MoneyDigest - Personal Finance, Lifestyle, Money Saving Tips

Bank Loan and HDB Loan: Which Has More Advantage?

For any potential home buyer, home loans should be a serious business. Pick the wrong kind and it can cause a cascade of unfortunate events, including being trapped in a huge debt and even losing your home.

But between a bank and an HDB loan, which one is better? Let’s compare them:

How much can you borrow?

Under the HDB loan, you can borrow up to 90% of the purchase price or the market value, whichever is lower.

Banks, on the other hand, can provide you with up to 80% Loan to Value (LTV) of the property. This the ratio of the loan quantum to the property’s appraised value.

Take note, though, that both HDB loans and bank loans cannot guarantee the full LTV. Simply stated, it can be lower than 80% or 90%. This means that you have to use your own money to pay off the rest of the mortgage or consider other bank loans.

Taking out a personal loan to cover the rest is an option, but this might affect your debt servicing ratio. Always compare to find the best personal loans.

How much is the down payment?

HDB loans would require 10% down payment, which may be fully covered by your CPF savings. Banks would need 20%, 5% of which should be in cash as only 15% can be absorbed by the CPF. Regardless of which loan you choose, though, repayments may be made through the CPF.

How do they calculate the interest rate?

One of the biggest differences between HDB loan and bank loans is in the way they determine the interest rate. For a home buyer, you need to learn this as it’s the basis for the amount you pay on top of your principal loan.

The HDB loan is pegged at 0.1% above the CPF Ordinary Account (OA) rate. Do note that the CPF rate is reviewed quarterly, so the rate may still change, although it is quite consistent.

Banks can offer either a fixed or a variable rate, although the fixed rate is not perpetual: it’s fixed for only a few years, say, three to five years. Then the rate becomes variable.

Either way, banks have three possible bases for computing their interest rates: SIBOR Singapore Interbank Offered Rate (SIBOR), Swap-off Rate (SOR), and Internal Bank Rate (IBR). On top of that, the bank adds a spread, which is the bank’s charges. As an example, the SIBOR rate (we’ll use this since it’s the most preferred bank rate) may be 1.1% and the spread is 0.9%, which means the overall interest rate is 2%.

Banks express the interest as 0.5% + 3-month SIBOR, which means the rate is revised every three months.

Although banks can offer similar home loan packages, they can still differ on the interest rate alone. Thus, to make sure that you can make the right decision about that, speak to a mortgage broker.

Over the last few years, homeowners with bank loans have been enjoying lower interest rates, but that’s due to quantitative easing (QE), which somehow repressed the bank’s interest rates. But now that it’s over, the rates may significantly change.

Hopefully, with this article, you can make a much better choice whether to get an HDB loan or a bank loan.

(This article is brought to you by SingSaver.com.sg)

Making Your Will In Singapore: Are Lawyers Non-Compulsory?

Whether we like it or not, death is inescapable. This is why it is important to prepare a “Will”, especially if you are retiring soon. The essence of making a Will is not only to prepare for the event of death but also to make sure that others understand your parting wishes.

In Singapore, the surviving spouse is usually entitled to one half while the other half is divided among the children. But if there is no Will, there are higher chances that no one would be held responsible to sort out the estates or to take care of the orphaned children. Without a Will, your assets may be distributed to people whom you do not intend to give anything to. Certainly, it is simpler, more responsible, and more convenient to consider making your own Will.

Clueless about the entire process? Start here:

DEFINITION

An individual makes a legal declaration or a Will to provide the administration and distribution of what he or she owns among his or her beneficiaries at death. The person who made the will is called the “testator” while the people who will inherit the assets are called “beneficiaries”. The Wills Act governs all the Wills in Singapore.

A WILL’S FORMALITIES

1. The testator must be at least 21 years old.

2. The testator must sign the Will accordingly. If he or she is unable to do so, a trusted person may sign in his or her presence.

3. Two or more witnesses are required and they must sign the will too, in the presence of the testator.

4. The two witnesses cannot be beneficiaries of the will (e.g., spouse of the testator) but the third witness can be a beneficiary.

MAKING A WILL IN SINGAPORE

Interestingly, you do not need a lawyer to make a Will!

