Re-Finance of HDB Home Loan

[30plus]

A few things:


1. Will you sell your house in near future? Subsidy is subject to 3 year claw back. You may have more penalty because of the new lock in period.

2. You can not expect the floating rate stays so low for next few years.

3. Double check with your old bank to see which date you can pay back. You may attract unnecessary penalty. Some banks are quite strict on that.

[tech_wizard]

30plus:

A few things:


1. Will you sell your house in near future? Subsidy is subject to 3 year claw back. You may have more penalty because of the new lock in period.

REPLY : Will not be selling, we will be keeping both. As discuused with the Mrs. if one day our kids decide to kick us out of the house we move back to the HDB. But for the meantime we will be renting out the flat to help pay for the mortage on the HDB.

2. You can not expect the floating rate stays so low for next few years.

REPLY: We plan to pay off the loan on the HDB when at the end of the 3 years. Actually we can afford to pay off the loan now but after much consideration we decided to keep the cash in the event of emergency.. Medical, Unemployment, Death...etc

3. Double check with your old bank to see which date you can pay back. You may attract unnecessary penalty. Some banks are quite strict on that.

REPLY: I have email confirmation from my current bank there is no penalty so long as we give them 3 months notice, the notice can be served immediately so long as the start of the new mortage does not fall within the lock-in period.

[titank]

Recently a bank also asking me to refinance my HDB home loan to bank loan. What they trying to say I can get a lot of savings as the interest rate is a lot lower than my current paying at 2.6%. My home loan still have another 10 years more to go with HDB.

[hquek]

titank:

Recently a bank also asking me to refinance my HDB home loan to bank loan. What they trying to say I can get a lot of savings as the interest rate is a lot lower than my current paying at 2.6%. My home loan still have another 10 years more to go with HDB.

if your's is with hdb, at the hdb rate, DON\"T change. Banks entice you with low low rates, but they will progressively go up. I refinanced some years back at 1%. But after 2 years, it started going up and up and up - I receive letter every few months telling me there is a change in rates.

And once the loan amount is less than 100K, nobody will want to talk about refinancing. Ended up I paid 4+% for a few years for my hdb flat. Story ended when I terminated my loan early via capital repayment. Now I can rest easy.

[teh_oh]

Hi,


If
1) i have a lump sum at my CPF, should I do capital repayment? i read something about 3.5% interest for first $60k in the cpf account, but if my RA and MA already hit somewhere near $60k, does it mean that my OA will only attract 2.5%?
2) if I have the same outstanding amount as TS and manage to accumulate the same amount of cash on hand, do i do repayment or is it wiser to invest in another property? What is the min. sum component one need to maintain at CPF for multiple properties right now? Does this apply to both co-owners or only the co-owner who is working? Can we pledge our HDB instead of setting aside this amount?

Thanks. We are thinking of getting a second property jointly with our parents so that they can have rental income when they retire in a few years time (as well as long term investment as well as they can still stay at their place without moving in with us :oops:).

[hquek]

teh_oh:

Hi,


If
1) i have a lump sum at my CPF, should I do capital repayment? i read something about 3.5% interest for first $60k in the cpf account, but if my RA and MA already hit somewhere near $60k, does it mean that my OA will only attract 2.5%?
2) if I have the same outstanding amount as TS and manage to accumulate the same amount of cash on hand, do i do repayment or is it wiser to invest in another property? What is the min. sum component one need to maintain at CPF for multiple properties right now? Does this apply to both co-owners or only the co-owner who is working? Can we pledge our HDB instead of setting aside this amount?

Thanks. We are thinking of getting a second property jointly with our parents so that they can have rental income when they retire in a few years time (as well as long term investment as well as they can still stay at their place without moving in with us :oops:).

My non-finance point of view. Always have some buffer cash on hand in case of emergency 6-9 months the minimum. Capital repayment depends on how much interest your loan is attracting vs how much interest/dividend your cash/cpf is earning. If yours is hdb rate (ie 2.6%), honestly I think you can hold on to your hoard and get another investment (assuming you have bandwidth). This cos hdb rate is really very very good and not likely to hike suddenly.

As for 2nd property, there is a mode of calculating. you don't have to maintain 100% of the min sum (think it's about 120K). I was surprised when the cpf staff told me. but if you are getting a mortgage, the fact that you have an outstanding loan will mean you can only get a very low quantum; plus if you are buying with parents, you may not be able to get long loan tenure (becos banks will use the oldest person's age) - so it depends on the situation

[titank]

hquek:

titank:

Recently a bank also asking me to refinance my HDB home loan to bank loan. What they trying to say I can get a lot of savings as the interest rate is a lot lower than my current paying at 2.6%. My home loan still have another 10 years more to go with HDB.

if your's is with hdb, at the hdb rate, DON\"T change. Banks entice you with low low rates, but they will progressively go up. I refinanced some years back at 1%. But after 2 years, it started going up and up and up - I receive letter every few months telling me there is a change in rates.

And once the loan amount is less than 100K, nobody will want to talk about refinancing. Ended up I paid 4+% for a few years for my hdb flat. Story ended when I terminated my loan early via capital repayment. Now I can rest easy.

Thanks for your great advice, almost going to fall into the trap by this bank people!
Guess I just be a good boy staying with HDB loan. If the event really jobless, I guess HDB will not be no mercy & collected back the flat?
Their primary objective is home for every Singaporeans?

[titank]

hquek:

titank:

Recently a bank also asking me to refinance my HDB home loan to bank loan. What they trying to say I can get a lot of savings as the interest rate is a lot lower than my current paying at 2.6%. My home loan still have another 10 years more to go with HDB.

if your's is with hdb, at the hdb rate, DON\"T change. Banks entice you with low low rates, but they will progressively go up. I refinanced some years back at 1%. But after 2 years, it started going up and up and up - I receive letter every few months telling me there is a change in rates.

And once the loan amount is less than 100K, nobody will want to talk about refinancing. Ended up I paid 4+% for a few years for my hdb flat. Story ended when I terminated my loan early via capital repayment. Now I can rest easy.

Thanks for your great advice, almost going to fall into the trap by this bank people!
Guess I just be a good boy staying with HDB loan. If the event really jobless, I guess HDB will not be no mercy & collected back the flat?
Their primary objective is home for every Singaporeans?