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Almost everyone in Singapore will need a mortgage loan to purchase a house. If you choose to buy a private property, you can only get a bank loan but if you buy a Housing and Development Board (HDB) property, you can choose between a HDB loan and bank loan.

Bank loans are structured in such a way that if you fail to refinance regularly, you will miss lots of cost savings and end up spending much more on your housing loan installment but most banks will not reveal this to you. Refinancing your home loan is a great way to refresh your finances to better suit your current lifestyle.

How bank loans work

 Each bank loan package has a spread applied to the interest rate. For example, if it is a SIBOR package, it will have something like sibor+0.8%. After several years, often 2-3 years, the spread increases to even 1.2 percent which is a significant amount on your regular loan installment. Unfortunately, most people do not realize that the rate they are paying currently is just temporary and any increase will make them pay additional hundreds or even thousands more dollars per month.

Advantages of refinancing

The major advantage of refinancing regardless of home equity is lowering the interest rate. Often, as people make advancement in their careers and continues to earn more money, they are able to pay their bills on time which in turn increases their credit score. The increased credit score comes with the ability to obtain loans at relatively low interest rates. A lower interest rate on home loan can have a significant effect on your monthly payments potentially helping you save hundreds of dollars every year.

Ignorance is the major risk of refinancing. Though refinancing can help you to make massive savings, without the basic knowledge, it can actually hurt you by increasing your interest rates instead of lowering them. Below are some tips on refinancing home loans in Singapore that will help you get the best deal at the most affordable price.

The best time to refinance

You should not wait until you notice an increase in your loan installment which happens after an increase in net interest rate spread to refinance. You can refinance even six months before the expiry of your lock in. This is because the minimum notice period for refinancing is three months which means if you wait until the lock in expires, you will be stuck with a high interest rate and increased monthly instalments for at least three months which will cost you thousands of dollars.

In most cases, it is best to refinance with the original lender though it is not a requirement. But for a bank, it is easier to keep a customer than acquire a new want, therefore, they will be willing to offer a better price for borrowers looking to refinance. So, you have a better chance of obtaining a better rate with your original lender.

The different variable rates to choose from

Home loan packages have both variable and fixed rates. The variable rates have different options to choose from which can be quite confusing. The three main types of variable rates include:
· Sibor/ SOR rate
· Bank’s board rate
· Fixed deposit mortgage rate

As mentioned above, home loans have a net interest rate spread. For the variable rates, it is attached to each of the above types. Therefore, it can either be sibor +0.8%, board rate+0.8% or fixed deposit mortgage rate+o.8%.

SIBOR and SOR rates are determined by the Association of Banks in Singapore and are published on financial mediums such as Bloomberg, Reuters and The Business Times. All banks follow the same sibor/sor rate but every financial crisis causes the rate to fluctuate quite badly. For example in 1987, sibor/sor rate was at 8 per cent, in 1998, it reduced to 7 per cent and further reduced to 4 per cent in 2007.

Of all the three types of variable rates, the Bank board is the most not transparent. The bank can change it anytime it pleases then inform you abruptly on the increase in the monthly instalments. There is no way to confirm this rate.

The fixed deposit mortgage rate is relatively new compared to sibor/sor rate or the bank board rate. Most people maybe led to think that this is fixed rate but it not. However, it is less volatile compared to sibor and bank board rate.

Fixed deposit mortgage rate is attached to the fixed deposit rate and is quite transparent as it is published on the website of the particular bank.

Fixed interest rates on home loans only last for a short period

If you choose a home loan with a fixed interest rate, you should know that the rate is not fixed forever. Refinancing regularly is the only way you are going to get a fixed interest rate for a longer term. Most fixed rates will only last for the first 3 years with a few extending to five years. After that, they are automatically converted to variable rates. Therefore, it is better to refinance regularly in order to get a fixed interest rate again.

HDB loan vs. Bank loan

The main reason why most people prefer HDB loans first is the down payment. Banks have an LTV (Loan to Value) ratio of 80% while HDB has a LTV of 90%. This means that if you are looking to buy a flat valued at $600,000, HDB will lend you up to 540,000 while the bank can only lend you $480,000.

However, HDB loan have a higher interest rate of 2.6 per cent which has not changed for a long time hence convenience if you are looking for more stability. The interest rate of bank loans on the other hand is determined by the bank spread as well as the index.

In most cases, the index used is SIBOR (Singapore Interbank Offered Rate). In rare cases, the bank can use SOR (Swap Offer Rate) which fluctuates depending on the strength of the dollar. You can also get an offer to use bank board rate in which the bank the decided what the rate will be.

Typically, the interest rate on bank’s home loan has been about 1.7-1.9% since 2008 meaning that people with private properties have paid lower rates than HDB borrowers for close to nine years. A lower interest rate translates to lower monthly instalments.

For this reason, you may want to switch from HDB loan to bank loan which is possible but you cannot switch back from a bank loan to a HDB loan.

