Hello,

First of all, let it be known that a fully paid house is not subject to the:

1. 70% MOF limit on the 3rd and beyond housing loan BNM ruling. As such, it can be finance for up to 90% of its value

2. 10 year tenure commitment calculation for the cash-out portion; your application will be calculated at a maximum of 35 year tenure (for the commitment AS WELL AS installment calculation) just like a normal housing loan application.

So these 2 points above work in your favor.

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Now, the house belongs to your mother with her name, but not yours on the SPA, correct? But you are the one with the big income; as such you are the ideal person to be the applicant for the loan. I would suggest an outie-3rd-party loan application which is a loan application with:

X as the person who owns the house, but Y is the one who applies for the loan with the house as the collateral. Of all the banks that I represent and know of, only OCBC can do an outie-3rd-party loan application.

Other banks are able to do an innie-3rd-party loan application only. That is X owns the property, X and Y both apply for the loan application with the house as the collateral. If your mother has an income, we can do an innie-3rd-party loan application while if she does not, or you would not want to burden her, it is best if we stick with outie-3rd-party loan application with OCBC.

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In a way, yes it is wise to settle the ASB loans and use the cash that you get from this refinancing to maximize your ASB units; you are simply switching your ASB loans for Housing loans with much lower interest to finance your ASB investment.

However, you may also consider investing the cash-out into other funds that gives higher than BLR-2.45% returns, while also keeping the ASB loans that are paying itself anyway through dividends (provided that you don't spend the dividend)

Whether or not any of these moves are wise depends on how you would like to roll. Do you want to be highly, medium, or lowly leveraged? A younger person with high income may want to be remain highly leveraged since it will give bigger and better rewards once you enter retirement, however, it also comes with the risks such as less than stellar performance by these funds that you invest it. ASB has never given a return of less than the BLR rates, however, the same cannot be said about other funds.

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Car loans are calculated based on simple interest, when you want to compare it to a housing loan which uses reducing balance interest calculation, you need to convert the simple interest into reducing balance interest. However, keep note that a simple interest loan such as Hire Purchase as well as Personal Loans have already had the interest included into the outstanding balance. Which means that even if you settle these loans ahead of time, you WILL HAVE TO pay the interests on the remaining years anyway. The rebates given when you do early settlements are the prerogative of the bank's officer.

So in short, I do NOT recommend for you to make an early settlement on your car loan. Instead, invest the money in TH, ASNB or other unit trust funds.

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I can be contacted at +6 013 369 3993 if you would like to proceed with the application. I also offer other kinds of services, including, but not limited to investments in equity.

Will it be a problem as my mother is age 60 in 2015?

if refinance under your mother name, tenure will be 10 years max, You can refinance and cash out under your name, 35 years is possible if your age us below 36 of years

Is it possible to cash out for a period of 35 years? Seeing as you recommend OCBC and HLBB which can up the tenure to 35 years?

35 years is possible as above mention, DSR can even reach 35 years as your house is now unencumbered, easier acceptance.

Is it wise to settle my ASB Loans as their rates are BLR-1.65% as compare to Refinance rates of BLR-2.45%(approx.)?

Yes it's radical decision to do so as u will save alot.

Is it wise to settle my car loans seeing as car loans rate a approx. 1 to 2% only?

CAR loan is in flat rate term, but with 2% flat rate calculation, paying it off with cash out amount is not worth. as the reducing balance rate for BLR-2.45% account for higher interest than the 2% car loan.

I also plan to cash out additional funds for emergency savings/life savings which I will put into ASB/ASB2 accounts. Again, comparing rates, ASB/ASB2 dividend of minimum 6% p.a as to Refinance rates of 4.4% p.a. (BLR-2.45%). Is this a wise decision?

It is wise for you to invest into ASB with your cash out amount, it also depends on your investment and risk appetite, as the ASB return yield is always higher compare to BLR-2.xx% .