Are you buying or investing in commercial property? Which bank offer the best package?
There are lesser banks active in the commercial property mortgage business. Which means that, you have lesser choice.
In reality, you may have lesser choice than you think.
It is depending on the commercial property type and location.
Office unit and retail shop, freehold, are always welcomed by banks. Especially those projects located within CBD area.
In these two years, Industrial property, B1 and B2 type, 30 or 60 years property tenure, lesser banks keen to offer mortgage to the borrower.
Banks also want to choose better quality asset and dilute their concentration risk on less quality asset in offering loan.
Well, how to define quality here? The quality of property is always the location, property tenure & usage of the property.
You may receive some bank advertisement before, promotion on commercial property. Don't be get excited too early. Some of the promotion is not applicable for industrial B1 and B2.
Furthermore, the way you held the property also a key factor to bank. Normally, there are major three type of commercial property owners, individual, operating company and investment holding.
Some banks only accept operating company, and some banks only offer to individual; some banks charge higher "facility fee" toward investment holding company.
In conclusion, the comparison of commercial property mortgage is not straightforward. I always have more factfind about your need in commercial property mortgage matter before I provide you the right recommendation.
Any enquiry about commercial property mortgage? Please feel free to reach me at my website: www.mx-rich.com. All your info and documents will be handled with absolute P&C.
Wednesday 29 July 2015
FAQ: Which bank is the BEST? (Residential property mortgage) -- Episode 1
There are approximately 10~11 financial institutions active in the mortgage business. Major players are the three local banks and 7 ~ 8 foreign bank with retail business, eg., ANZ, Citibank, RHB, CIMB, Maybank, SCB, HSBC, BOC, SBI, Hong Leong Finance, Singapura Finance, etc.
According to my years of observation and experience, there is no bank always offers the best or most competitive package. It will change from time to time. It is all depending on the bank appetite, market situation or business portfolio.
Especially at the beginning of this year, SIBOR and SOR spiked to higher level, those "unpopular" fixed rate package suddenly sold like hot cakes.
Refinancing applicants rushed to grab the fixed rate package. DBS, Maybank, RHB, CIMB and BOC, were offering good fixed rate package. However, due to the overwhelming application, a lot of applicants were rejected by banks or being offered with less attractive package.
This is not difficult to understand. Mortgage package also like any consumer products we buy in daily life. There is always a limited volume available for the applicants, eg. $50mil, and it is always on first come first serve basis. Once bank receives enough business, means the package is "FULLY SOLD OUT".
"Sold-out" means sold out - NO more for you. The bank won't accept application for the package, even you carry a priority banking or premier banking account status or 20 years saving account holder. Most of the time, you don't have a room to negotiate for a better deal after the promotion.
Well, if you are wealthy private banking client, with AUM (asset-under-management) multiple millions dollars in your account, you always have the chance to get better deal than the consumer banking. It is another segment of banking. I will share more on future blog.
In a nutshell, we should not underestimate the speed of banks sell their mortgage, especially on promotional items. A few days of consideration or delay in consolidating documents, potentially for you to miss a good opportunity in cost saving. The cost saving can be 5 figure per year, depending on your mortgage size.
As mortgage broker, MxRICH always aware of good deal in the market. Please visit my website www.mx-rich.com for your mortgage needs. All your info & documents will be handled with absolute P&C.
According to my years of observation and experience, there is no bank always offers the best or most competitive package. It will change from time to time. It is all depending on the bank appetite, market situation or business portfolio.
Especially at the beginning of this year, SIBOR and SOR spiked to higher level, those "unpopular" fixed rate package suddenly sold like hot cakes.
Refinancing applicants rushed to grab the fixed rate package. DBS, Maybank, RHB, CIMB and BOC, were offering good fixed rate package. However, due to the overwhelming application, a lot of applicants were rejected by banks or being offered with less attractive package.
This is not difficult to understand. Mortgage package also like any consumer products we buy in daily life. There is always a limited volume available for the applicants, eg. $50mil, and it is always on first come first serve basis. Once bank receives enough business, means the package is "FULLY SOLD OUT".
