Assets
Items of ownership that are convertible into cash are known as assets. The resources of a person or business like cash, notes and accounts receivable, securities, inventories, goodwill, fixtures, machinery, or real estate are assets.
Bad Credit
A term used by financial institutions to categorize instances of poor financial management.
Bridging Loan
An interest servicing short term loan (up to 6 months) to help bridge over the period between the completion of purchase of a new property and the receipt of proceeds from the sale of an existing property.
Building Under Construction
Also known as BUC, it is property that is normally sold by the plans while the physical building is under construction. For such properties, the Temporary Occupation Permit (TOP) and/or Certificate of Statutory Completion (CSC) has not been issued.
Capital Gains
An amount by which proceeds from the sale of a particular asset exceed the original cost. An increase in the value gives it a higher worth than the purchase price. The gain is not realized until the asset is sold.
Certificate of Title
A written statement by an attorney that sets out the status of a property title. It will give the legal description of the land and list any registered interests in the property like mortgagees, charges and caveators.
Combination Interest Rates
Also known as Fusion package, some financial institutions have a hybrid package where the customer can have part of the loan under the fixed rate and another part under the variable rate.
Completion Date
Date on which the new owner finalizes payment and assumes legal ownership and possession of the property.
Construction Loan
Granted for the sole purpose of financing the construction of a new property, or reconstruction, addition / alteration of an existing property.
CPF Minimum Sum
A statutory requirement for all CPF members to set aside a minimum sum in their CPF Ordinary account and Special account upon reaching age 55. The minimum sum is currently set at S$94,600 as at year 2006 and will gradually increase annually by $4,000 till it reaches S$120,000 by year 2013.
Credit Limit
The maximum amount of credit that a bank will extend to a borrower.
Credit Record
This can be established through a search with the Credit Bureau (Singapore) Pte Ltd (CBS), which maintains a record of an individual's credit history with participating financial institutions.
Daily-Rest
Also known as daily-reducing, the interest will be calculated on the outstanding principal at the start of each day.
Debt Servicing Ability
Financial institutions will look at the Debt Servicing Ratio (DSR) of the customer - the ratio of affordable repayment based on gross financial commitments.
Deferred Payment Scheme
This is a scheme where the purchaser makes the initial payment, normally up to 20% of the purchase price within 8 weeks and the balance amount would only be due upon Temporary Occupation Permit (TOP) being obtained from the relevant authorities.
En-Bloc Sale
A collective sale allowing the owners of a property to come together and sell the whole property collectively in hopes of fetching a higher price as compared to selling the respective units within the property individually.
Exercise of Option
Should the purchaser decide to proceed with the purchase, the purchaser would be required to exercise the option granted by placing an additional deposit which would constitute a legally binding agreement on both parties for the sale and purchase of the subject property.
Fixed Interest Rate
Fixed-rate charges the same rate of interest throughout the duration of the loan.
Fifth (5th) Charge Term Loan
An extra loan that is normally taken for general purposes. This type of loan has to be secured against a mortgaged property.
Home Content Insurance
An insurance policy that covers the replacement cost of all contents in a property
for example TV, washing machine, beds, etc.
Joint Tenancy
The equal holding of property by two or more persons where they hold the property jointly and severally. Right of survivorship applies in joint tenancies.
LDAU Approval
Foreigners who want to purchase landed properties in Singapore must first seek the approval of LDAU (Lands Dealing (Approval) Unit - Singapore Land Authorities).
Letter of Offer
Commonly referred to as "LO", it is a formal written offer made by a financial institution to the potential borrower detailing the terms and conditions of the loan offered.
Loan to Valuation Ratio
Also referred as LVR is the ratio of the amount lent to the valuation of the security (usually the property).
Monthly-Rest
Also known as monthly-reducing, the interest will be calculated on the outstanding principal at the start of each month.
Mortgage
A pledge of a property by a borrower (also called mortgagor) to the financial institution (also called the mortgagee) as security against the loan. The mortgagee, has the right to take the property if the mortgagor fails to repay the loan.
