12 Years In Mortgage Advisory: Q&A with Ally Yang, Head of Mortgage at HugMortgage

With 12 years of experience in mortgage advisory in Singapore, she is especially familiar with the ‘ins-and-outs’ of the entire mortgage process. She is also well-versed in relevant law and regulations. 

Singapore-based start-up HugProperty, a property platform which provides potential buyers and sellers with expert knowledge and insights, has launched HugMortgage, a subsidiary focused on providing unbiased mortgage services to their customers. In line with the launch, HugMortgage has also appointed mortgage expert Ms. Ally Yang to spearhead the division.

HugMortgage boasts a seamless user experience with easy navigation and an array of easy-to-use tools such as the Mortgage Loan Calculator, Refinance Calculator and Total Debt Servicing Ratio (TDSR) Calculator. These tools equip users with the adequate knowledge to make an informed decision on their mortgage.

LadyBoss team spoke Ally on the her new role at HugMortgage.

Q: Tell us more about HugMortgage.

A: HugMortgage displays the various current rates from the different banks for the users to browse, compare and apply. We also take it one step further by ensuring every single application made through HugMortgage, is being reviewed and approved for processing by our Head of Mortgage Advisory Ally (with her 12 years of local mortgage experience) and team.

This ensures our customers get the most ideal packages available at the point in time. (Occasionally, banks can offer preferential rates on short notice. We will make sure we are able to offer this opportunity to our customers by ensuring our rates are as up to date as possible.)

We also have our Dr. HugMortgage Chatbot who can, on a 24/7 basis, instantly respond to queries about home loans and provide a diverse choice of interest rates available from all participating banks.

While much can be done online these days, we know we have clients who may not be well-versed with online applications or mobile Apps. Therefore, we have a dedicated island-wide mobile team who can help customers with the retrieval of documents or address queries face to face.

Dr. HugMortgage Chatbot who can, on a 24/7 basis, instantly respond to queries about home loans and provide a diverse choice of interest rates available from all participating banks.

Q: What is your background and what led you to HugMortgage?

A: I graduated from Peking University with a Major in LLB (international laws), diplomacy & foreign affairs management and a Minor in Economics.

I have also completed a Masters of Arts (Southeast Asian Studies) from the National University of Singapore (NUS).

I have 12 years of experience in mortgage advisory in Singapore. When I graduated from NUS with a master degree in 2003, I tried working in a sub-contractor company and some insurance companies but got “hooked” to mortgage brokerage when I first came across it back in 2005.

Mortgage brokerage is a very rewarding job as you get to help your clients save money and see their delighted faces when you meet them. Knowing that my clients appreciate my work, is what keeps me going in this industry.

I met the co-founders of HugProperty through a friend, after meeting with them, we decided to branch out into mortgages, and HugMortgage was born! Currently, there is no clear market leader in the mortgage brokerage industry. HugMortgage hopes to spread awareness about the industry, so more home owners know about the availability of free and unbiased mortgage advice. This helps them to save time and effort since they no longer need to do their own research. Home owners can leave it to the experts to recommend a mortgage package that best suits their needs.

Q: What is your role at HugMortgage?

A: At HugMortgage, I am responsible for providing clients with in-depth analysis on their existing mortgage loans and recommending suitable plans to suit their needs better.

Q: As a mortgage expert, what are the challenges you face & how do you overcome them?

A: Firstly, many home owners are unaware of the existence of the mortgage brokerage industry, which cost them a lot of time and effort in doing their own mortgage research. By spreading awareness, HugMortgage hopes to help more home owners with their mortgages, providing them with expert advice and the latest mortgage rates available in the market. For the home owners, they don’t have to do their own research since a veteran mortgage broker will be assisting them for free. It is a win-win situation for all – home owners get free expert mortgage advice, and we get a referral fee from the banks.

Secondly, as we get a referral fee from the banks, often, clients are worried that we might be biased in our recommendations. As HugMortgage will receive the same referral fees from all banks, there would not be a conflict of interest situation where we would suggest a bank’s mortgage over another’s. This policy ensures that our customers will be provided with unbiased recommendations of the mortgage package that best suit their needs.

Q: What are the different types/forms of Mortgages?

A: There are fixed rate and floating rate mortgages available, which ranges from a period of one to three years.

Fixed rate mortgages, remains the same for a certain period and could vary after that.

Floating rate mortgages have different benchmarks like bank board rates, SIBOR, and bank’s fixed deposit. The interest rates will then vary based on the different benchmarks.

There are also non-interest-offset and interest-off-set mortgages which cater to clients who are business owners and individuals with a certain amount of cash savings.

