2 days ago i read paper saying that bank negara change stupid policy again.

now they only can give loan for 60% from your bring back income?

any different than one third?

gosh... so headache.

any advice on this guys?

This post has been edited by garagesell: Jul 7 2013, 07:17 PM


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I tot will only start after announce in budget 2014?

ok wat... it used to be 30% only.

damn... i remember got write 60% leh... which page already.. haha...

got la
2nd row 3rd paragraph...

1/3 or 30% is the rule of thumb for one's housing loan. However, the total loan of a person can go as high as 60-70%, depending on credit strength and history. Total loan can be made up of other commitments, such as hire purchase loan (car loan) and also personal loan. But assuming if one does not have hire purchase loan and personal loan, then it is possible to get a higher percentage for his housing loan. Again, this depends on credit strength, and additional supporting documents such as good history (monthly installment) and also strong credit (fixed deposits, Amanah Saham cert) will help a lot.

my housing loan baru 1/8 of my gross salary.. much rooms for free play tak yah worry. Unless wanna buy million dollar house la. then need 60% else don't be too greedy rm300k - rm400k enuff liao la.

I believe the commitment of the individual is more crucial.

60% means all of your loan (car, personal, house).

not high pay fag but i'm better down to earth.. Now days ppl buy house.. they want landed.. G&G. House need to be big but only for 2... We running out of land la.. don't need to push yourself too far. settle down with a decent condo ok liao lo.

that's during the recession time, i.e. '97?

i tot ts was talking about housing loan.

it was 30% for many years, then sometime 2006-2010, banks cud do 50% or higher. not anymore, i think.

as someone already explained, total housing, car, personal, credit card can be 60-70%.

so if 70% hutang, gross 5k, net 4.5k, pay debt 3.5k, left 1k - 2 nights with yr darling habis la...!!

seriously, i have no idea how some people can live with so much debt...

This post has been edited by AVFAN: Jul 8 2013, 01:43 AM

Tat is just the max loan limit...no people will goes to 70% hutang one la.. Lol

60% for lower income earner.

But what's the definition of lower income ?

I believe some did. It all depends on the income. 70% debt for person w 2k salary n person w 20k salary is different.

bring back income means after deduction of your commitment.

eg

income 5000 - (500 car loan) = 4500 x 60% =
2700 (Monthly Installment)

I think bring back income means after deduction of epf, socso,pcb so on.. car loan, house loan, card are all included under debt

yes of course exactly, clean commitment they'd say

Nett income/take home pay means what u get after epf and tax deduction..

In the text they mentioned 60% for NEW borrower only. It means dat repeated borrower can stil go up to 70%? Why ar?

I believe BNM should impose different level for different income.

Below 3k - 50%
Below 5k - 60%
Below 10k - 70%
More than 10k - 75%

Any opinion on this?

Let's say u earn 20k nett income, 25% disposable income (after imposing 80%) is still a cool 5k leftover for every month.

May b shud take into account living area also. 2k permonth in kl may hard to survive but it's more than ok in some state or rural area.

It was never ever 30%. Lots of people get confuse with the 'rule of thumb - 30% of your gross income'. It's just a guideline that your housing loan shouldn't exceed 30%, considering that one will also have other debts such as credit card, hire purchase loan and personal loan.

Ya I used to confused w dat too. But ur explanation make it very clear now so

The rule of thumb 30% is for HOUSING loan alone
70% is referring to TOTAL debt include housing loan, car loan so on.

Correct?

I believe now is 60% of NET income is the rule they will follow from now on and this is include all your whatever loans... Big hit to property but I think this limit our fellow Malaysian only...

Better keep your property and don't sell, after you sell it, very hard to buy back... My 2C... Hehehe...

Yes, that is correct. 30% is the rule of thumb for housing loan itself.
70% is the normal limit of total debt including housing loan, car loan and so on.

But again, it depends on case to case, and there are cases where people can drive it to even 100%!!! It totally depends on what you have.
For example, if one is planning to buy at RM1mil house and wants to take a RM900k loan. By taking this loan, his monthly commitment will be 100% of his gross income. If he can produce supporting documents that he has a RM2mil fixed deposit locked in for 5 years with the lending bank, the loan will be approved.