"Sold-out" means sold out - NO more for you. The bank won't accept application for the package, even you carry a priority banking or premier banking account status or 20 years saving account holder. Most of the time, you don't have a room to negotiate for a better deal after the promotion.
Well, if you are wealthy private banking client, with AUM (asset-under-management) multiple millions dollars in your account, you always have the chance to get better deal than the consumer banking. It is another segment of banking. I will share more on future blog.
In a nutshell, we should not underestimate the speed of banks sell their mortgage, especially on promotional items. A few days of consideration or delay in consolidating documents, potentially for you to miss a good opportunity in cost saving. The cost saving can be 5 figure per year, depending on your mortgage size.
As mortgage broker, MxRICH always aware of good deal in the market. Please visit my website www.mx-rich.com for your mortgage needs. All your info & documents will be handled with absolute P&C.
Tuesday 30 June 2015
Singapore Mortgage - Chapter 1: To understand what the bank want
My clients and prospects always say, "my property worth $Xmil, and the loan is so small, why the bank doesn't want to approve my mortgage? there is no risk at bank!"
Well, we always have to remember, all banks follow MAS mortgage regulation. Banks don't approve your mortgage base on your property value alone. Property quality and value is only part of the approval criteria.
Another part of the approval criteria is depending on the borrower credit stand, income, age etc.
Assuming you stay in a property worth $5mil. The outstanding loan is only $500k. You intend to apply a equity cash out of $200k only for some other investment or working capital.
In this case, the Loan-to-valuation (LTV) , it is way below 50% valuation. This looks ok for bank.
With this low LTV, the bank will still want to look into your monthly income. This is called "income based" approval.
If you doesn't show a good income to pass TDSR (Total-debt-servicing-ratio), your case will definitely rejected by bank.
If you really unable to show good income, the next method is to show the bank your liquidity asset. We called "asset-based" approval route. Liquidity asset includes bank saving, share, bonds etc. These type of asset can convert to cash fast.
Another term we use is called AUM, asset under management. The asset must be hold under Singapore financial institution.
Without showing the source of servicing the monthly installment and the ability for the repayment, banks will just reject you.
You may ask, "why bank so KiaSu and Kia Si? the value to the property is so high!".
Yes, bank also in business, the bank need to monitor closely on the risk exposure.
Property is not a liquid asset. Banks take time, effort and legal cost to get back their money. These are risk for banks. Put yourself in the shoe of bank credit approval department, and you will understand this.
We all like quality business, banks also like quality business. To bank, quality of both borrower and property is equally important.
Well, we always have to remember, all banks follow MAS mortgage regulation. Banks don't approve your mortgage base on your property value alone. Property quality and value is only part of the approval criteria.
Another part of the approval criteria is depending on the borrower credit stand, income, age etc.
Assuming you stay in a property worth $5mil. The outstanding loan is only $500k. You intend to apply a equity cash out of $200k only for some other investment or working capital.
In this case, the Loan-to-valuation (LTV) , it is way below 50% valuation. This looks ok for bank.
With this low LTV, the bank will still want to look into your monthly income. This is called "income based" approval.
If you doesn't show a good income to pass TDSR (Total-debt-servicing-ratio), your case will definitely rejected by bank.
If you really unable to show good income, the next method is to show the bank your liquidity asset. We called "asset-based" approval route. Liquidity asset includes bank saving, share, bonds etc. These type of asset can convert to cash fast.
Another term we use is called AUM, asset under management. The asset must be hold under Singapore financial institution.
Without showing the source of servicing the monthly installment and the ability for the repayment, banks will just reject you.
You may ask, "why bank so KiaSu and Kia Si? the value to the property is so high!".
Yes, bank also in business, the bank need to monitor closely on the risk exposure.
Property is not a liquid asset. Banks take time, effort and legal cost to get back their money. These are risk for banks. Put yourself in the shoe of bank credit approval department, and you will understand this.
We all like quality business, banks also like quality business. To bank, quality of both borrower and property is equally important.
Feel free to reach MxRICH Pte Ltd at www.mx-rich.com or call 94526048.
There is no additional fee payable to MxRICH for mortgage application. We assure you that, all your info and documents will be handled with absolute P&C.
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