As we get a referral fee from the banks, often, clients are worried that we might be biased in our recommendations. As HugMortgage will receive the same referral fees from all banks, there would not be a conflict of interest situation where we would suggest a bank’s mortgage over another’s

Q: What is the common mortgage process in Singapore?

A: Usually, for property purchases, we encourage the property buyers to get an in-principle loan approval (IPA) before searching for properties. This ensures that they know their budget so they can streamline their property search and find suitable properties. Most importantly, this prevents a situation whereby the buyer has committed to a purchase, and the actual loan falls short of the sale price, leading to a failed transaction. In such cases, the option fees paid could be forfeited.

For refinancing, all banks require a minimum three-month written notice if the home owner is refinancing with another bank. Home owners should plan about four months before the expiry of their lock-in period for their refinancing move. This ensures a smooth transition from one bank to another. If late notice is given, home owners could be stuck with their current mortgage package and pay higher interest rates if the next anniversary rate increases.

Q: What are some of the tools users can leverage on HugMortgage

A: At HugMortgage, we have an array of easy-to-use tools such as the Mortgage Loan Calculator, Refinance Calculator, and Total Debt Servicing Ratio Calculator. These tools equip users with the adequate knowledge to make an informed decision on their mortgage.

For users looking for a quick answer to their home loan queries, our Dr. HugMortgage chatbot provides instant replies round the clock and offers the latest rates available from all participating banks.

Q: What are some of the common mistakes when selecting Mortgages?

A: I often hear from clients that they do not fully understand mortgages except that they have a vague idea of the interest rates.

A few problems commonly faced include:

Firstly, choosing floating rates over fixed rates due to a lower first-year interest rate. Floating rates are subject to changes, and the initial lower rates might not be as attractive upon comparing the average interest rate of a fixed rate package. For example, for a floating rate package of 1.4% in the first year, 1.6% for the second year and 1.8% for the third year means an average interest rate of 1.57%, assuming a lock-in period of three years. A three-year fixed rate package of 1.5%, might seem higher than the initial 1.4% in the first year of the floating rate package, but it is more cost-effective overall. Mortgagors should evaluate the package as a whole instead of simply choosing the package with the lowest first-year interest rates.

Secondly, with the myriad of mortgage packages available in the market, mortgagors might not be able to clearly differentiate between packages. Nowadays, there are fixed deposit (FD) pegged rates, fixed deposit home rates (FHR), SIBOR pegged and even bank board rates being made available. Some mortgagors might think FD-pegged and FHR-pegged rates are fixed rate packages, but in reality, they are floating rate packages. By rule of thumb, fixed rates are a standalone figure while floating rates usually consists of a formula.

Thirdly, it is especially common for mortgagors to leave it too late when refinancing their mortgage. They usually decide to refinance only when they receive the bank’s notice of interest rates rising – usually one month in advance. However, a minimum three-month written notice is needed for any refinancing move. Hence, mortgagors should set a reminder about four months before their lock-in period expires, this is to allow ample time to send a written notice before the expiry of the lock-in period.

Fourth, ignoring or forgetting the claw-back period when carrying out refinancing. This applies to refinance cases where subsidies or cash rebates are offered. If the loan is fully repaid or refinanced to another bank or if the property is sold within the first three years, the bank will request for the full refund of subsidies or cash rebate previously given to the mortgagor. A lot of mortgagors overlooked the claw-back period and did not include it in the calculation of their refinancing move. They are then shocked when the banks claim back the subsidies or cash rebates upon refinancing or selling the property. Therefore, mortgagors should keep the loan agreement for future reference.

Factors like cash rebates, legal subsidies, lock-in periods, claw-back periods and average interest rates should all be considered before selecting a mortgage package.

Q: Any tips to secure the best mortgage deal?

A: Since mortgage packages are always changing, potential mortgagors might find it challenging to stay updated on the latest rates and offerings available.

If they are interested in hunting for the best mortgage deal themselves, it is important to note that mortgage packages should be evaluated as a whole and not just based on the package with the lowest first-year interest rate. Factors like cash rebates, legal subsidies, lock-in periods, claw-back periods and average interest rates should all be considered before selecting a mortgage package.

However, the best tip is to engage a trustworthy mortgage broker to source for the best mortgage package for you. It is completely free, and the mortgage broker will recommend the most suitable mortgage package based on your needs, saving you the hassle of doing it yourself.

Q: What is success to you?

A: Success to me means having a balanced life. A balance between having a sound financial position, spending quality time with friends and families, and indulging in personal time to wind down and relax. These are important aspects of life that are dear to me.  I believe a good balance will lead us far in our journey through life.

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