Biggest loan you make in yuor life before?

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10-02-12, 14:37
DC33_2008

I guess it is safer to have the monthly loan repayment to be one-third of the household income. If monthly repayment is really $6800, the household income should be $20,000 on the safe side. Just in case if there is a loss of one income due to retrenchment, health, etc, there is still one working person with $10,000 (if both husband and wife has the same montlhly salary). There will still be some $ after repaying the loan. Suitation will be better if the project has completed and having rental income. Just my thought.

Quote:

Originally Posted by roly8

i went to calculate for 1.5 million @ 2.25% interest for 30 yr
you need to pay around $6800++/mo

i put 2.25% interest so that we don't get offguard with rise of interest rate later in 10 or 20 yr time ..(as compare to the low interest happen at current market now)
10-02-12, 14:38
mygeemeel

Quote:

Originally Posted by Worsty

Law and medical school is quite expensive for 6 kids..hahaha... unless you plan for them to all be very good salesman....

Hmmm... gotta rethink my retirement plans. Sekali they all good for nothing, i might end up working until 100 years old.
10-02-12, 14:46
ysyap

Quote:

Originally Posted by DC33_2008

I guess it is safer to have the monthly loan repayment to be one-third of the household income. If monthly repayment is really $6800, the household income should be $20,000 on the safe side. Just in case if there is a loss of one income due to retrenchment, health, etc, there is still one working person with $10,000 (if both husband and wife has the same montlhly salary). There will still be some $ after repaying the loan. Suitation will be better if the project has completed and having rental income. Just my thought.

I would have to agree with this... my monthly loan repayment is less than 30% of my household income... if interest rates rise, it may become 40%... no joke! :scared-4:
10-02-12, 14:47
ysyap

Quote:

Originally Posted by mygeemeel

Hmmm... gotta rethink my retirement plans. Sekali they all good for nothing, i might end up working until 100 years old.

Ask them to all get scholarship so free university education and secured work after graduation already.... ;)
10-02-12, 14:48
DC33_2008

You have to look for your own passive income for retirement. Cannot just rely on children. Do not want to be a liability to my children and the nation.

Quote:

Originally Posted by mygeemeel

Hmmm... gotta rethink my retirement plans. Sekali they all good for nothing, i might end up working until 100 years old.
10-02-12, 14:52
DC33_2008

That is why cannot play with own roof. Own roof must be fully paid up and play with only investment properties. Not fair for family if had to move the whole family out and move to rented flat. :doh:

Quote:

Originally Posted by ysyap

I would have to agree with this... my monthly loan repayment is less than 30% of my household income... if interest rates rise, it may become 40%... no joke! :scared-4:
10-02-12, 14:55
ysyap

Quote:

Originally Posted by DC33_2008

That is why cannot play with own roof. Own roof must be fully paid up and play with only investment properties. Not fair for family if had to move the whole family out and move to rented flat. :doh:

I turn it the other way round. Moved to a house under loan mortgage but rent out a fully paid house! :cheers1:House with loan is newer and everything better... Lol! :D
10-02-12, 14:59
DC33_2008

My investment properties are usually 2 bedders. Not enough space for the family. So got to stay put.

Quote:

Originally Posted by ysyap

I turn it the other way round. Moved to a house under loan mortgage but rent out a fully paid house! :cheers1:House with loan is newer and everything better... Lol! :D
10-02-12, 15:01
ysyap

Quote:

Originally Posted by DC33_2008

My investment properties are usually 2 bedders. Not enough space for the family. So got to stay put.

Good good... u contributing to govt's call for procreation... :cheers1:or you are looking after the elderly too? :)
10-02-12, 15:05
DC33_2008

Quote:

Originally Posted by ysyap

Good good... u contributing to govt's call for procreation... :cheers1:or you are looking after the elderly too? :)

Too use to staying in landed & like the environment.
10-02-12, 15:07
mkl22

wah everyone here so daring and loan so much. i dare not even loan more than 20-25% of combined income.
10-02-12, 15:11
stl67

Quote:

Originally Posted by Worsty

Depends. if you're doing IB, capital markets etc the bonus is attractive. Back office on the other hand is in a sorry state of affairs. Also depends on which banks you're working for. Some aren't even paying bonuses for these few years to their back office staff with increments of 1-3% annually.

The banking industry could do with some reallocation of profits amongst the departments.

this one sounds like my bank.. i am from the support unit. years back, the traders got ridiculous bonus.. these few years not so good but still better then the support unit.
10-02-12, 15:13
ysyap

Quote:

Originally Posted by mkl22

wah everyone here so daring and loan so much. i dare not even loan more than 20-25% of combined income.

Loan what you are comfortable after doing your sums... that's very important! ;)
10-02-12, 15:14
5577

Quote:

Originally Posted by ysyap

I turn it the other way round. Moved to a house under loan mortgage but rent out a fully paid house! :cheers1:House with loan is newer and everything better... Lol! :D

My take is:

When young, abled and working - Stay in a place big enough to house parents, kids, pets and self regardless fully paid or otherwise

When old, frail and retired - Stay in hdb 3 room flat near amenities with other half and/ or a pet that is fully paid up with passive income coming in every month :D :D :D
10-02-12, 15:16
jwong71

Quote:

Originally Posted by hopeful

wah biang, you mentioned you nearly kena retrenched and still want to take million dollar loan.:doh::doh:.
Bedok Reservoir waiting for you.

ha~ha:D

yowetan: you really die die wanna rush onto the props bandwagon
10-02-12, 15:22
5577

Quote:

Originally Posted by mkl22

wah everyone here so daring and loan so much. i dare not even loan more than 20-25% of combined income.

well, everyone has different risk appetite. although recommended loan repayment should not exceed 35% of income each month, some people are still willing to push their limit to 40% or more if they do not have any other commitment.

