Useful Tips To Help You Shop for a Home Loan To Save Money

Most consumers want to know which housing loan is the best in town. Unfortunately, that is the wrong question to ask.

There are more than 100 housing loan packages in the market and what is best for one person might not necessarily be the best for you. Each package has different features that are suitable for different needs.

Thus, a more appropriate question to ask is what are the factors that you should consider in choosing a housing loan? Here are some things you should note before signing on the dotted line for a home loan.

Pre-approval: Before you close a deal to buy a property, it is advisable for you to first get pre-approved for a bank loan.

With the setting up of the Credit Bureau in 2002, banks can now check your repayment history of loans and credit cards taken up with other banks. Were you late in paying instalments? Have you ever been sued? If the answer is yes, banks may not approve your loan application or they might approve a lower loan quantum. This could jeopardise your purchase of a property, and you might even have to forfeit the option money you paid.

Loan duration: A minimum loan duration is five years and the maximum 30 or 35 years, or till you are 65 or 70 years old, whichever is lower.

One way to decide on loan duration is to time the loan duration to match your intended retirement age. So, if you plan to retire by age 60, you should ensure the loan is fully paid up before you reach 60, rather than stretch it till you’re 65.

Floating or fixed: If you think interest rates have peaked and are likely to go down, you might want a floating rather than a fixed rate package.

However, if you’re worried about the possibility of banks revising interest rates upwards, you might want a package which fixes the interest rate for the next one to three years instead. It might not make sense to fix rates for more than three years since the lock-in period for most packages ends after three years. You can always shop around for a better package after that.

Flexibility of repayments: If you intend to make a lump sum repayment within the next one to three years, you should look for a package that offers you the flexibility to make such repayments without penalty. Some packages impose a penalty fee of up to 1.5 per cent of any lump sum repayment you make.

Transparency of rates: If you want to know the exact basis for the interest rates charged on the housing loan, you can consider loans pegged to interest rates that are publicly available, such as the three-month Singapore Inter-bank Offer rate (Sibor) or Swap Offer Rate (SOR) which move according to market conditions.

Basically, a home buyer pays an agreed percentage above the variable SOR for a specified period. You might want to consider such a package if transparency is a key issue for you and you are of the view that Sibor or SOR rates are falling rather than rising.

Penalties: Ask if any penalty will be imposed if you make a full redemption of your loan and how long the penalty period is. Currently, there are some housing loan packages with zero penalty period, while most loans typically have a penalty period of one to three years.

Interest-only: If you are a high income earner and in high tax bracket, choosing an interest-only mortgage might make sense. You benefit through savings in income tax as the interest portion of loan instalments for investment properties is tax-deductible.

This package also works well for short-term investors. By paying back only the interest, investors would benefit from lower cash outflow until they sell the property. As a result, they may be able to invest in two properties instead of one.

Interest-offset: If you have substantial cash you might want to consider an interest-offset mortgage instead. This basically links your current account to your home loan. The interest earned in your current account is the same rate as that charged on your home loan. By offsetting the interest earned on your current account against your home loan interest, you can enjoy big savings – in time and money.

Every dollar you put into this current account would have same effect as making a partial repayment of your loan, but give you the added flexibility of drawing down the cash in the current account if you need to. Whereas if you do a lump sum prepayment, the cash is ‘locked’ in the property and you lose liquidity. Thus, an interest offset package enables you to pay a lower effective rate of interest on your housing loan so that a bigger portion of your monthly instalment goes toward reducing the principal. This allows you to pay off your loan sooner and pay less in interest.

Promotions: Sometimes, banks might offer special promotional packages. If you engage the services of a mortgage broker, he would be able to provide you updated information on such promotions which could translate to additional interest savings for you.

Why better to apply loan through a Competent Mortgage Broker? In the past, when consumers shopped for home loans, they had to contact each bank individually to gather information. This a tedious process that takes up a lot of time. In the last few years, with the emergence of independent mortgage brokers in Singapore, home loan shopping and comparison have been made easier.

Basically, an independent mortgage broker who knows your requirements can help you zoom in on the most attractive home loan packages. You typically do not have to pay for the service of a mortgage broker as banks pay them a fee as they also help banks save on staff costs and resources.

In more advanced countries such as the US and Australia, people usually apply for home loans through a mortgage broker rather than go to the bank directly. In Singapore, many people are still unaware of the services and benefits of engaging a mortgage broker, but things are likely to change with public education and increasing awareness.

I Always Get the Perfect Parking Space

I want to talk today about something that we tend to take for granted when it suits us, but we disbelieve when we are made aware of us.

I am referring to the amazing ability we have to know what will happen to us before it happens. Sometimes we have as little as five seconds prior notice, and other times we have as much prior notice as we decide we want.

