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A fixed rate home loan refers to a home loan where the interest rate are fixed over the entire tenure of the loan. This allows you (the borrower) to accurately predict your future re-payments.
A floating rate home loan refers to a home loan where the interest rates fluctuate with market conditions. These rates are based on a reference rate (e.g. CPI & LIBOR). Market fluctuations in the reference rates will affect the floating interest rate of your home loans accordingly.
Refinancing is referred to as replacing your existing home loan package with a new one. In general, Refinancing allows you to take advantage of better interest rates. The new loan pays off your current debt, so that your current debt is not eliminated when you refinance. Thus, the new loan should ideally possess better features that will improve your financial position.
The Total Debt Service Ratio (TDSR) is the percentage of Gross Annual Income required to cover all your liabilities in addition to the cost of servicing the property and mortgage payments (Principal, Taxes, Interest).
The Mortgage Servicing Ratio (MSR) limits the amount you can borrow on the purchase of an HDB or EC to 30% of your gross monthly income. If you are looking to purchase a HDB resale flat or EC, you’ll have to deal with the MSR along with the TDSR.
Three types of duties payable on the sale, purchase, acquisition or disposal of properties in Singapore:
- Buyer’s Stamp Duty (BSD)
- Additional Buyer’s Stamp Duty (ABSD)
- Seller’s Stamp Duty (SSD)
BSD is payable on the purchase or acquisition of properties. Since 20 Feb 2018, there are differentiated BSD rates between residential and non-residential properties. The top marginal BSD rate for acquisition of residential properties on or after 20 Feb 2018 is 4%.
Conveyancing is defined as the transfer of legal title of real property from one person to another. Such transactions would usually require the expertise of a Conveyancing lawyer.
A term loan (A.K.A. Cash Out Refinancing / Mortgage Equity Withdrawal Loans) is a type of loan where you use the equity of your property as means of collateral. It could be for Business Loans or for Personal Loans If your property has increased in value over time, a home equity loan may be the best method of borrowing.