Property cooling measures putting a kink in your investment or financial planning? There may be some relief in that arena soon.
Despite emphasis that the property cooling measures are here to stay, the Monetary Authority of Singapore (MAS) is fine-tuning part of the regulations to help owner-occupiers take a quicker step towards purchasing their own home. The current total debt servicing ration (TDSR) framework is strict and keeps a huge number of borrowers from refinancing their loans by taking advantage of the low interest rates; only properties purchase before the implementation of the TDSR framework in June 2013 can be exempted. Soon, all owner-occupiers will be able to apply for exemption from the TDSR rule and more home buyers will be able to refinance their loans more easily.
For buyers purchasing properties for investment purposes, current regulations stipulates that these loans can only be refinanced above the 60 per cent TDSR threshold if application is done before June 2017 and the borrower commits to a debt reduction plan. But now,the borrower only has to commit to replay at least 3 per cent of the loan’s total outstanding balance over 3 years.
These moves will help those who might have been affected by the oil and gas industry lapses and weakening global economy and who may need help with their existing home loans. The TDSR will still apply for new loans and industry experts continue to expect a certain amount of foreclosures on property owners who may have overstretched themselves financially or have been hit hard by unexpected income adjustments.