sibor at 0.4% with spread of 0.8% only paying 1.2% with flexibility as a floating rate.
Fast forward 1 month, everybody rush in to this rate, some get, some didn't due to Maybank's stomach being full from the sudden rush.
Can't blame those that on sibor paying effective rate at about 1.1% not to take up this package as they expect it to remain low.
But if you realized, taking a little disadvantage back then, the next few years could've been much better when you look at the market rate at 3 years 1.98% or even much higher at some other banks that's going at 2.28% till 2.68%.

Taking a property loan is not for 1-2 years, a property loan usually last 20-30 years.
Every 1-2 years is to take your time out, sit down and have a proper evaluation on what's the market going towards, whether is it sensible to take up fixed or floating, whether your current interest is above market rate.

Thanks. I will be taking up DBS's package!

 

[RayOfLight]

Yes! You are right!

thanks.. normally how much is the legal fee? is it the same as per what will be paying during the s&p? this fee can also be paid by cpf also right? and let's say I were to refinance to dbs, dbs will some how help to cover this legal fee.

 

[saintgtril]

I am currently with DBS, SIBOR + 0.75% throughout package.

I decide to source for a better package after knowing fed announces the interest hikes.

I chance upon the following fixed rate packages:

1. DBS FHR18+ - 1.88, 1.88, 1.88, FHR 18 + 1.8% (when DBS FHR 18 = 0.5)
2. BOC - 1.98, 1.98, 1.98, 3 months SIBOR + 1.25
3. CIMB 3M SIBOR+ -
   (a) 2.08, 2.08, 2.08, 3 months SIBOR + 1.50 (3 years fixed rate)
   (b) 2.18, 2.18. 2.38, 2.38 (4 years fixed rate) OR
   (c) 2.45, 2.45, 2.45, 2.45, 2.45 (5 years fixed rate)

I prefer a fixed package (peace of mind & i feel the SIBOR/board rate will increase multiple folds as soon as early next year).

But i may be better off with DBS floating package DBS FHR 18+ (1.25% for the entire tenor) for the following reasons:

1. There appears to be an interest hike when the fixed interest period ends (e.g. fourth year of DBS FHR18+ is FHR 18 + 1.8%).
2. I am not eligible for BOC package.
3. I avoid packages that are associated to BOARD rates (e.g. UOB 1.88% fixed for 2 years)
4. Though i like the CIMB 4 years fixed package, there are no legal subsidiary for ALL CIMB packages. The fee can be $2000 (or more).
5. I read MortgageGuru's analysis and he recommends the DBS floating package DBS FHR 18+ (1.25% for the entire tenor), though DBS FHR 18+ (FHR 18 + 1.05% for 3 years) & OCBC 36 FDMR+ is of lower interest in the first 3 years.
6. I only need to pay repricing fee (quoted $800) if i still stay with DBS.

Let me know if anyone has any comments, thoughts, advices etc... Very much appreciated.

 

[doody_]

I thought nowadays no more legal subsidy?

 

[RayOfLight]

It depends. For hdb there's no subsidy unless you take up their hdb package.
Cost will be in the range of $2k in total.

It's for pte loan.. and so the fee is payable via cpf as well?

 

[saintgtril]

Thanks MortgageGuru for the update. Do you still recommend me to go with DBS (FHR 1.25%) then? I look forward to your advice.

Noting the fact that i will pay 1.85% instead of 1.75% now. Sian!!!

update: FHR18 increased by 0.1%

Fhr 12 & 24 months also increased by 0.1%

May refer to here for the FD rates at DBS.

http://www.dbs.com.sg/personal/rates-online/singapore-dollar-fixed-deposits.page

Reprice with dbs to fhr 1.25 if you can afford to be a little adventurous.
Otherwise just take the 1.88 fixed rate on offer.
Currently in my opinion, only dbs has the best package in the market.

 

[doody_]

update: FHR18 increased by 0.1%

Fhr 12 & 24 months also increased by 0.1%

May refer to here for the FD rates at DBS.

http://www.dbs.com.sg/personal/rates-online/singapore-dollar-fixed-deposits.page

Sorry, note the difference...

*FHR 12&24 months increased by 0.275 to 0.675 instead of 0.1.

FHR18 increased by 0.1 to 0.6

Damn. Still better than SIBOR I guess.

 

[saintgtril]

My new loan package, FHR18+1.25% (throughout the entire tenor) will take effect end of next month.

I switch from SIBOR + 0.75% (throughout the entire tenor).

The only cost i incur is the repricing fees, $500. There is no legal fees, subsidiary claw-back etc...

God blesses FHR18 will stay constant as long as it can.

 

[dayowl]

My new loan package, FHR18+1.25% (throughout the entire tenor) will take effect end of next month.

I switch from SIBOR + 0.75% (throughout the entire tenor).

The only cost i incur is the repricing fees, $500. There is no legal fees, subsidiary claw-back etc...

God blesses FHR18 will stay constant as long as it can.

Is this still available...and does repricing apply to ecusting buc dbs loan...which has not start drawn down yer.?

 

[Popeye228]

What about the UOB current package of 1.48 BR Year, 1.68 BR Year 2, 1.98 BR Year 3, 2.65 BR Year 4, 2.65 BR Thereafter? Lock in is Nil but its only for Private/EC only.

 

[PeterMaryParker]

What about the UOB current package of 1.48 BR Year, 1.68 BR Year 2, 1.98 BR Year 3, 2.65 BR Year 4, 2.65 BR Thereafter? Lock in is Nil but its only for Private/EC only.

Forget about UOB. It's only dbs and ocbc right now that's in the market.

 

[mt]

When I buy the EC on day 1, my agents introduce lawyer and few bankers and I have talked to them on that same day. Now I understand why he so eager as apparently he can get commission from them.

Any idea what is the property agent commission % from selling house and help lawyer and banker secure customer?

Just a question, if I use this lawyer who charge me $2300 , later when I secure a bank loan, will the bank charge me another legal fee? Won't $2300 which I will be paying to my lawyer cover it?

Have anyone tried loanswork.com.sg ?