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Banks Refuse to Lend $ to Buy PHoles! See Liao!

makapaaa

Alfrescian (Inf)
Asset
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Home > Invest > Story
</TR>
<!-- headline one : start --><TR>Home loans harder to get as prices fall
</TR><!-- headline one : end --><TR>Check if bank can meet unit's valuation to avoid overpaying for the property </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Joyce Teo, Property Correspondent
</TD></TR><!-- show image if available --></TBODY></TABLE>




<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->
A couple of telling anecdotes illustrate the unexpected glitches that home buyers can face as property prices start to fall.
A Spring Grove condominium unit owner was denied the chance to take advantage of lower interest rates by refinancing his devalued property without coughing up more hard-earned cash.
The owner had to make up the shortfall because the reduced value of the Grange Road unit meant the bank could not extend a large enough loan.
Another buyer had to cancel his purchase recently after he learnt that banks' valuation of the property was less than what he was supposed to pay.
The banks could not offer him the loan he needed as the collateral was inadequate.
This is the brave new world of home loans as property values fall amid the global financial crisis and banks tighten lending.
Banks are still dishing out home loans but are much more selective these days, mortgage consultants said.
Banks can grant only up to 90 per cent of the purchase price or valuation, whichever is lower. So if the sale price of a property exceeds the valuation - which is determined by an independent professional - the buyer will have to make up the shortfall.
Amid poor demand and falling prices, banks are sticking to lower property valuations in anticipation of further price falls.
'OCBC Bank engages independent, third-party valuers to determine the open market value of properties and there has been evidence of a fairly strong downward trend in property valuation,' said its head of consumer secured lending Gregory Chan.
The buyer who cancelled his property deal realised that the yet-to-be-completed 1,000 sq ft condo unit was worth less than the $2 million he was going to pay.
'No bank can match the property's valuation as there was a recent sub-sale deal done at 15 per cent below the developers' price of $2,000 per sq ft,' said Mr Dennis Ng, spokesman for mortgage consultancy portal www.HousingLoanSG.com
Buyers can avoid overpaying for a property by checking to see if the banks can match the valuation to the property's purchase price, he said.
In today's market, those still keen on taking out a loan for a home they intend to live in should also know that most banks now prefer to offer up to only 80 per cent financing, said Ms Ally Yang, a chief mortgage consultant at www.homeloan.com.sg
OCBC Bank said it continues to offer housing loan packages for 80 per cent financing. It also offers 90 per cent financing on a case-by-case basis if the applicant meets its credit assessment criteria.
HSBC Singapore's head of personal financial services, Mr Sebastian Arcuri, said: 'Customers can still obtain home loans of up to 90 per cent valuation or purchase price if their financial profile can support it and their application meets the bank's criteria.'
But there are signs that banks are starting to be more stringent in their credit criteria and they are very selective in granting a 90 per cent loan, said Mr Ng.
'A 90 per cent home loan is now more selectively granted to consumers with very good profile who are buying a property as their first home.'
Investors will find it tougher to get a bigger loan these days. Banks used to offer more than 85 per cent financing for investment properties but all of them, except DBS Bank, no longer do so, said Ms Yang.
This means buyers have to be prepared to cough up more cash for investment property buys.
Those looking at refinancing may be in for a surprise if they bought their properties in last year's booming market.
The Spring Grove unit in question was bought by a South Korean expatriate for $2.58 million or $1,442 per sq ft on a floating rate package.
He now pays 3.5 per cent interest on his 80 per cent loan and was looking to halve his interest payments by switching to a package pegged to the three- month Singapore Interbank Offered Rate, said Ms Yang.
But a check with two banks found that the valuation for his property was $2 million or $2.22 million. If he wants to refinance at these valuations, he would need to pay up to $180,000 to top up his loan, currently at $1.78 million.
Consumers seeking a loan for their property purchase should get prior approval or have more cash on hand. 'They should approach a mortgage specialist for a joint assessment if they are unsure whether they can afford the home purchase,' said OCBC's Mr Chan.
'Things are quite fluid these days so buyers should re-check their loan eligibility after one month,' said Mr Ng. [email protected]
 

theblackhole

Alfrescian (InfP)
Generous Asset
banks are lidat...damned merciless and cruel on the small men..but knn!!! lost damned jialat to the big con men !!! knn! what sort of banking system is this!!!

even my small little credit line has been narrowed to some miserable number...nnk!!!
 

downgrader

Alfrescian
Loyal
i already sounded out many months ago... people say i talk cock, now they left holding the hot potato when they could have cut losses long time ago

that's why i salute these people with balls of steel, die die also don't cut loss until the sheriff comes to paste sticker


<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Home > Invest > Story
</TR>
<!-- headline one : start --><TR>Home loans harder to get as prices fall
</TR><!-- headline one : end --><TR>Check if bank can meet unit's valuation to avoid overpaying for the property </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Joyce Teo, Property Correspondent
</TD></TR><!-- show image if available --></TBODY></TABLE>