Mortgage Broker
An organization like MoneyMind who is marketing numerous loan packages from a panel of financial institutions. Mortgage brokers offer a service where they will recommend and select the best loan or loans for borrowers.
Mortgage Reducing Insurance
A type of insurance purchased for the sole purpose of protecting the outstanding loan. The insurance cover is equivalent with the outstanding loan amount.
Negative Gearing
When the investment return is not sufficient to meet the interest costs of the loan that was used to fund the investment.
Off The Plan
The purchasing of property before the dwelling has been completed. It is usually purchased only after seeing the plans of the prospective finished product.
Option To Purchase
A legal agreement offered by the vendor to the purchaser detailing the terms and conditions of the sale of property. If accepted by the purchaser with an option deposit also known as consideration, the vendor is legally bound by the contract to give the purchaser a further cooling off period to reconsider the purchase.
Overdraft
Is a credit facility on a revolving basis which may be secured by the mortgage of a property.
Prepayment Penalty
Financial institutions may charge a fee should the customer decide to repay their loan within the penalty period (also known as the lock-in period).
Progressive Payment Scheme
This scheme is based on the developer's predetermined schedule of payment (payments are normally called for in percentages). This schedule is set out based on the different stages of development; as such payments made for the purchase would be spread out throughout the course of the development process.
Quest Line Search
This search reveals litigation suits lodged against an individual, including those by other organizations like telephone companies, power supply, etc.
Redemption Costs
Costs incurred when a loan is paid off or redeemed whether in part or in full before the end of its term.
Refinancing
Happens when you are currently servicing your existing housing loan with a financial institution and you switch to a different financial institution in order to enjoy savings from lower interest rates and/or better to gear up.
Repricing
Also known as conversion, this happens when you change from your existing loan package to a more attractive loan package that is offered by the same financial institution.
Residential Investment Loan
A loan granted to purchase a property intended for investment purposes (for example, to be rented out) as opposed to owner-occupied purposes.
Sale & Purchase Agreement
The legal contract between the vendor and purchaser detailing the complete terms and conditions of the sale and purchase. Any breach at or after this point would suffer serious financial consequences.
Security
Generally, property which is pledged as collateral/security for a loan.
SIBOR
SIBOR stands for Singapore Inter-Bank Offer Rate and it is a daily reference rate based on the interest rates at which financial institutions offer to lend unsecured funds to other financial institutions in the Singapore wholesale money market (or interbank market).
SOR
SOR stands for SWAP Offer Rate and it is one of 2 exchange-traded interest rate futures products in Singapore. The SOR is an FX forward implied rate calculated from a three month USD/SGD forwards with official fixing that is provided for by the Association of Banks in Singapore.
Stamp Duty
A form of government tax on certain legal documents and financial contracts which validates the documents or contract legally. For property related transactions, 2 different types of stamp duty is payable, namely purchase stamp duty and mortgage stamp duty.
Strata Title
A document that give you ownership of a particular unit in a larger building complex or property that you can sell, lease or transfer to another party at your own discretion.
Strata Title Board
A body constituted under Part VA of the Land Titles (Strata) Act to hear applications (1) for orders for collective sales under Part VA of the Act; and (2) relating to certain types of disputes or matters arising in respect of the strata units or the strata development including the common property.
Stratum Title
A title that records your ownership of a 'unit' of a larger property. Unlike a strata title, the owner becomes a shareholder in the company that manages the common area, not just a member.
Tenancy in Common
The equal or unequal holding of property by two or more persons. If one party dies, the deceased share of the property goes to his/her estate and is to be divided according to his/her will or the law in the absence of a will.
Valuation
A report as required by the CPF Board and financial institutions, detailing a professional opinion of the property's value so as to determine the amount of CPF withdrawal and bank financing.
Variable Interest Rate
Variable-rate also known as the floating rate is where the interest rates are constantly changing and financial institutions are guided by the Singapore Inter-Bank Offer Rate (SIBOR) to determine the rate to charge for their loans.
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