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Tips to Find the Best Home Loan in Singapore
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Posted On :
Sep-15-2011
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Article Word Count :
504
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Finding the right home loan depends on your performance; if you do a lot of research you can grab the best home loan that might have several beneficial features.
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Finding the right home loan depends on your performance; if you do a lot of research you can grab the best home loan that might have several beneficial features. One of the key factors that must be considered during your search process would be the home loan interest rate, because this factor determines your repayment capabilities. Therefore, it’s important to know more about the home loan interest rate before starting your search process.
There are two types of home loan interest rate in Singapore namely fixed interest rate and floating interest rate. These interest rates have their unique features and understanding the basic difference between these two interest rates can assist you in determining the best home loan.
Fixed interest rate:
The term fixed clearly portrays that the interest rate doesn't fluctuate during the fixed rate period of the loan. However, in Singapore housing loan the fixed interest rate remains for the initial few years, and then the interest rate will float and would be calculated according to the reference rate. This will be specified in the bank offer. The reference rate varies between different banks depending up on the mortgage lender, who calculates it according to the SIBOR and SWAP. In Singapore, even the fixed interest rate may vary depending up on the market forces. As banks incur cost on hedging, fixed rate tends to be more expensive on average.
Floating interest rate:
In this case, there is no fixed rate interest. The interest rate will vary from the start of the loan. Therefore, it is also known as adjustable rate or variable rate. In floating interest rate, the interest rate is calculated according to a reference rate. Most of the bank charges a low floating interest rate during the initial period of the loan, and then it may increase depending up on the banks reference rate. In Singapore, the reference rate is usually estimated using the SIBOR and SWAP.
After understanding the basic types of interest rate, you should also learn about few options that might help you to grab the best home loan in Singapore. Here are few tips that might assist you during your search process:
- First make an initial planning based on your monthly payments, home expenses and budget. This might help you to determine the type home loan you need.
- Check out the basic criteria’s such as property types, loan tenures, repayment options, penalty option and tax benefits while searching for the home loan. All these criteria’s might help you in finding out a most beneficial loan.
- Now, you can calculate the interest rate using the calculators that are available in most of the banking sites. This initial calculation might help you to determine your repayment options.
All these tips might help you to grab the best home loan in Singapore. However, always focus your search based on the home loan interest rate which plays a crucial part in making your search a success.
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Article Source :
http://www.articleseen.com/Article_Tips to Find the Best Home Loan in Singapore_82078.aspx
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Author Resource :
Focus your search based on the home loan interest rate which plays a crucial role in determining the best home loan for you. The author has immense knowledge about Singapore’s home loan interest rate and has also written numerous articles based on home loan interest rate in the past.
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Keywords :
home loan interest rate, sibor rate, sor rate, Compare Singapore home loans, housing loans,
Category :
Finance
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Finance
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