Keep the properties and don't sell ? Then agents will be out of job !

Too bad already... I am keeping mine for rental. Don't think can get loan easily now.. hehe..

Good also ma.. is time to eliminate those unethical agents.. Good, ethical and responsible agent will survive.

How does a slowing market affects unethical agents? It is most likely responsible agents will be flushed out.

/
U means the agents in our market now is all con man??? Haha

I think bank negara should consider about DIBS and also BLS
control this two can prevent bubble burst property.

if b4 this banks simply give out loan without the 60% check - We will have a big problem.

hmm I think this shouldn't affect anything or changes everything.

it's standard practice that 60% of clean income is made to be your commitment for your property.

the only thing that affect is 35 years maximum

(I have 2 housing loans 40 years)

DIBS isn't the main that is causing the rise in property take up and thus, the prices. People are buying more than they need, a few properties. While some might argue that they are merely investing for the future, it also means that they are buying additional property which is more of a desire than need.

Thus, I think the government should impose a cap for the margin of financing for the 2nd property onwards, instead of the current 70% for the third property onwards. I am one of those investors who have 2 properties under loans, and have taken advantage of this, with plans to get a 3rd by year end. Maybe a margin of finance structure of:

a) 90% for 1st property
b) 80% for 2nd property
c) 70% for 3rd property
d) 60% for 4th property
ed) 50% for the 5th property onwards

DIBS is necessary especially for consumers buying their 1st home and can't afford the down payment. I think it's important we assume and allocate that each person should be entitled to purchase one property comfortably but anything more than that, should be quite a burden, since the aim is to afterall make profit. The way profit is made in real estate is quite cruel, as it jacks up the price of properties out of the reach of those who need it as their 1st home.

Another direct way to prevent flippers is to jack up the RPGT. I think it should be equivalent to the max cap of 26% for transactions within 5 years from S&P, just like the ceiling rate for personal income tax. While 5 years might be really long, as compared to the current 2 years, bear in mind, for the construction of a high rise residential, 3 years is the norm. Thus, the 2 years will have no effect as people only tend to sell once the property is completed. That's where the bulk of the appreciation kicks in, once the risk of project incompletion has been removed.

Just my 2 cents.

*By the way, I'm happy if government doesn't implement the above. So I can continue abusing the current system.... :-)

Hi there, I don't think its about abusing. DIBS is about property developer selling their property at Future Price (Property Value + Total Interest)

People used to call it (Indian feeds the Angmo), so that doesn't make any difference but eventually these property are sometimes overpriced.

No doubt DIBS helped people who couldn't fork out High upfront payment, but they're actually paying for the Future Price.

+1

I like this idea. It should also restrict DIBS to first time buyer only so it can still somehow reduce (even not able to prevent) speculative market.

i think the culprit is low interest rate.

Coupled with relatively loose lending.
People say banks take into account the borrowers income but bank operations also have quotas to meet at the same time. It's a vicious cycle of self interest.

Get yourself into one... then you will know how to live ...

Ya , If the project have DIBS , the price will be higher that no DIBS
The developer won't be that naive to bear all the interest , they will included in the price

I actually strongly disagree on how it has been coined, 'paying for the future price'. When one takes DIBS, the purchase price that he/she is forking out is merely the current price + the interest amount, that's it.

That means, they are not paying anything extra when they purchase the property through DIBS. It will however inflate the price of the property and the sub sale purchaser will be the one bearing the effect. He/she will then be paying the 'previous current price + DIBS amount + appreciated amount'. That person will be paying for DIBS but not getting any it.

You are right for an investor case. Own stay will be as ProperTYcoo mentioned.

bring back income/take home pay/net income means the salary net of mandatory deductions such as epf, socso, pcb etc.

Whereas those after deducting your monthly commitment can be considered as disposable income.

I think the rule of thumb mentioned here is not the banks' guidelines, the banks are looking at total commitment and there is a bank's guideline which allows 80% commitment.

The 30% rule of thumb might come from somebody's opinion on personal finance.

Hope this may helps


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DIBS is a marketing gimmick, it's like you don't have to pay anything until completion to attract buyers especially investors which the interest's already factored into the selling price.


