Singapore Property Investors – Can You Infer Something From DBS?

January 19, 2010 by srgproperty
Filed under: real estate investor

DBS revises term loan borrowing quantum from 70% to 80%. Term loans are also known as equity loans. These type of loans allow property owners to take cash out of a property whose valuation have risen by refinancing Cialis these properties.

For example (if CPF is not used)

A property which was bought for $1m dollars with an outstanding loan of 800k.

If the property valuation increases to $1.2m, this Singapore property owner can go to a bank to refinance their home loans. At $1.2m valuation and at a Loan to valuation of 80%, the bank can lend you $960,000.

If your new possible loan size is $960,000 that means you will be able to refinance your $800,000 home loan + a term loans (or equity loan) for $160,000.

This immediately avails $160,000 (after 12 weeks) of cash if your income can support $960,000 of loan quantum.

These cash out is not allowed for down payment for another property.

The actual impact or increase in liquidity is likely to be limited. These lending changes are not announced openly, as a result, they are not likely to lead to people suddenly going to the bank to apply to Refinance Singapore Home loans with “cash out”.

In Singapore, Monetary Authority of Singapore (MAS) do not make a lot of announcements unlike the federal reserve in the USA.

Therefore if we use DBSas a possible proxy for the Singapore government’s policies, it does possibly infer a credit easing stance, albeit a very minor one. This could mean that credit and financial risks have abated and the climate is more positive for lending or it could be just a minor adjustment to keep Term loan and home loan maximum Loan to valuation cap in-line with home loans loan-to-valuation caps.

Easing of Credit typically fuel property asset prices.

What does it mean for Singapore Property Buyers? We do not think this is a big tide of change, rather it should be taken as just one more positive signal (out of many other signals) for property buying rather than a definitive BUY signal.

PropertyBuyer.com.sg is a Singapore mortgage consultant that is a research-focused home loan and refinancing company. We do not like to speculate, but rather present facts as best as we know it. As the world is becoming increasingly connected through trade and currency flows, economic modeling and forecasting becomes harder with many variables, including but not limited to Government policy interventions, we urge a sensible approach to property buyer or refinancing. We are not an expert in economics, we merely present you the facts and you make your own decision. You can SMS us at +65-9782-8606 to check your home loan affordability prior to committing to a Singapore property purchase.

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