Switching from HD loan to Bank loan is especially advisable if you are left with about 5-10 years to clear your loan as you do not have to worry much about the fluctuating interest rate since the loan will end soon.

The cost of refinancing your home loan

Refinancing is not free but the cost varies depending on individual circumstances. For example, if your loan amount if high, the bank can give cash subsidies or rebates to cover part of the fee. Some of the common refinance cost include:
· Application fees
This is the fee you are charged to when applying for the new home loan.

· Valuation fees
A valuation fee is charged by the new lender to cover the cost of valuing the property that you offering as security.

· Legal fees
You can also get charged an attorney fee for conducting the closing for lender.

· Land registration fees
These fee is charged to remove the existing mortgage from the previous lender and register the new mortgage to the new lender.

· Discharge fees
This is an administration fee paid to the current lender to clear the existing loan as well as prepare the existing documents.

· Ongoing fees
Some lenders may charge an ongoing fee which ranges from $0 -$750 per annum.

· Title insurance fee
Title insurance is intended to guard against any errors or problems with the transfer with title.

· Break fees
If you refinance your home loan during a fixed rate period, you will be hit with a contract break fee which compensates the current lender for any loss of profits due to your decision to break the contract. Break fee may or may not be charged depending on the existing interest rate movements.

In most cases subsidies and cash rebates can cover the refinancing cost leaving you to pay only a few hundred dollars. All the fee can also be paid by CPF if you have enough money in your ordinary account.

I have been cutting down on doing product reviews towards the last quarter of year 2016 to prepare for our coming 4th kiddo who was born in early November 2016 and I am now slowly resuming doing product reviews but prioritizing those that can fit into our family dynamics (especially books on parenting or homeschooling stuff, family products, something along those genre)

However, as busy as I am with 4 kiddos, home cooking, taking care of hubby's administration site of the business and swamped up with managing my FB page and blog, I just can't say no to reviewing good books, what more one as unique as this! Reading is my passion and coupled with books that are of parenting, children, family or religion or educational genre, all the more I gotta say yes! 

I think the concept of monthly subscription boxes is picking up in Malaysia though it is quite a norm in overseas with all sorts of things that you can subscribe to monthly - books, arts and crafts stuff, cosmetic products, snacks and so on!

Description from the company:

"Josh & Cherie Books is a Singapore-based premium children book subscription for ages 0-7. Every month, we handpick 2-3 books (depending on your child's age group), gift-wrap it, and deliver it to your doorstep. We make reading exciting for children, convenient for parents, and affordable for everyone. "

Soon after letting Cheryl (one of the founders) know about our kiddos age range, we received this gorgeous box, nicely packed, so exciting!!! It's like Christmas all over again! Love the cute note written inside the box! Special touch!

We opened the box and found 3 books along with a cute little LED torch light to be used together with one of the books.

Let's have a look at the books we received, shall we? We started off with the "On the Construction Site (Shine-A Light Books)" armed with the cute little LED torch light. Kiddos were all excited with this new concept of reading book hahahah!

Now to be honest, I wouldn't have known such book exist had we not have the opportunity to try out this book subscription. What a cool and fun way to get the kiddos interested! They each get a chance to hold the torchlight and shine it from the back of the pages and see what the shadow reveals. Very cool indeed!

Even our almost 8-year-old boy got excited as well as he quickly answers my questions on what could be behind some pages. Rocks and stones underneath the ground, cabling behind the walls and more! Our girls (age 3 and 5) also look in awe as they admire the cablings behind the walls.

I like that there are some pages explaining the different types of machinery shown in the book and our kiddos get to learn about them as well!

The next book we reviewed is 'Pandora' by the Victoria Turnbull. I personally love the cover of the book. Soft satin material and the illustrations is captivating as well as the beautiful storyline. The book is meant for children from age 4 to 7 but our 3 kiddos seem to enjoy the book and feeling sad and happy as we flipped through the book from beginning to end.

The final book is meant for our littlest kiddo but he is a bit too young to fully appreciate this book yet, hence I will keep it until he is ready for it in a few months' time. The "Red Truck" board book by Kersten Hamilton is about the story of Red Truck saving a school bus from a mud puddle.

But seriously, I did try to let our almost 3 months old boy have a look. He was indeed captivated with the book, most probably because of the bright interesting colors hahaha...

Overall, I think the idea of monthly book subscription is really nice.

Imagine feeling Christmas-sy every month, getting new books (without the headaches of picking and choosing suitable ones) and feeling the excitement and surprises as you opened your monthly box!

I am also impressed on the way the books are selected. Picture below is taken from Josh & Cherie Books website. You can clearly feel that they understand the type of books that suit children, right?

