HDB Loan or Investment

[pianist]

which area of hdb did u buy? care to share?
is this yr first & own-stay house purchase?

my take is, if is own stay, pare down the debt to ltv around/below 70%..why because it quite hard to shake 30% off the value in a distressed situation in sg..so at this range, u dun really bother about the risk bank/hdb will able foreclose it. literally the house is yr forever....safely

[Art or Science]

Thanks all for giving your opinions.

I don't really intend to use my oa in cpf for investments. Too conservative ahh

Gonna use my oa to pare down my loan amount/debt such that my 'loan to income' ratio is something I'm comfortable with - ideally less than 25% IMOH.

As CY09 pointed out earlier, I guess the crux of the matter is whether one's ROI is better than HDB loan of 2.6% (if you are taking HDB loan).

I'm still pondering about this point though..

[yeh]

Hi art,
not sure you heard about NTUC growth fund before? me and my hubby doing monthly 660 investment since 2006. this investment link, can sell anytime you feel like.
also, we did set aside some money in FD and money in OA.
my housing loan is under HSBC sibor , now think < 1.4%
so once interest rate hike, i will using those money to settle my hdb loan.

[Ray168]

6 Reasons Why You Should NOT Repay Your Housing Loan Early.

http://www.bigfatpurse.com/2009/01/6-rea...oan-early/

[brattzz]

6 Reasons Why You Should NOT Repay Your Housing Loan Early.

http://www.bigfatpurse.com/2009/01/6-rea...oan-early/

Yes, thanks for the quote, i benefited from Dennis Ng's posting back in the old forums and when he was around, still missed him and his factual postings though...but such is life.

So far, except for the low-interest rates due to the QEs, i still think that the benefits of holding cash overwhelms repaying the HDB loan...

for me, i drag the loan out a long as possible, and invest the cashflow!!

[Freenasi]

Should take the loan and maxmise the loan period. At 2.6%, and by renting out (if you can) you will have a net return of around 5~7%. This is free cash flow into the pocket. And not forgetting the hdb price appreciation. Good investment that every citizen/PR should have.

[Temperament]

Provided we are quite sure we have the confidence and knowledge to invest for better returns for 20 to 25 years. If not why pays .1% + miscellaneous admin. fees for 20 to 25 years? The basic is the only roof for your head is not to be trifle with. Must be quite sure you can do it for 20 to 25 years.

[brattzz]

Provided we are quite sure we have the confidence and knowledge to invest for better returns for 20 to 25 years. If not why pays .1% + miscellaneous admin. fees for 20 to 25 years? The basic is the only roof for your head is not to be trifle with. Must be quite sure you can do it for 20 to 25 years.

Well, i share your conserative points, and have done so investing in conservative companies too, but i still cannot measure how can we be sure of something that is 20 to 25 years ahead going through that period and then on the hidside, conclude that it's well-spent or not.

My approach will be to look at the current situation and tools that i have,
which in this case, is the cashflow from NOT paying down the hdb loan, and is the equity/gold/FD/bonds/Hedge market still able to offers x+1% returns more...

And the best advantage of having cash in hand, is CASH IS KING..
Don't lock up your cash in hdb... Money is more potent when it's free and invested! (in many multipler tools)

End of the day, its still up to individuals's risk taking, and most important, is compentency, which we seek to improve ourselves, everyday of our life,

There is no FREE lunch in this world~!

[Riderr2000]

My thought process: I wanted to set aside cash for paying off the housing loan, from cash for investments. I didn't want to pay off the loan, in view of the current low interest rate environment (under 2%), so I used it to buy higher yielding corporate bonds (over 4%) - currently I feel comfortable with the risk of falling bond prices, but will probably re-assess come year end. I think at some point over the next two years, it will make more sense to sell off the bond to pay off the housing loan.

[yeh]

Ok. My hubby set aside some money in FD.
Also we bought a grow fund. Since 2006.
My hubby cpf + my cpf. Think should be able to settle the HDB debt clear.

I have a portfolio generate 4% dividend. And 50% cash to invest if any crash.

I think, so far. I plan well for it.
Investment+back up fund for housing/emergency.