Singapore is a massively preferred location for innovation, due to the work and commitment of its inhabitants. In the near future, though, it could be facing an oversupply in the residential market, which is mostly because of the population growth, that increased at its slowest in the last 9 years. In June 2013 the population of Singapore reached 5.4 million, and very noteworthy is that the non-resident population rose a mere 4 %, in comparison with previous years, when it rose up to 20%.The population growth is likely to exceed demand in the following years, which will have a few consequences, such as higher vacancy rates, declines in rents and prices. Another factor that may contribute to this is the large number of homes to be completed between years 2013 and 2017 – approximately 100,000 homes, which means that a bumper supply of homes is due to be completed.Singapore is known for having one of the most expensive real estate markets in the world, but because of this, home property prices could be headed for a correction of up to 20 % by 2015, according to Barclays. This has a positive impact on home buyers who would like to purchase their house using a home loan, because banks forecast a fall of up to 15 in prices by year 2015.The URA (Urban Redevelopment Authority) predicts that up to 95,000 private units will come in the following years, as well as 25,000-27,000 public housing flats a year. The housing supply is expected to average 40,000 units annually, experiencing a peak of 47,000 in 2015. This will lead to vacancy rates rising up to 10 %, as opposed to the current 5.6 %. Historically, it has been observed that rents and prices decline at vacancy rates of 8 percent.It is a common fact that Singapore mortgage rates are normally pegged to SIBOR (Singapore Interbank Offered Rate), which is the interest rate at which banks that are subject to Asian time zones are able to borrow from other banks located in the region. It is a daily reference, set by the ABS (Association of Banks in Singapore). Because of its political correctness and stability, location, and strict regulations, as well as the large amount of foreign investments undertaken in this city state, Singapore is a major location of Asian finance, which makes SIBOR a reference rate for borrowers or lenders involved in the Asian market.
If you have a bad credit rating then it becomes more difficult for you to get approval for a home loan in normal rate of interest. That means, borrowing the desired amount gets more expensive along with less repayment options.However, these days, there is some provision that makes it possible for people with low credit score to get approval on their loan application. Here are the five strategies that may increase your chances, despite of having a bad credit rating –
Use security or collateral
You can use assets like your home, property, boat or car as collateral to secure your loan. Most of the lenders are ready to offer loan based on the equity or valuation of the collateral.
Apply for a loan from credit union
A credit union is also a favourable option for many to seek home loan without much hassles. These organisations derive money from investors or individuals and do not have contact with banks. Therefore, the documentation process is not complicated. However, they follow specific criteria to approve bad credit loans, as they do not aim to lose their money.
Find a co-signer or guarantor
If you have a guarantor or co-signer who has a good credit rating and constant source of income, it will become easy for you to get a quick approval on a home loan. However, in case you are not able to repay the loan amount as per the terms, than your co-signer will pay the loan amount on your behalf. All it takes is to convince your guarantor that you do not have any intentions to put him or her under this sort of compromising situation.
Declare your savings present in your saving account
Declaring your savings account serve as an assurance that you have sufficient fund in your account, if in case there will be any shortage of fixed or regular income. There is no need to have a huge amount, as even in small savings, you can prove to a moneylender that you are capable of repaying the loan.
Try to improve your credit score with the help of a financial advisor
Is there any irrelevant details mentioned in your credit report that is affecting your credit rating? It might be possible that a poor credit rating may be due to delays in paying bills that had already been settled. Thus, it is recommended to consult this matter with a financial advisor who help you to improve credit score with their proven tactics.
Most of us tend to take the safety of our home and its contents for granted. This means that we either do not have home insurance or, for those who do, the cover is likely to be inadequate.For those shopping for a suitable home cover, here are some considerations (the following points are based on home insurance law in Singapore):Risks covered in home insuranceFire insurance is a basic protection cover and it covers the building and/or its contents. According to Singapore’s General Insurance Association (GIA), fire insurance generally covers the building structure, the permanent fixtures and fittings such as built-in cabinets, baths, toilets, air-conditioning units, fixed carpet, parquet flooring and other immovable improvements.It may extend to cover outbuildings such as garages and perimeter walls. However foundations and swimming pools are normally not covered under fire insurance for buildings.Most fire insurance provides cover against damage caused by fire, lightning, domestic explosion, bursting or overflowing of water tanks (excluding leakages), road vehicle impact, aircraft impact, malicious intent, riot and strike, earthquake, windstorm and flood, theft or attempted theft accompanied by forcible or violent entry. Depending on insurers, other perils such as landslides due to windstorm and flood may also be included.Valuing your propertyThe rule of thumb is that the sum insured be the replacement cost of your property, should it be completely destroyed.To help homeowners estimate the sum insured, GIA’s website www.gia.org.sg provides a guide in the form of a replacement cost table. The latter is based on the gross floor area and the type of development for private residential homes. Property owners should also remember to insure for the professional fees and removal of debris/temporary works. A point to be highlighted is that the bills of these 2 items can be VERY substantial and are normally not covered unless specified in the home insurance policy as most policies only cover the cost of rebuilding the property.Average ClauseThe principle behind the average clause is that the insurers can reduce payment on a claim by the percentage you are under insured.So assuming John has a total of $20000 worth of items in his house but he insured the contents for only $10000. His house was burgled one evening and he lost $5000, of which he submitted his claim for the same amount. However the insurer refused to pay the full claim of $5000.By insuring his contents for only half the correct value, the insurers would award John only half of the claim amount, in this case reducing it from $5000 to $2500.Protecting your valuablesIf you have expensive jewellery, watches or art pieces, you are advised to declare them to your insurance firm and provide documentary proof like receipts or valuation report, as insurers will insure your valuables either as a specific item or as a blanket under a worldwide cover. The latter ensures that even if you were to lose the insured item overseas, you will still be covered.Common ExclusionsCommon exclusions include war and terrorism risks, nuclear risks, subsidence or landslip. Also excluded are contents such as deeds, bonds, stamps, bank notes, manuscripts, medals, coins, documents of any kind and deliberate damage or loss.If you are living in a flood prone area, some insurers may decline cover or increase the premium. If your property is going to be vacant for long periods of time, expect insurers to ask how long.Now that you are equipped with the appropriate knowledge, happy home insurance hunting in Singapore!