Eg. Single, earning 10k, who spends only $3k or less a month.

There are also people who are so risk averse that they rather save every $ they earn in a bank even when banks pay close to nothing for interest. :beats-me-man:
10-02-12, 15:27
DC33_2008

That is why we must educate out children well not just academically strong but financially smart too.Professors do not teach us how to earn $ from jobs but never teach us how to leverage and make more $. :o

Quote:

Originally Posted by 5577

well, everyone has different risk appetite. although recommended loan repayment should not exceed 35% of income each month, some people are still willing to push their limit to 40% or more if they do not have any other commitment.

Eg. Single, earning 10k, who spends only $3k or less a month.

There are also people who are so risk averse that they rather save every $ they earn in a bank even when banks pay close to nothing for interest. :beats-me-man:
10-02-12, 15:28
chiaberry

Quote:

Originally Posted by mkl22

wah everyone here so daring and loan so much. i dare not even loan more than 20-25% of combined income.

I agree. When I was in my 30s and income > 10K/mth, we dare not even borrow close to 1mill.
10-02-12, 15:30
DC33_2008

May be 1 mil then is very different from now. $1m buy far fewer things now.

Quote:

Originally Posted by chiaberry

I agree. When I was in my 30s and income > 10K/mth, we dare not even borrow close to 1mill.
10-02-12, 15:33
CCR

Any difference is someone with household income of 10k but have two loans of 1m each... And rent out one? So can I say he only worry about his 1m loan?
10-02-12, 15:33
price

If you've got a few rental properties, does that counts to your household income? :millie: :millie: :millie:
10-02-12, 15:38
CCR

Important question indeed... Do rental properties count as income or outstanding loan?
10-02-12, 15:45
gn108

And the generation before us laugh at us when WE did a >20 year loan.
Each cohort pushes the envelop ...causing the asset price to inflate.

I was 31 when when I took a 600k loan (combined was above HDB ceiling) and was a nervous for years!

Quote:

Originally Posted by chiaberry

I agree. When I was in my 30s and income > 10K/mth, we dare not even borrow close to 1mill.
10-02-12, 15:48
5577

Quote:

Originally Posted by DC33_2008

That is why we must educate out children well not just academically strong but financially smart too.Professors do not teach us how to earn $ from jobs but never teach us how to leverage and make more $. :o

I think, the word should be 'street smart'. :D

You will find that a number of successful people from humble background. Some do not even have much education. They have little or even nothing in their pocket when they start off.

However, because they are street smart, they know how to grab the opportunity when it presenst itself. Education only gives you a better headstart. It doesn't gaurantee success or $$$.
10-02-12, 15:50
5577

Quote:

Originally Posted by gn108

And the generation before us laugh at us when WE did a >20 year loan.

If interest rate remains this low for many years to come, who would dare to laugh at you for taking a loan with long tenure?!?!?! :D :D
10-02-12, 15:54
EBD

Quote:

Originally Posted by yowetan

I am at consumer banking.

Seriously, you work in a bank and have such a bad ability to see risk & perform what if scenarios?

As an earlier poster pointed out.
For a 1.5 mil loan @ 2.25% you will be paying 7k / month

What do you plan to eat? Hope you don't need any electricity at home.
You have zero margin for even living, never mind anything goes wrong - which it will.

Do you think 2.25% is historical average interest rate?
If it goes to 4% which is quite normal you will be in negative territory.

You already have 450k loan. Altogether almost 2mil on only 7-8k.

Don't take this as being rude but as Stalingrad said earlier, you are boxing out of your weight.

Anyhow you will be saved from Bedok Resevoir as no bank in their right mind would lend you that much money.
10-02-12, 15:57
gn108

Didn't mean if present players make or lose.
Just saying each generation grew up framing different property investment mindset on quantum/loan period etc.

Only thing remaining the same is that when you're paying - you say 'when can I finish paying this off'...

Quote:

Originally Posted by 5577

If interest rate remains this low for many years to come, who would dare to laugh at you for taking a loan with long tenure?!?!?! :D :D
10-02-12, 16:00
DC33_2008

Certainly agree with you. Street smart also need to be financially smart.

Quote:

Originally Posted by 5577

I think, the word should be 'street smart'. :D

You will find that a number of successful people from humble background. Some do not even have much education. They have little or even nothing in their pocket when they start off.

However, because they are street smart, they know how to grab the opportunity when it presenst itself. Education only gives you a better headstart. It doesn't gaurantee success or $$$.
10-02-12, 16:02
chiaberry

Quote:

Originally Posted by gn108

And the generation before us laugh at us when WE did a >20 year loan.
Each cohort pushes the envelop ...causing the asset price to inflate.

I was 31 when when I took a 600k loan (combined was above HDB ceiling) and was a nervous for years!

I was already 39 and I was also nervous taking the loan for a similar amount.

Generation before us.....I remember my dad was complaining that his mother (my grandma) was asking him to pay a lot to buy over her house (7000 sq ft bungalow plot in Upper Paya Lebar/Bartley Road junction area). But now even in that location, it is now worth some million $$$?

Now I can't afford to buy over his house.....:( Still living with the in-laws next to the jungle in Upp Thomson where SingTel reception is so bad and only the monkeys come to visit us.
10-02-12, 16:03
DC33_2008

Good times, passive part of the rental income (nett income) can be considered as household income. But bad times, this may disappear. Safer to rule them out but rely on basic monthly household income. Bonus can also go in bad times.

Quote:

Originally Posted by price

If you've got a few rental properties, does that counts to your household income? :millie: :millie: :millie:

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