A 21-year-old individual of sound mind can make his or her own Will and change it any time in the course of one’s life. But if you have insufficient legal knowledge on the subject, your “homemade Will” may be at risk of being ineffective or invalid. So, it is still best to seek legal advice. After writing one, you must keep a copy in a secured place and let your family members know of its existence.

Image Credits: pixabay.com (License: CC0 Public Domain)

To ease the process, you must approach the Wills Registry to deposit the document’s information. Expect a fee for it.

Sources: 1, 2,& 3

Ways You Are Flushing Money Away Without Noticing It

1. BY NOT CLAIMING YOUR REWARDS

A credit card is utilized at the point of sale as means of paying for services or goods. Credit cards come in different looks and sizes, much like assorted chocolates. What’s more? They vary in the rewards they entail. Some give discounts whenever you shop while others give you travel miles. If you are confused with how the rewards scheme of your credit cards works, it is best to ask your issuer openly on how you can maximize its use.

Take a cash-back rewards card to your advantage by putting the sum to your emergency fund. Or, gather up all the miles you can get (e.g., by offering to pay for your friends and later reimbursing it with cash) to enjoy a free trip in your dream destination. To put your “power” into good use, utilize your rewards wisely.

Image Credits: pixabay.com (License: CC0 Public Domain)

2. BY NOT CONTROLLING YOUR MOBILE PHONE USAGE

Millions of people around the world overpay for their postpaid plans because they underestimate their usage in minutes, in messages, and in bytes of data. When you are paying for minutes, messages, and gigabytes that you do not use then, you are flushing away money every single month.

For your convenience, I shall impart how much you will pay for excess usage in SingTel and StarHub plans. For Singtel users, excess local 3G data is charged up to S$10.70/1 GB and excess data beyond the bundled plan is charged at S$0.50/100 KB. While StarHub 4G users get to pay S$10.70/1 GB in excess. Considering that almost every place in Singapore have free WiFi, paying this much is really costly!

To intelligently estimate your total usage, analyze your mobile phone billing statements for the past few months and average each factor. Then, you can select a postpaid plan best suited for your needs. Keep track of your data usage better by installing an App like My Data Manager (free to download on iOS and Android). My Data Manager App enables you to know how much each App consumes and alerts you whenever you are close to hitting the limit.

3. BY NOT CHOOSING BUNDLED SERVICES OR POLICIES

If you are getting a TV, landline (home digital line), mobile phone, and a wireless broadband plan, it is best if you consider getting all of these services under the same provider. This process is called bundling.

By bundling the services or policies, the telecom companies are able to offer you discounts and promotional packages to help you save more. For example, SingTel’s Fiber Home Bundle will cost you as low as S$49.90 a month (Terms & Conditions apply)!

Image Credits: facebook.com/SingTel?fref=photo

With the help of this list, may you stop “flushing your money down the drain” by increasing buyer’s awareness. 🙂

Sources: 1, 2, 3, & 4

3 Affordable Online Pet Stores Offering The Best Services In Singapore

George Eliot once said: “Animals are such agreeable friends – they ask no questions; they pass no criticisms.”

Animals are creatures that love us genuinely without judgment that even words cannot describe the bond we form with our pets. Most of the times, the loyal and affectionate bond formed goes way beyond the “master and pet” relationship that people treat them as members of the family.

With that special bond, you only want what is best for your pet. This is why it is extremely important for you to find a store that sells the right food, accessories, and pet care products. Look no further, as this list will give you four of the best online pet stores in the country. Furthermore, these prices are inclusive of GST already (no hidden costs yay!).

1. DOGGY FRIEND

Doggy Friend maybe one of the cheapest online pet stores out there but their services are optimum. Looking at their user-friendly website that is easy to navigate, I saw a wide range of dog and cat food brands. You will definitely find a product and price that suits you best.

Doggy Friend, as a company, focuses on pet supplies such as clothing pieces, toys, dental accessories, and food supplements. Currently, they are having promotions on food including: Bow Wow Treats Mix N Match: 3 for $10 and Special Dog Wet Food (400g) for S$2.55. While their ongoing online sale is mainly on toys including: Qoo Santa Pet Toys for S$2.50 and JU-BE Bowling Pin for S$6.

