Because we now provide a guarantee to refund you a cool $1,000 in cash upon T.O.P. (for min. loan $800,000) – should you decide to refinance out for the lowest home loan rates, and as a result, incur a cancellation fee typically 0.75%.
This added “loan feature” is unique to MortgageWise and will not be available if you apply directly to the bank or through another broker or agent.
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We take pride being thought leader and innovator in the mortgage planning space in Singapore. Clients who have worked with us since 2014 not only benefited from our forward-looking & comprehensive advice, but enjoy a whole series of benefits ranging from a sign-up gift of $200 FairPrice gift card (for purchase), special legal fee rate from our partner law firms, to receiving a $50 grocery gift card for every friend or family member that you refer to us successfully. So many clients were pleasantly surprised to get a ceaseless courier delivery of gift cards every year, on top of helping all their loved ones benefit from our advice. This referral benefit since 2014 is reserved only for existing MortgageWise clients – you first need try our service.
Announcing yet another innovation and this time it’s for purchasers of newly-launch projects who face this issue of cancellation fee at T.O.P. – MortgageWise’s Letter of Guarantee for $1,000 Refund (min loan $800,000)
Why Is It Important?
Before we explain how our guarantee works, first let us explain why this is important for those taking up a BUC (building-under-construction) new purchase home loan.
Many are still unaware of a cancellation fee on any undisbursed loan if one refinances before the legal completion of a new project, a stage known as the C.S.C. (certificate of statutory completion). CSC is usually obtained about 9 months to a year (sometimes longer) after the collection of keys. So, at T.O.P. (temporary occupation permit) stage, even though your bank would have disbursed to pay up to 85% of the purchase price, there’s still a balance loan of 15% (on the purchase price) yet to be called for by the developer. At this juncture if you decide to refinance to the lowest fixed rate home loan from another bank – a scenario that’s more likely now given inflation expectation – any portion of the loan yet to be disbursed will be treated as cancelled. The bank will then slap a cancellation fee typically 0.75% on the amount cancelled. For a purchase price of $1.2m, this works out to be roughly $1,350 (0.75% on undisbursed loan of $180,000).
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Of course, there’s always a free conversion at T.O.P. for all BUC home loans where the bank waives any repricing or cancellation charges and allows you to switch to another home loan package within the bank. Again many first-time purchasers are not experienced enough to know that – as an existing customer you may not get the same lowest rates as a new-to-bank customer. For free conversion, most banks’ letter of offers are worded like this (or some variations of it): “..provided this request is to convert to the interest rate package determined by the Bank from time to time..”. It must be converting to a home loan package that’s determined and offered by the bank. And from our experience, this difference between what the bank offers for free conversion (knowing you can’t quite leave yet because of cancellation fee) and what could be the lowest rate in the market can be as much as 0.20%. That’s a savings of easily $2,000 per year for a loan of 1 million, or $4,000 over two years. But refinancing out means paying cancellation fee in the range of $1,100-1,600 (0.75% on undisbursed loan) which wipes out a good portion of the interest savings from switching banks.
For free conversion, most banks’ letter of offers are worded like this (or some variations of it): “..provided this request is to convert to the interest rate package determined by the Bank from time to time..”
How Does It Work?
To solve this dilemma, we now offer you a “refund” on this cancellation fee capped at $1,000, comprising $850 plus our usual refinancing rewards of $150 FairPrice gift card converted into cash for you! This will be paid out by us MortgageWise.sg to you, with only two simple conditions:
- You apply for both the BUC home loan (min $800,000) and the subsequent refinanced home loan at T.O.P. through MortgageWise.sg and both are home loan packages which the bank is paying us the standard referral fee (otherwise we will tell you).
- You show us proof of this cancellation fee charged, usually by way of redemption statement by the bank.
There may still be a few hundred dollars excess charges you have pay, as this $1,000 will not cover the entire 0.75% cancellation fee fully. But it does eradicate it from becoming a show-stopper for refinancing at T.O.P. Essentially, we “level the playing field” for you – should your existing bank not offer the absolute lowest interest rate, you are now free to choose from amongst all the banks out there who might be hungrier for your business.
More importantly, you might want to choose a home loan package that offers a waiver of penalty due to sale within the lock-in period, should your existing bank not have that. Property prices tend to rise after T.O.P.
Essentially, we “level the playing field” for you – should your existing bank not offer the absolute lowest interest rate, you are now free to choose from amongst all the banks out there who might be hungrier for your business.
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Can I Trust This Guarantee?
Sure you can. Though we are not Fortune 500 companies but we take our promises seriously – we have not disappointed any of our clients with our Rewards or Referral scheme since we become operational from 2014. See our testimonials page.
It’s been almost 8 good years, or put it another way, it’s more than two under-construction projects back-to-back. We’re still going strong.
However, to give you more assurance, we will issue you with a serialised “Letter of Guarantee” from LoanWise Pte Ltd, the legal entity behind our brand MortgageWise.sg. Your name, property address, and PayNow mobile number will be printed on it, along with the full wordings of what we guarantee. You may keep this as your official record to claim against us at T.O.P. if you like. This guarantee is fully backed by us, a Singapore-registered company with zero corporate debt and with our registered office fully-owned by us at International Plaza.
Though we have every intention and every resource to continue as a going concern, we know you might ask “what if we cease operation voluntarily or involuntarily?”. After all, life is unpredictable. For example, our industry could get disrupted, or banks could one day stop paying referral fees to mortgage brokers. We can only seek your understanding as there’s only so much we can guarantee as a company with every good intention and purpose. You are certainly not any worst off even if that happens. Conversely you have much more to gain, in all likelihood, as we will continue to grow from strength to strength with our relentless focus on giving our best to our clients. In other words, this guarantee is a good-to-have or a bonus.
Why Are You Offering This?
We are effectively brokering one, out of two loans, for free. So, whatever income we earned on your first BUC purchase loan is not recognized, instead it is ploughed right back to a fund which we will set aside to back up this guarantee scheme.
Forgoing that one deal allows us to put you – our valued client, in a position to choose freely at T.O.P. We see this as aligning with our core mission here at MortgageWise – to ensure that every client who partners with us always get the best deal out there. This is true when we choose to be 100% transparent presenting direct-to-bank rates when other brokers might choose to keep mum. With this refund guarantee, this is again true when we make sure at T.O.P. you are free from encumbrances to access the best deal in the market. And this is our commitment to you – as long as you are a MortgageWise client, you will be in that position to win every time you need to review a mortgage.
Compare Singapore home loan rates using a comprehensive, fast and free service from MortgageWise.sg, in operations since 2014. Be it to refinance home loan, buy your next Singapore condo , or even explore commercial property loan, speak to our dedicated team of mortgage consultants at your service today!