Tuesday, February 18, 2014
Sunday, February 16, 2014
How much can I borrow?
This is the most important question to ask before purchasing any house.
If you like old school, we can share with you the way to calculate your entitlement.
This may not be 100% correct because every banks may have their own calculation and guidelines. But, can use as a guide.
First, write down all your commitments:
Car Loan instalment: RM1000
Housing Loan instalment: RM1200
Personal Loan Instalment: RM500
Credit Card min payment: RM5000 (Outstanding) x 5% min payment = RM250
Total commitment: RM1000 + RM1200 + RM500+RM250 = RM2950.00
Secondly, check out your latest payslip and look at your net income. For example, net income is RM10,000.00.
Normally, bank will use Debt Service Ratio (DSR) to calculate your entitlement.
Healthy DSR will be less than 70%.
For example, net income RM10,000 x 70% = RM7000.00
***Your existing commitment and new instalment cannot exceeded RM7000.
If your commitment is RM2950, your new instalment should not exceeded RM4050 ( RM7000-RM2950 = RM4050)
So, how much you can borrow with instalment RM4050.00?
Now you have to work backwards, if your age is 30 yrs. The maximum tenure now offer by bank is 35 year or up to age 70 years, whichever comes first.
With 30 years old age, you can still entitle for tenure 35 years.
Interest rates offer in the average of 4.20% or 4.30% per annum.
I manage to get RM890,000 loan amount for instalment RM4050.00
If RM890,000 is 90% of loan amount, the purchase price you are entitle to purchase is RM890,000 / 90%( max margin) = RM988,888.88
So your entitlement of purchase price is, house price not more than RM988,888.88.
Are you able to calculate?
Don’t worry, if you are confused.
Friday, February 14, 2014
Thursday, February 6, 2014
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