When it comes to home financing, there are two main loan types on the market: Singapore Interbank Offered Rate (SIBOR) loan and Fixed Home Rate (FHR) loan. What is the difference between the two? And how do you know which loan works better for you? Let us break it down for you.WHAT IS A SIBOR LOAN?Let’s start by understanding what a SIBOR rate is. In a nutshell, it is the median rate at which Singapore banks lend money. The rate is government regulated and therefore, public information.A SIBOR home loan has an interest rate that consists of the bank’s spread (how much the bank wants to charge), plus the prevailing SIBOR rate. So if the SIBOR rate is 1.7 per cent, and the bank’s spread is 0.7 per cent, then your interest rate would be (1.7 + 0.7 = 2.4 per cent).There’s an interest rate period indicator, such as one-month SIBOR, three-month SIBOR, and so forth (it can go all the way to 12-month SIBOR, but one-month and three-month are the most … [Read more...] about FHR vs SIBOR: which home mortgage loan will work better for me?
Who offers interest only mortgage loans
By Christina Rexrode The Wall Street Journal Thu., Nov. 22, 2018 The decade of low mortgage rates is winding down. Its end will be particularly painful for the nonbanks that now control the bulk of the market. Nonbank lenders—less known and less regulated than their bank counterparts—have enjoyed a yearslong renaissance, with many springing up or expanding after the financial crisis. That also means some of those lenders have never navigated an era like today’s, marked by rising rates and cooling home sales. Many are dependent on refinancings, which are shrinking rapidly. And already some lenders are selling themselves, shutting down or laying off workers. It is a reminder of how rising rates are roiling the mortgage market in all corners. The average rate on a 30-year fixed-rate mortgage is 4.81%, according to data released Wednesday by Freddie Mac, up from 3.99% at the end of last year. For consumers, the higher rates have made homes less affordable … [Read more...] about Rising rates are roiling nonbank mortgage lenders
Almost half of new mortgages in the second quarter had a loan-to-value (LTV) ratio of more than 90%, and those with a loan-to-income (LTI) ratio above five times made up nearly one-third, says a senior official at the Bank of Thailand.The data points to deteriorating credit standards, explaining why the central bank is concerned about mortgage lending. The central bank plans to outline measures to supervise mortgage lending today. Mortgages with LTV ratios of more than 90% surged considerably to 49% of new housing loans in the second quarter this year, up from around 35% in the first quarter of 2014, said Bank of Thailand assistant governor Jaturong Jantarangs. The central bank has issued guidance requesting financial institutions avoid providing mortgages with LTV ratios of more than 95% for low-rise residential projects and 90% for high-rise ones. LTV is a lending risk assessment that indicates the ratio of a loan to the value of an asset purchased. Typically, a loan with a lower … [Read more...] about BoT statistics point to riskier mortgages
By Tracy Hanes Special to the Star Tues., July 31, 2018 If you’re looking for a mortgage on a home purchase — or to renew one on a home you already own — is a mortgage broker or a bank your best option? The main difference is a bank mortgage officer represents only the products their institution offers, while a mortgage broker is an intermediary who works with multiple lenders and is paid a referral fee by the lenders. Mortgage brokers are regulated in Ontario by the Financial Services Commission and require a licence. While traditional banks still are used for mortgages by the majority of homeowners, “use of brokers is trending upward,” notes Monica Guido, manager of client relations with Canada Mortgage and Housing Corp. “It’s higher among first-time buyers. Finding a deal, or the desire to get the best rate, is the key reason people use a broker.” Because mortgage brokers work with many lenders, including … [Read more...] about Mortgage brokers vs. banks: the pros and cons
By Tara Deschamps The Canadian Press Mon., March 26, 2018 Samantha Brookes has been warning Canadians to take a close look at the clauses in their mortgage contracts for years, but her refrain has become a bit more prevalent in recent months. Since the Office of the Superintendent of Financial Institutions’ mortgage stress test was implemented in January, the founder of the Mortgages of Canada brokerage has seen “a huge influx” of Canadians who fail to qualify for a bank mortgage turning to alternative lenders that range from risky loan sharks to larger, more conventional companies like Home Trust. While alternative lenders can provide a lifeline for Canadians who have run out of other financing options, Brookes said they come with pitfalls for those who don’t bother looking at the fine print. “You need to read those contracts,” she said. “(With an alternative lender), the interest rates are higher, the qualifying rate is … [Read more...] about What to know if you’re considering a mortgage from an alternative lender