DIBS don't really help people who can't fork out high upfront payment as the interest is to be paid monthly on the loan disbursed which for property under construction, the loan amount is disbursed according to percentage of completion. It's the discount/rebate that matters.

I will say DIBS is beneficial to investor.
Pay 10% (Most cases), sit back and relax with 0 payment, once VP (also means installment start), then sell off the property.
So basically it eases an investor cash flow.

Most DSR are measured with their income.
Below 5k-70%
5.1-8k-80%
8k above-85%

UOB bank lagi aggressive, if u have 1mil cash you could get 200%, HLB 150%. Means I earn RM100 I can loan for RM200, cool?

But I think lower DSR measurement can prevent speculation. Seriously I don't get it when ppl earn 5k and own 2-3 undercon properties but no saving

Wow, interesting info. May I know your source of info? From what I understand, the DSR would heavily depend on additional supporting docs, and not the income. Thus, one can have RM8k nett income but DSR capped at a low level, 60% maybe, because there is no supporting docs such as fixed deposit statement, Amanah Saham...etc

hopefully government will come out with new policy to help first time buyer/ younger!

loan cap = lower and lower ( 60%)
property price = up and up ( average = 300k - 500k)

income 4k x 60% = 2400 - car loan 600 = 1800. mayb can get a low cost apartment with monthly installment 1800.

how to buy even pr1ma house....

I thought pr1ma projects come with special financing agreement..and for 1.8k/mth u can get more than low cost apartment..pls dont exaggerate..😜..unless u plan for 5 yers loan for low cost apartment..

If you are talking about high net worth customers or commercial customers, yes, it does happen.
But come back to common consumer clients, HLB's DSR guideline is at 70%.

I will appreciate if you are willing to share your source that most DSRs are measured with income.

As from my guidelines from few banks, I don't see that.

Yes, you are right. With additional supporting documents then one might get higher DSR.

With RM1,800 monthly installment, 30 years tenure, your loan amount probably around RM360,000 which means the property is RM400,000. You still can get a quite decent property with that budget.

This post has been edited by Fat3Twister: Jul 10 2013, 02:13 AM

area banks going to impose this 60% from nett income policy? I dont see it mentioned officially by bnm. or im missing something?

Just for sharing, recently there was a case I know customer abt 15K p mth, HLB allows for DSR 85%

This post has been edited by ecin: Jul 10 2013, 09:45 AM

Marketing gimmick is true because buyers don't understand how DIBS work.

Its a good scheme and helps defer some of the upfront payments.

Have to fork money for 10% down payment + interest during construction + misc fees. On top of that there is double whammy of monthly house rental while waiting for property to complete

Die standing every month, with DIBS don't suffer so much.

Once the property is complete channel monthly rent into loan repayment. Give buyers some breathing space.

^ thats for genuine house buyers. For speculators/ flippers their thinking is that 'this one can buy no need to think so much - buy now take care of it later'

Yes, it is.

Yeah, it does happen. The 70% DSR is a guideline but there are exceptional cases as there are more factors to be considered.

For credit evaluation purpose, banks will look at 5Cs of the applicants, which are:-

Character - CCRIS, CTOS, to refer your payment records
Capacity - Capacity to repay to loan. DSR falls under here
Capital - Other supporting assets such as fd, shares, unit trusts, properties etc.
Condition - external factors such as market condition, employment, if you work in MNC for a long duration, you get a high score here
Collateral - the property if you are talking about housing loan

Its from my bankers when I enquired from them (CIMB, HLB, HSBC, RHB).
UOB one is confirmed by the manager, HLB banker told me net worth >1mil they offfer up to 150%
HSBC can still get 85% with 8k nett income (before commitment)
Of coz the more your saving is, the higher the DSR can fetch

Standard still 85% for income >10k, confirmed by my HLB banker. I find good banker can really push the DSR higher (not by the book). When they do recommendation its adjustable based on your profession, age, income level, years of working, saving etc

Yes, you are right ecin

now they see how much cash u have in the bank... what we can do is.. with this cash.. one day i wish the bag will beg me my advice is start saving and make bank beg u