For example, you think of someone and the phone rings and the caller is the person you have been thinking about. Or for a few days you keep thinking of a person you have not been in contact with, and “out of the blue” you get an email or a phone call from this person, or you bump into them at the supermarket.

We have all had experiences where we struggled with a problem and went to sleep and woke up with the answer, or where we have a sudden thought from “nowhere” that reminds us of an appointment that we had forgotten. Where do these thoughts come from?

And we have all met people whom we disliked even before we were introduced to them, for no obvious reason – or the opposite, where we felt an attraction to a complete stranger like a fellow commuter or a person from a group that we would not normally mix with, and became friends with that person.

In all those instances we are dealing with the same source – what I like to describe as the quantum soup of the subconscious.

The subconscious is the source of all our thoughts and actions. We can imagine it as being a massive store-room that contains all that ever was, is and will be. We take from that storeroom all the time, use what we need and put back into storage.

Various people, from lottery winners to rape victims, have claimed that they “had always known” that they would have the experience. How did they know? Simple. They are aware of the quantum vacuum and they allow experiences from there to materialize and then they live those experiences.

But tell those same people who have all these experiences to visualize a parking space next time they go shopping, and most of them will say they cannot do it. Because suddenly you require them to do consciously what they do unconsciously all the time.

We have continuous access to our subconscious, and we use it all the time. By the time an idea forms in our minds, that idea have been retrieved form the subconscious and approved by the brain, and is ready to face the world.

When we get ideas from “nowhere” or from “out of the blue” we simply access our subconscious without even being aware of it – much like stumbling out of bed after a deep sleep, making coffee, and then wondering where the coffee came from once we are awake.

People that are aware of this process, consciously tap into their subconscious and retrieve at will what they require to achieve amazing things in their lives.

You can practice using this ability consciously by starting with the simple exercise of “ordering” a parking space when you leave home, or by “scanning” a large parking area to find the one elusive parking space that everyone else seems to miss. Of course a large part of the success of this is that you need to understand with your brain that it is possible, and also believe with your heart and soul. If you cannot do that, you have too many fears and preconceived ideas in the way.

I know there are people who read this and say it is not possible. As the saying goes, for those that do not believe no proof will be adequate, and for those that do believe, no proof is necessary.

I am not here to convince you that there is more to life than this world. You decide for yourself. What I do know is that if we both want parking at the same place and you have doubts, I will get the parking space. Sorry!

How Shopping For Auto Insurance Quotes Online Reminds Us to Be Grateful For the Internet

Quantum shopping. You enter one set of data, and receive in reply many auto insurance quotes online. It’s fast, and it’s easy. Ah, the modern age! Remember the old days?

Some insurance salesmen (and they were all men at the time) went door to door or tried to sell insurance to their friends and families. It wasn’t quite as bad as Tupperware, and was certainly handier to have around in case of an accident. Still, insurance salesmen had to really hoof it to get information out to the people, and that was in the days before there was a lot of competition.

Speed ahead to the era of electricity, phones, cars, and major insurance companies carrying multiple types of policies. Even thirty short years ago, a person who wanted insurance generally looked up the name of their local insurance company, called up, made an appointment, and settled down for at least an hour lecture about what kind of auto policy they should have. How many of our parents and grandparents bought the first auto policy they saw and paid through the nose for it just to avoid death by boredom? The mind boggles. The world was bleak before auto insurance quotes online!

Skip ahead just a few years. There was a lot more competition, a lot more awareness of the options available. To really find out what those options were, one still had to pick up the phone and call all of those agencies. The lectures were shorter, and many agencies could provide you with a preliminary quote on the phone, though many still wouldn’t do so without your driving record in hand. How many quotes could you get without multiple calls, if not multiple meetings?

Now, we’re in the fast lane. You are in charge of your auto insurance destiny. At three in the morning, you can hop online, enter your information, provide your own driving record data, and send it all to many, many local and national companies who are basically willing to slit each other’s throats to get your business.

When you shop for auto insurance quotes online, you’ll get answers from multiple insurance agencies that you can review at your leisure instead of being asked to sign a contract immediately while sitting in some office. You get to read the information and explanations of premiums. If they make sense, great! If they don’t, there’s no lecture in an office from a suit droning on and on- you’ll contact an informed representative who can answer your questions and address your concerns, and that’s only if the information isn’t in their online help section in the first place.

It’s not quite quantum, and, let’s face it, nobody wants to think about the insurance premiums for Marty McFly’s flying car, but the sheer ease and comfort of getting your auto insurance quotes online…it makes you glad to live in the good, new days, doesn’t it?