House owner lip Lai to discuss?

[mirukuboi]

Not this again

 

[tankgunner]

Hi all EDMW experts here, asking for opinion which is better option? Should I try to clear the home loan as fast as possible or I should drag out to the max loan period? Some says it depends if I can use money to make investment which can covers the interest occurred.

you using cash or cpf for the loan?

 

[ballastic90]

Which one better ?

 

[1982-1994]

Is that so? I tot pay up fully get the title deed is settled liao. Until sells again then repay CPF?

accrued interest

 

[sarduakar2000]

you using cash or cpf for the loan?

CPF bro

 

[sarduakar2000]

Which one better ?

Doesn't seem like there is a one size fits everyone answer. Everyone has a different opinion. Personally I prefer to pay up early and end the loan so that can relax in my old age. But today someone told me to drag the repayment as late as possible so that mortgage insurance will settle it. Hence I started this thread.

 

[tankgunner]

CPF bro

stop using cpf.
use cash aka bank loan.

 

[1982-1994]

CPF bro

try to pay with cash if your monthly salary allows, to save the 2.5% AI

however if you are staying for good, then it doesn't matter till you sold your house

my mum used $128k from her OA in housing in 2003, her AI is $55k now

 

[1982-1994]

the AI stops compounding once you have paid the AI and principle amount

 

[kenpachi82]

TS you answer your own question liao.

 

[wutawa]

Hi all EDMW experts here, asking for opinion which is better option? Should I try to clear the home loan as fast as possible or I should drag out to the max loan period? Some says it depends if I can use money to make investment which can covers the interest occurred.

this is right. if your money just sitting in bank, then u r just wasting your money paying more int. do keep some spare cash for emergency though.

 

[Raelight]

I got the title deed but the cpf accrued interest is still running.
No point paying up using cpf money.

 

[sarduakar2000]

I got the title deed but the cpf accrued interest is still running.
No point paying up using cpf money.

Ic.

 

[articland05]

accured interest doesnt matter if u have no intention to sell the unit


Read HWZ Forum Rules!

 

[sarduakar2000]

accured interest doesnt matter if u have no intention to sell the unit


Read HWZ Forum Rules!

Hmm.. Dun have intention to sell la unless have to downgrade for retirement fees.

 

[Jackal84]

For the last 10 years low interest environment I would encourage people to invest in equities or index funds because the returns can cover a portion of the cost of borrowing.

But this year onwards where interest rates are set to rise, I would encourage you to pay back as much as you can.

 

[sarduakar2000]

For the last 10 years low interest environment I would encourage people to invest in equities or index funds because the returns can cover a portion of the cost of borrowing.

But this year onwards where interest rates are set to rise, I would encourage you to pay back as much as you can.

Sounds like good advice. Maybe can discuss with my wife once the 3 year lock-in period ends. It started only last year April.

 

[Jackal84]

Sounds like good advice. Maybe can discuss with my wife once the 3 year lock-in period ends. It started only last year April.

I would prefer banks who are transparent and peg interest rates to Sibor.

Banks like DBS no longer peg rates to Sibor. DBS have their own board rates which means they can charge whatever rates they want.

When you exit your lock in period, it'll be good to shortlist and refinance with banks who still peg rates to Sibor.

There's legal cost to refinance but the banks almost always reimburse you so that the refinancing is at $0 cost to you.

 

[sarduakar2000]

I would prefer banks who are transparent and peg interest rates to Sibor.

Banks like DBS no longer peg rates to Sibor. DBS have their own board rates which means they can charge whatever rates they want.

When you exit your lock in period, it'll be good to shortlist and refinance with banks who still peg rates to Sibor.

There's legal cost to refinance but the banks almost always reimburse you so that the refinancing is at $0 cost to you.

Ya. Kanna that when my lock in period is over and I missed refinancing for a year before I realised the rate is very high.

 

[Prof. Utonium]

Doesn't seem like there is a one size fits everyone answer. Everyone has a different opinion. Personally I prefer to pay up early and end the loan so that can relax in my old age. But today someone told me to drag the repayment as late as possible so that mortgage insurance will settle it. Hence I started this thread.

In my younger days, I too would had preferred to pay up early and wondered why my old man dragged the mortgages till he passed away prematurely. Mortgage insurance covered 40% balance (estimated) and with proper financial planning, mortgage loan is the best loan to have.

1. Cheap loans

2. Make your cash work harder for you

3. If touch wood gone earlier than expected, insurance covers for you while your cash which had been working harder for you would had compounded and benefited by your beneficiaries

4. If you don't sell the house, accrued interest is moot. If you do sell the house, you can still utilize it for your next purchase.