There are two reasons why borrowers in Singapore seek mortgages. One is for acquisition of a house that they will occupy and the other is to acquire a house for speculation purposes to be resold at a later time.
Sometimes, the reason is a combination of both especially for borrowers taking their first mortgage loan. When the mortgage is cleared, borrowers may start a new acquisition. Alternatively, they may sell their home and vacate to another identified mortgage property. Often, moneylenders are called upon to help complete the mortgage journey.
What is a Mortgage Loan?
The interest on a mortgage loan in Singapore is often a reflection of the US market situation. Fluctuations are experienced throughout the course of a mortgage repayment. During the tough times, a moneylender can bail you out of the mortgage crisis you may be facing. This will be balanced out by the good times when the interests are low. When the interest is really low, the buyer may use the opportunity to clear the mortgage with the help of a moneylender.
Some mortgages have fixed interest rates but can still be used for speculation because the property still appreciates in value. Paying the first deposit is made possible by the help of a moneylender and the borrower then qualifies for the mortgage loan. When all of the properties in the development have been taken, the time is right to sell. Speculators often start by selling to those who missed the bus and then immediately repay the moneylender.
If the Singapore mortgage loan is under a financier who actually developed the property, new property offers often come up. More often than not, the borrower is given lower rates and preference by the financier. However, he/she may not be prepared financially to take on the offer. This is where a money lender steps in and assists the payment of deposit for the new mortgage.
A mortgage loan for new property can be easily offset by a tenant’s deposit and rent. This is a good way to invest as it assures future dwelling space for relatives. The property may also serve as a second home or as a business premises. These ambitious achievements are made by the combination of your income, the mortgage firm and your moneylender.
Sometimes there is no offer and no rise in the marketplace but simply a case of the buyer not being able to meet his current premium. To prevent his credit history from sinking into the red, he borrows from a moneylender to save face. A good credit reputation is not something to take for granted as it may lock you out of future opportunities.