Today, the Monetary Authority of Singapore (MAS) is known for broadening its refinancing exemptions and regulations most especially for refinancing loans. This affects owner-occupied properties which were acquired prior to the Total Debt Servicing Ratio or TDSR. But then, the TDSR has a threshold of 60%. This is still applicable to those who have investment property loans.
Before, there was a transition period which was set on June 30, 2017. This was meant to the refinancing of any investment property loans which are over 60% threshold. But then, in order to avail the refinancing scheme, the OTP must be granted even before June 29, 2013. There is also a need to fulfill the assessment of the credit most especially if it is directed to the financing institution. As this is the case, you must agree and commit to the debt reduction plan which is known to be the point of financing.
More about Refinancing in Singapore
These are some of the facts you must remember about the way refinancing works in Singapore:
- Refinancing only works for those who do not have any other obligations to other institutions. Applying for it may be impossible if it is not done in compliance with the regulations of the TDSR. With this, borrowers must begin cutting their debts down if they intend to have a clean cash flow on a monthly basis.
- To have a home loan is considered to be a long-term commitment. With this, you must know if refinancing is a working solution for you. It has always been the best to include other fees and charges most especially in the computation that you have. This is a way so that you may earn a good grasp of the entire difference. As an addition to this, it is a good idea to have the service and terms of a package. This should be considered.
- Most banks offer a refinancing or new loan package. This is normally floating, fixed or of variable rate. But then, there are banks out there which have hybrid bundles. You can always think about hybrid bundle offerings. In order to do this, review your insurance and investment portfolio. This is a chance to learn if you are actually near to the achievement of your financial goals. Please remember that you are discouraged to apply for refinancing if you are still with an existing bank. This may only vary if you have a substantial rate.
Indeed, refinancing gives you the chance to scout for better rates which may lower your monthly obligations and payments. Doing this will enable you to raise your capital gains which are found on sale. Indeed, refinancing has turned out to be typical in Singapore because of the competition going on for banks. The same is also true for the development of most home loan packages out there. This will just end up with your package in a bank and it will carry on the payments which are intended for other banks. Most of these come with lower rates and more sound loan offering.