I also think this would also make a wonderful present to gift to your loved ones, imagine every month your loved ones are reminded of your blessings as they received their subscription box. Isn't it wonderful? A gift that keeps on giving :)

You can find out more from https://www.joshandcheriebooks.com/shop

I received no monetary compensation for this review, I was provided with a subscription box in order to facilitate my review. All opinions expressed in this post are my own. Please do your own research when purchasing products, as your opinions may differ from mine. And if you'd like to read my previous book reviews, you can do so by reading this post of mine called "My Book Reviews"

** Note: I have disabled the commenting feature on my blog engine thanks to all the spammers who happily spam my blog every day. If you wish to ask me any questions, you can find me at my Facebook page (I'm there almost every day) or just drop me an email if you wish to maintain some anonymity.

I have been cutting down on doing product reviews towards the last quarter of year 2016 to prepare for our coming 4th kiddo who was born in early November 2016 and I am now slowly resuming doing product reviews but prioritizing those that can fit into our family dynamics (especially books on parenting or homeschooling stuff, family products, something along those genre)

However, as busy as I am with 4 kiddos, home cooking, taking care of hubby's administration site of the business and swamped up with managing my FB page and blog, I just can't say no to reviewing good books, what more one as unique as this! Reading is my passion and coupled with books that are of parenting, children, family or religion or educational genre, all the more I gotta say yes! 

Title: Rasa Sayang Sing-and-Record Fun Book
Publisher: Peyron Singapore Pte Ltd
ISBN: 978-981-09-8706-0
Paperback: 16 pages (hardboard)

Description from the product page:

"Rasa Sayang Sing-and-Record Fun Book is the first-ever push-button Malay folksong book. Realising the importance of preserving and protecting the local cultural heritage, Lok Leejiun curated the book to reconnect the younger generation to their roots. The book introduces an ensemble of traditional Malay folksongs, featuring seven (7) Nusantara folksongs namely Rasa Sayang, Chan Mali Chan, Burung Kakak Tua, Anak Itik Tok Wi, Lenggang Kangkung, Bengawan Solo, and Gelang Sipaku Gelang for the kids.

The book incorporates interactive elements to enhance and create a more memorable learning experience for children. Besides the conventional push-and-play button for pre-recorded songs, the book also features a ‘record’ button to record parents’ singing, and a ‘playback’ button to listen to the recording – allowing for parent-child interaction even when parents are occupied. English translations of the Malay lyrics are also available to benefit children’s learning process further."

We received the Rasa Sayang: Song Book + Plush Toy Gift Set for our review. My first thought was "What a lovely gift box set!" Perfect to give on any occasion! And look at that cute plushie! When you press the toy, you can hear the 'Rasa Sayang' tune! Lovely! Sometimes either myself or our kiddos will press the plushie and let our almost 3 months old boy hear it, sort of like a lullaby song hahaha...

We immediately open up the box and flip through the book as well as check out the push-buttons ahahah... The book includes a ‘play’ button for pre-recorded songs, a ‘record’ button for interactive play and a ‘playback’ button to playback our singing.

I want to confess that I really did not read any instructions on how to record our singing and how to playback etc. Well, we were over excited with the new book and the push-button gadget hahah... but fret not, it is very easy to understand and operate the push-buttons, really, even for me who skipped following the tutorial (located on the 1st page of the book)

I got our girls to press the corresponding button pictures to the songs in the book and let them hear the songs over and over again. For ehem ehem, mature people like me, these songs really do bring back memories! I remember learning to sing them during my primary school time. Oh, how fun! I guess children these days will miss out on these lovely songs if they are not exposed to it anymore.

What I like about this book is it comes with the English translated lyrics as well (in case you can't sing in Bahasa, you can sing in English). The illustrations are cute and the fonts used in the book are easy on the eye, easy and big enough to read.

There is also a mini game you can play as you go through this book with your child(ren). You can try to find the mischievous baba (the company mascot) that is hiding in the pages of the book. Enjoying music as well as playing hide and seek at the same time, hahaha, nice nice!

At one point, our girls even danced along to the songs. Our almost 8-year-old boy told me he remembered learning some of the songs during his kindy time.

Our 3-year-old girl also quietly browsed through and repeatedly play some songs - I guessed she found some favorite new tunes. Days after we first used the book, I can hear her humming along to a few words from some songs. Precious, precious memories to pass on to our younger generation.

Overall, this is a really nice book to own. What a nice way to preserve a cultural gem!

I totally recommend this book!

Giant thumbs up!

You can purchase the book or the gift set at http://www.bababaa.com/shop-baba-baa/

For more information on baba baa, please visit their website at www.bababaa.com and https://www.facebook.com/bababaafamily/

I received no monetary compensation for this review, I was provided with a copy of the book in order to facilitate my review. All opinions expressed in this post are my own. Please do your own research when purchasing products, as your opinions may differ from mine. And if you'd like to read my previous book reviews, you can do so by reading this post of mine called "My Book Reviews"

** Note: I have disabled the commenting feature on my blog engine thanks to all the spammers who happily spam my blog every day. If you wish to ask me any questions, you can find me at my Facebook page (I'm there almost every day) or just drop me an email if you wish to maintain some anonymity.