Home owners facing twin challenges of high housing prices and high interest rates
Deputy Prime Minister Heng Swee Keat said home owners facing a double whammy of higher home prices and rising mortgage rates need to pay attention to fundamentals.
DPM Heng emphasized that considering the uncertainties of the global economy and rising interest rates, the government will continue to pay close attention to the trend of real estate prices and mortgage interest rates to ensure that housing prices will not exceed the economic fundamentals, so that citizens can own their own in an affordable and sustainable way.
Government committed to help home owners facing dual challenges of high housing prices and high interest rates cope with the challenges
While Singapore is facing many global uncertainties and uncertainties in the economic outlook, the government promises to continue to provide affordable housing and is committed to helping home owners facing dual challenges of high housing prices and high interest rates cope with the challenges.
Deputy Prime Minister and Coordinating Minister for Economic Policy Heng Swee Keat said in his speech at the Chinese New Year gathering of the Singapore Property Developers Association (REDAS) on Friday (January 27) that in order to meet the housing needs of the people, the government launched more than 23,000 HDB flats last year 23,000 more units will be released this year; the government has also increased the supply of private housing through the land sales plan. Last year, 6,300 units were supplied, and another 4,100 units will be provided in the first half of this year.
Without compromising safety and quality, the HDB has worked hard to catch up with the progress of construction projects delayed by the COVID-19 pandemic. Some pre-purchased HDB projects have started construction ahead of schedule, shortening the waiting time to less than three years.
DPM Heng said that although the global outlook is uncertain and there is more private housing supply, housing prices are still rising, and the demand for private housing and resale HDB flats remains strong among Malaysians.
He reminded that if housing prices continue to rise, but income and other economic fundamentals fail to catch up, the affordability of Singaporeans will be weakened, which will eventually lead to a downward adjustment in the market and turmoil.
Home owners facing difficulties should also pay attention to the debt repayment pressure caused by the sharp rise in mortgage interest rates. Mr Heng pointed out that the three-month Singapore dollar overnight interest rate (SORA), the main reference rate for floating mortgage packages, has risen from 0.2% to 3% in the past year, and it may rise further in the next few months before stabilizing.
After the government introduced property cooling measures twice in December 2021 and September last year, residential price growth and transaction volumes have slowed down in the fourth quarter of last year.
He warned that even if measures are taken to stabilize the property market, the real estate market will still go through cycles. He said his government will help home owners facing the dual challenges of the real estate market, namely high housing prices and high interest rates.
DPM Heng emphasised that considering the uncertainties of the global economy and rising interest rates, the government will continue to pay close attention to the trend of real estate prices and mortgage interest rates to ensure that housing prices will not exceed the economic fundamentals, so that the people of Singapore can own their own in an affordable and sustainable way.
“The right home loan financing and the best refinancing are the most important factors for home owners facing the double whammy,” said Mr Paul Ho, chief officer at iCompareLoan.
There are various reasons for why people make refinancing decision. It is important to carefully research when refinancing and analyze the best option in each specific situation. While the idea of having an extra lump sum of money is appealing, it is important to consider the options, especially during these rough economic times, it is important to keep in mind Long-term goals and ramifications that would be affected by refinancing.
One report suggested that more than half of property owners are paying too much for their mortgages and many people are locked into mortgages not suitable for their financial situation, in these circumstances, it is easier to the homeowner to make refinancing decision.
It is common for homeowners who have to make refinancing decision to have questions and not understand resources that may be available to them. A person’s credit rating is always taken into consideration when applying for a new loan. If a person has a low credit score, the chance of getting a low interest rate is slim. Other factors that are taken into consideration include the duration of a loan and how long the person is planning to stay in their current location, as well as if a person is close to paying off a mortgage, it may not benefit to start over.
There are typically fees associated with refinancing that need to be paid upfront in order to take advantage of the associated offer. If the price of the fees is not covered, it may end up costing a person more in the long run.
Home owners facing a challenge in deciding which package they should go for, should seek the advice of a professional and licensed consultant before entering into any legal agreement to ensure that it is in the best interest of the individual.
The mortgage broker, for example, can compare a range of products and lenders. This will help you save time and money, avoid confusion, and improve your chances of getting approved, as well.
It is important for the homeowner to have a clear understanding of their financial situation and objectives – keeping them in mind in order to acquire the good refinancing loan for them.
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