lcl832002,

So, why it does it matters whether you have saving NOW?? If you take a loan at 50%, your savings will not grow. You hope is your earning will grew and reduce that into 33% in the future. But, that may or may not be true. Or, you may hit a streak of bad luck and your pay will be reduced.

Dreamer

You are right, but not completely. My saving will still grow as I don't have other commitments like car, children and others. If my earning grows, my saving will grow faster... I always think of the worst scenario and make sure that it will not affect me too much before I buy something I want...

lcl832002,

So, you are saying that you can

A) Spend 50% of your gross pay in house payment

B) Pay 10% to 20% on EPF and taxes.

C) Live on 10% to 20% of your gross pay

D) Save 10% to 15%

If that is true, you should be saving 50+% now before buying a house. So, are you saving that much now??

Dreamer

Generally speaking, if you working for a company, each year you'll get salary increment, so altho now get 3K and things rather tight, 5 years later it'll generally be much better. For bachelor, saving 50%+ of 3K is not a hard thing to do.

Altho risky to get an expensive house when your salary is low, but if got rich guarantor it's worthit, coz renting means money down the drain and buying cheap house means living in problematic areas, and your property value may not go up much.

Assume you only pay installment for the house with 10% downpayment

you will need a montly salary of
7.5k for 300k house and 14k for 550k house.


In details:
300k house after 10% downpayment
--> PV= -270k loan
--> n = 15 years
--> i/y = assume 5.5% per year
--> PMT = RM 26,899 / year
-----> Montly installment = 26,899 / 12 = RM 2, 242
For a healthy financail situation, your debt should be 30% of your montly income
which mean your recommended salary = RM 2, 242/0.3 = RM 7, 473.

same theory for the other 1....

If I don't buy books I like, I can save more than 50 % sometimes. I have a very good saving habit.

What you say is right. I think it is very cheap to buy a house now as interest rate is very low. Of course, when I say it is cheap, it means that I can afford it.

As I said, if you got a rich guarantor who can bail you out when you get into trouble, then go for it. If you don't have, if I was in your place, I won't buy yet. Save for several years, build up a healthy savings buffer and then get the house. Because if you buy when you have a tight budget, and something goes wrong, you'll loose everything.

Too concervative IMO........the "n" could be extended and the "i" now is a lot lower than 5.5%...............

cic.lemur,

1) We are on the threshold of a BIG BAD LONG global recession. So, is it WISE to assume that we are in a normal time??

<< For bachelor, saving 50%+ of 3K is not a hard thing to do.>>

2) My point is if the person is saving 50+% now aka before buying the house, he/she might be able to do it. But, if he/she is not saving 50+% now, how REALISTIC that it can be done after he/she buying a house?? There are a lot more EXTRA expenses to maintain a house.

Dreamer

the "n" is the requester request 1... i just base on his criteria to come out with an suggestion....
and the BLR-2 is about we can get now, depends on different banks' offering....

being conservative or not it's all depending on different individual risk profile right...? haha...
just my 2 cents...

This post has been edited by simple.ology: Jun 12 2009, 03:16 PM

just do wat u can afford~~!!

..

This post has been edited by finest_solution: Jun 17 2009, 09:20 AM

Dear sifus,

May I know if I am affordable to get loan for a 430-450k property? Basic earning : Rm4217.5 Age:25 Commitment : Rm26k Car loan /mnthly Rm580.

Please advise.

Thanks

Commitment too high IMHO, most likely you cant qualify..
unless you are willing to put 30 - 50% downpayment..

Rule of thumb, total monthly installment should be 40% or less of your salary.
thus rough estimation, you might only qualify for loan which installment is around RM1100 per month

Does it helps if I have a backup property of worth 50% of the new property I m getting? Or you guys suggest to do early settle my car loan? I asked the banker if earlier settle only discount Rm3k.. seems not worth. Might as well put more into the new property d/p.

Actually for the loan will be into my name and mum. But my sis and a friend will be staying together. So they will be paying me some rentals.
Does it helps on the approval?

is your backup property rented out?
if yes you could use the tenant agreement as prove to the bank that its an additional income for their consideration.
if not, you could create a tenancy agreement and rent it to say your sister at a full priced market rate (of course you dont collect anything from her) and get it stamped and then every month bank in this amount into your savings account (with your own money) as prove that you receive rent. the banks normally accept it... the bad side of this is that you may have to declare it as additional tax, but there are ways to reduce this tax thingy...