business loan singapore
Posted by wrherogos8 on Monday, September 24, 2012
As I write this article,
the SIBOR rates in Singapore are at an all time low. This means that
many Singaporeans especially the young middle class are buying expensive
properties because the current low mortgage rates allow them to afford a
huge loan amount. But property experts warn you to not get carried away
by this positive trend. The Singapore market cannot remain insulated
from what is happening around the world. If current trends are an
indication of the things to come, the world is headed for another
recession (or probably a depression), and Singapore is sure to become an
unwilling participant. The government too has warned that unemployment
rates are likely to increase in 2012. Property buyers, especially first
time buyers ought to understand the risk factors before committing
themselves to a loan that is more than likely to drag for 20 to 30
years. Here are a few things to understand when considering Singapore
home loan rates:- Banks are not charitable organizations and are here to
make money. Do not go hunting for a loan package that is the best in
the market; instead choose one that is best suited for you. Factors such
as your personal risk tolerance, market impact, and other personal
circumstances should be analyzed before buying a property. There are
hundreds of packages out there in the market, and each of these is
designed to suit the profile of the targeted segment.- SIBOR refers to
the Singapore Interbank Offered Rate and is the local equivalent of
LIBOR (London Interbank Offered Rate). It is determined by the
Association of Banks in Singapore (ABS). In Singapore, a fluctuation in
SIBOR rates stirs a lot of interest in the market, because a lot of
mortgage lenders use SIBOR rates as the benchmark for their loan
portfolios. Contrary to popular opinion SIBOR rates fluctuate as well,
albeit with much less volatility. And if you have chosen a loan with a
minimum lock-in period, you run the risk of being caught adverse SIBOR
trend, unless you are willing to pay the redemption penalty.- SOR or
Swap Offered Rate is also fixed by the Association of Banks in Singapore
and depends on complex forex rate calculations.For more info,Please
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Although SOR rates are traditionally known to be volatile, recent
trends have indicated that they are less than SIBOR. Loans based on the
SOR benchmark are ideal if you can afford risks.- Both SIBOR and SOR are
benchmarks that depend on market factors. A change in the market trend
is sure to affect these rates, and you cannot be immune to these
changes. Fixed interest rates are ideal if you are averse to risk. Thus,
you will be paying a fixed price even when the SIBOR and SOR rates
fluctuate. But most housing loan packages offer a fixed rate only for a
certain time, after which the interest rates are benchmarked at SIBOR or
SOR rates.Before you choose a home loan package, make sure that you
understand the basics of the interest rate structure, and other details.
You alone know your situation; hence decide for yourself the structure
that is best applicable for you.Information on this can be found at this site