Image Credits: facebook.com/Doggyfriend-1460708560842852/timeline/?ref=page_internal

And if you want to give a present for your pet loving friend but you do not know what to get him or her, you may buy a Doggy Friend gift certificate instead. Their gift certificates range from S$10-S$50.

Website: doggyfriend.com.sg

2. PETS’ STATION

One of the pet stores that date way back is Pets’ Station. From a family business that emerged in 1969, Pets’ Station had rapidly expanded over the years. With over thousands of products available at competitive prices, you can expect a variety of premium pet supplies that are exclusive to their shop alone. What is special about Pets’ Station is that they offer grooming services (for as low as S$45) and sell cute pets too at their 7 physical stores islandwide.

Are you eager to browse through their products? Then, grab the chance to participate in their warehouse sale this coming Saturday and Sunday!

Image Credits: petsstation.com.sg

Website: petsstation.com.sg

Outlets: 7 store locations

3. KOHE PETS

Where else can you find an online shop that is convenient, easy to navigate, accessible, and offers free samples?

Yes your read that right! Kohe Pets online shop regularly offers free samples for their products so you will find it easier to decide the perfect treat that your pet will truly like.

Furthermore, Kohe Pets has a huge selection of more than 2,500 reasonably priced products ranging from the popular brands to the unique brands that are hard to find in Singapore. Their focus leans more on healthy and whole pet foods. According to testimonials, their deliver is swift as customers receive their orders usually on the next day.

Image Credits: facebook.com/kohepets

Lastly, Kohe Pets are always generous with their promotions that some items are set to 20% off or Buy 1 Get 1 Free scheme!

Website: kohepets.com.sg

Sources:1 & 2

3 Times Color Significantly Affected Your Spending

Whenever you are out to shop, you see wonderful colors from the lightest to the darkest shades. The sale signs are bright red, the shopping bags are shocking yellow, and the labels are resonating the rainbow. Did you know that these colors are strategically placed to influence the way you spend?

Colors can impact one’s spending because the sight of it automatically stimulates you and increases your memories, color-motivated behaviors, and social influences. Here are three situations when color significantly affects your finances:

1. RIGHT SHADE FOR YOUR CAR

Burgundy is a shade of red that is often associated with wine. Cars with this color are usually more expensive that their white counterparts as burgundy exude luxury and refinement. Furthermore, red is a difficult color to see at night when people’s visions are somewhat distorted. Be careful as this may lead to involvements in accidents.

On the other hand, a white colored car has numerous benefits.

But before discussing this, I must acknowledge the existence of the age-old debate of whether white and black are colors. According to the available online resources, white is an achromatic color composed of all the frequencies of the light of the visible spectrum. While black is a color when you are referring to the coloring agents of tangible objects. For example, if you combine the primary colors using paint, you would get a shade of black.

Going back to white as a color for your car…light colored cars have better petroleum mileage because you can stay cooler without the use of air conditioning. Painting your car white can instantly lower the interior heat. Also, it is easier to see by other drivers at night.

2. ATTRACTIVE PACKAGING OF BEAUTY PRODUCTS

You enter Sephora and you see their in-house brand of lipsticks in sleek black tubes. Don’t they look expensive? Even if these lipsticks cost less than other brands they seem more upscale because of the color they come in. In packaging, black signifies sophistication.

Image Credits: pixabay.com (License: CC0 Public Domain)

Another color that can push people to spend more on beauty products especially the anti-aging ones is purple. Purple signifies royalty. This is why people are often convinced that there really are special properties inside the “purple box” and they are willing to pay more for it.

3. APPETITE-ENHANCING COLORS

From the logos to the interior, two colors seem to stay at almost every fast food chains. These two colors are red and yellow. Red and yellow stimulate appetite, which probably explains why your stomach starts to make noises as soon as you see the yellow arches or the red logo. And, you cannot resist spending more inside.

Image Credits: Mike Mozart via Flickr (CC License)

Interestingly, you can combat how colors affect the way you eat by controlling your own plate. Researchers at Cornell University found that when they reduced the contrast in their plates and tables or in their plates and the food itself, people tend to serve themselves less food. For example, to eat less, pair your white plate with your white table-cloth or a blue plate with a blue table-cloth.

Sources: 1,2, 3, & 4

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