By now, most Singaporeans would be aware of the new property cooling measures implemented by government. While most attention is focused on the eye-popping Additional Buyer Stamp Duty (ABSD) of 12%, the more sinister aspect of the cooling measures for existing private property home owners should be the Loan-to-Value (LTV) limits. In the worst case scenario, existing home owners may be forced to do margin top ups if their property value plunged in the next few months.
Read on to find out why LTV can be so important to your home loan and why you should pay attention to this cute little rule because if property prices dropped in the coming months, you would likely to suffer refinancing nightmares. And I am not joking.
Many Singaporeans assume that property prices would keep rising. But this may not necessary be true. A lot of factors come into play but ultimately, supply and demand still play a major role. In this respect, the outlook for home prices is quite gloomy. And existing home owners may need to pay attention to the LTV ratios. Just picture the following.
According to URA, as at the end of 1st Quarter 2018, there was …