World Leaders Scramble To Save Financial Market

Bad news after bad news, nothing seems stopping the global financial system from sliding further. World leaders are scrambling to prevent their country's financial system from a total collapse due to the US Financial Crisis.

The global market has not seen anything this bad since the last Great Depression in 1929. With the advancement of technology and global unity, a Great Depression may be avoided with a unison effort. Governments are pouring out huge amounts of money to secure their banking system so that it will not collapse.

The problem started from the US Financial Crisis (and sub-prime) which was a huge failure of the administration who has neglected their financial system right from the start. Should they be attentive of the on-goings (instead of war), the situation wouldn't have arise today. However, this gives test to how best problems can be overcome when all are united to fight it.

If the crisis is not overcome soon, it may result in a potential Great Depression. The signs today are similar to that of 1929, i.e Global recession and collapse of stock, etc.

http://www.channelnewsasia.com/stories/afp_world_business/view/384720/1/.html

Do Your Homework - Check Your Credit Standing

Before buying any property, buyers are advised to understand where their credit rating is. During downturn, banks are usually stricter with loan approval thus some may not be able to get a loan.

Banks usually looks at a few factors to approve loans. They can include (not limiting), Credit Bureau Rating, any litigation, income, fixed expenses (eg loans), source of income, etc. Even if the applicant has good rating and no on-going litigation, sound income, etc, they may still not secure a loan.

Potential property buyer need to ensure they are able to secure a loan before they place a deposit for a new property, or face a risk of loosing their deposit.

Advise, please seek an in-principle approval before acting on a purchase.

The Coming Property Correction/Crash

When everyone is buying, don't buy! When people are selling, it's time to go shopping!

That statement I told myself is proving itself loud and clear. In the 2nd half of 2007, property prices sky-rocketed and many investors rushed in and some made a tidy profit. The unsavvy investors (followers) joined the fun, hoping to make a tidy profit as well. They bite more than they could chew.

The property market experienced a boom, from July to December 2007, was partly caused by the prolonged recession and economy setback between 1998 to 2004. During this period, property prices plunge. Post 2004, the economy started to recover and investors started their buying spree, causing the property market to recover and saw an exponental growth.

Some novice investors tried their hands and purchased more than their finances could afford. They could have experienced one promising return, and bought a lot more than they can truly afford. For example, their financial ratings may allow them to buy (with loan) one property, but some of these investors bought 3 or more units.

They purchase properties on Deferred Payment Scheme, where they placed a 20% deposit and hoping to sell the property before the Temporary Occupation Permit (TOP) is issued. With the sudden turn of stock market (bear market), which coincide with the TOP period, many of these investors are stuck with their property. Facing a TOP, they will be forced to sell their property or face potential bankrupcy, as they are unable to funish the balance 80% of the property price.

These investors will be forced to sell/dump their purchase, loosing their initial 20% downpayment or more. With more sellers and little buyers, property owners will end up having to sell at a very low price.

Time to look out. The worst is not over.