<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->
A couple of telling anecdotes illustrate the unexpected glitches that home buyers can face as property prices start to fall.
A Spring Grove condominium unit owner was denied the chance to take advantage of lower interest rates by refinancing his devalued property without coughing up more hard-earned cash.
The owner had to make up the shortfall because the reduced value of the Grange Road unit meant the bank could not extend a large enough loan.
Another buyer had to cancel his purchase recently after he learnt that banks' valuation of the property was less than what he was supposed to pay.
The banks could not offer him the loan he needed as the collateral was inadequate.
This is the brave new world of home loans as property values fall amid the global financial crisis and banks tighten lending.
Banks are still dishing out home loans but are much more selective these days, mortgage consultants said.
Banks can grant only up to 90 per cent of the purchase price or valuation, whichever is lower. So if the sale price of a property exceeds the valuation - which is determined by an independent professional - the buyer will have to make up the shortfall.
Amid poor demand and falling prices, banks are sticking to lower property valuations in anticipation of further price falls.
'OCBC Bank engages independent, third-party valuers to determine the open market value of properties and there has been evidence of a fairly strong downward trend in property valuation,' said its head of consumer secured lending Gregory Chan.
The buyer who cancelled his property deal realised that the yet-to-be-completed 1,000 sq ft condo unit was worth less than the $2 million he was going to pay.
'No bank can match the property's valuation as there was a recent sub-sale deal done at 15 per cent below the developers' price of $2,000 per sq ft,' said Mr Dennis Ng, spokesman for mortgage consultancy portal www.HousingLoanSG.com
Buyers can avoid overpaying for a property by checking to see if the banks can match the valuation to the property's purchase price, he said.
In today's market, those still keen on taking out a loan for a home they intend to live in should also know that most banks now prefer to offer up to only 80 per cent financing, said Ms Ally Yang, a chief mortgage consultant at www.homeloan.com.sg
OCBC Bank said it continues to offer housing loan packages for 80 per cent financing. It also offers 90 per cent financing on a case-by-case basis if the applicant meets its credit assessment criteria.
HSBC Singapore's head of personal financial services, Mr Sebastian Arcuri, said: 'Customers can still obtain home loans of up to 90 per cent valuation or purchase price if their financial profile can support it and their application meets the bank's criteria.'
But there are signs that banks are starting to be more stringent in their credit criteria and they are very selective in granting a 90 per cent loan, said Mr Ng.
'A 90 per cent home loan is now more selectively granted to consumers with very good profile who are buying a property as their first home.'
Investors will find it tougher to get a bigger loan these days. Banks used to offer more than 85 per cent financing for investment properties but all of them, except DBS Bank, no longer do so, said Ms Yang.
This means buyers have to be prepared to cough up more cash for investment property buys.
Those looking at refinancing may be in for a surprise if they bought their properties in last year's booming market.
The Spring Grove unit in question was bought by a South Korean expatriate for $2.58 million or $1,442 per sq ft on a floating rate package.
He now pays 3.5 per cent interest on his 80 per cent loan and was looking to halve his interest payments by switching to a package pegged to the three- month Singapore Interbank Offered Rate, said Ms Yang.
But a check with two banks found that the valuation for his property was $2 million or $2.22 million. If he wants to refinance at these valuations, he would need to pay up to $180,000 to top up his loan, currently at $1.78 million.
Consumers seeking a loan for their property purchase should get prior approval or have more cash on hand. 'They should approach a mortgage specialist for a joint assessment if they are unsure whether they can afford the home purchase,' said OCBC's Mr Chan.
'Things are quite fluid these days so buyers should re-check their loan eligibility after one month,' said Mr Ng. [email protected]
 

jw5

Moderator
Moderator
Loyal
banks are lidat...damned merciless and cruel on the small men..but knn!!! lost damned jialat to the big con men !!! knn! what sort of banking system is this!!!

even my small little credit line has been narrowed to some miserable number...nnk!!!
Also known as fair weathered friends. :(
 

2lanu

Alfrescian
Loyal
Bookmark this and we can used this thread for the future.

Banks are like that. When it's sunny day, they lend you the umbrella. When rainy day, it's time to collect back the umbrella when people need most!
 

KopiJoe

Alfrescian
Loyal
Banks are vultures....I cannot forget the day that a local bank screwed me hard when I refinance my mortgage with them...sneaky divide my mortgage loan into 2 of which one can be financed by CPF....i was naive and innocent those days and now has learnt the hard way...happy to report that that loan has since been repaid by disposing off the property....remember banks are vultures and have no mercy.
 

Cestbon

Alfrescian (Inf)
Asset
Those can afford to buy $2M property still bla bla bla cannot get loan, they are suppose to be rich can downpayment at least 50%. Those cannot afford still want to buy bigger HAT that his own HEAD.
I only pitty those cannot afford loan for 3 room/smaller HDB flat.
 

BlueCat

Alfrescian
Loyal
most of the banks here lose big big.
think instead they will welcome deposits to cushion the tsunami that is coming their ways.
 

ah_phah

Alfrescian
Loyal
since when was the bank fair?

savings interest p.a is about less than 1%
loan interest p.a. range from 4-19% (depending what kinda loan & mortgage)
 

borom

Alfrescian (Inf)
Asset
Banks are like that. When it's sunny day, they lend you the umbrella. When rainy day, it's time to collect back the umbrella when people need most!

That's the common experience in Singapore.
However many forget that for the man in the street, the more you borrow, the more you are at the bank's mercy.
Many also do not realise that a 10 year loan may end up doubling your liabilities to the bank.

Actually now is the best time to borrow as the bank's are likely to be very conservative ( kiasu) and if the bank's agree to lend to you means that most likely you have made a correct decision (cash flow wise).

The most dangerous(risky) loans are those taken in good times when banks fight for market share and throw caution to the wind (look at the sub prime as an example).

Any banker can tell you this " bad loans are made in good times"'.
 
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