Hi,

I have a question about refinancing.

So far I have heard few scenarios and I do not know which one is true.

I will use below initials for ez reference:-
Refinance Amount = RA
Outstanding Loan Balance = OS
(90% of RA) - OS = CO (cash out)

My understanding:-
For DSR calculation is Inst for CO@10yrs + Inst for OS@35yrs.
For repayment is RA@35yrs

Scenario 1:-
For DSR calculation is Inst for CO@10yrs + Inst for OS@35yrs.
For repayment amount is follow above calculation.

Scenario 2:-
DSR and repayment is RA at 10yrs.

Please advise which is true.

Thank You.

Regards,
Bill

Thanks!!

But why would banks not consider the installment of the outstanding loan when calculating DSR?