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Thread: Biggest loan you make in yuor life before?

  1. #91
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    My friend, you must learn about leveraging and take calculated risk. Always have fall back plan.
    Quote Originally Posted by chiaberry
    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.

  2. #92
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    Yup we probably same cohort (+/- 5 yrs even).

    My parent bought 4000 land detached house in D15 for $27,000 and took him 15 years to pay off (single income). And yet my mum complained about that.

    Now of course salary is higher - but the asset is much more. Solution? Increase the loan and loan period. Easy....except for the mortgagees.

    Quote Originally Posted by chiaberry
    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.

  3. #93
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    Quote Originally Posted by DC33_2008
    My friend, you must learn about leveraging and take calculated risk. Always have fall back plan.
    That's funny. I bought a few more properties along the way after that and my boss was telling me I was over-leveraged. But all except my last 2 purchases were for rentals.....and the rentals can more or less cover the repayments now that the interest rates are down so I suppose it should be OK.

  4. #94
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    Quote Originally Posted by 5577
    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
    Agreed Agreed!

  5. #95
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    Quote Originally Posted by gn108
    Only thing remaining the same is that when you're paying - you say 'when can I finish paying this off'...
    I agree that the roof over our heads should ideally be fully paid in reasonable timeframe. However, I have a different perspective when investing in property.

    For investment properties, I don't really care if the loan tenure is long. If the capital appreciation is high enough for me to reap a good net profit after a few years, I will sell off and settle the loan. Then I will enjoy myself with a fraction of the $$$ and use the rest for more investments.

    "I came to this world with nothing.
    I leave this world with nothing." (dunno who say one. )

    However, nothing is said about enjoying life to the fullest in between the two statements above.

  6. #96
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    ysyap,

    Hopefully you already have a 3 room flat within your investment portfolio then... with the latest CM, pte ppty owner cannot buy hdb already....

    But then again, they may change the rules later when situation changes!!!!

  7. #97
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    Quote Originally Posted by gn108
    Yup we probably same cohort (+/- 5 yrs even).

    My parent bought 4000 land detached house in D15 for $27,000 and took him 15 years to pay off (single income). And yet my mum complained about that.

    Now of course salary is higher - but the asset is much more. Solution? Increase the loan and loan period. Easy....except for the mortgagees.
    LOL YES very likely we are in the same cohort. I *think* my dad paid around $20,000 or slightly less for his place. Inflation is scary right?

  8. #98
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    I have used rental income to shorten the capital loan repayment by more than half for my investment property but not now. Happy as long as tenant is helping me to pay loan mortgage and passive income after deducting maintenance fee, loan interest, property tax, etc.
    Quote Originally Posted by chiaberry
    That's funny. I bought a few more properties along the way after that and my boss was telling me I was over-leveraged. But all except my last 2 purchases were for rentals.....and the rentals can more or less cover the repayments now that the interest rates are down so I suppose it should be OK.

  9. #99
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    Same here. My dad pays $10,000.
    Quote Originally Posted by chiaberry
    LOL YES very likely we are in the same cohort. I *think* my dad paid around $20,000 or slightly less for his place. Inflation is scary right?

  10. #100
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    Quote Originally Posted by 5577
    ysyap,

    Hopefully you already have a 3 room flat within your investment portfolio then... with the latest CM, pte ppty owner cannot buy hdb already....

    But then again, they may change the rules later when situation changes!!!!
    Me no 3 room flat... me have EA...

  11. #101
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    BTW what is EA?
    Quote Originally Posted by ysyap
    Me no 3 room flat... me have EA...

  12. #102
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    Quote Originally Posted by DC33_2008
    BTW what is EA?
    EA = executive apartment. The big type of HDB about 1400 sq feet.
    It is like the size of a mansionette but is one level instead of duplex.

    Can look at HDB website:
    http://www.hdb.gov.sg/fi10/fi10321p....c?OpenDocument

  13. #103
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    teddybear is offline Global recession is coming....
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    $10k pm gross household income if got savings may be can loan $1.5m? It is all about having that buffer cash to tie over when the rough comes. But yes, property has been the easiest investment so far, don't have to think so much as compared to investing in shares & bonds as don't need to worry the company got accounting fraud, go bankcrupt, CEO disappear with company's cash, company business die, etc! This is especially true in Singapore where so many of those companies have folded or going to die of above reasons: Eg Citiraya (yes yes, not just China-based companies, we have real local ones), Informatics, China Enersave, China Sky, China Print, FibreChem, CAO, etc!

    Quote Originally Posted by yowetan
    I have colleagues and friends who goes for million valued housing spree with household income of 10k.

    I believe they must have done their calculation.
    Last edited by teddybear; 10-02-12 at 20:38.

  14. #104
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    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.
    Me too... loan is like 15% of household income. But with kids and old parents to feed, can only save little. Really depends on profile... number of kids and how old.g

  15. #105
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    Quote Originally Posted by buttercarp
    EA = executive apartment. The big type of HDB about 1400 sq feet.
    It is like the size of a mansionette but is one level instead of duplex.

    Can look at HDB website:
    http://www.hdb.gov.sg/fi10/fi10321p....c?OpenDocument
    Thx for replying...
    Last edited by ysyap; 10-02-12 at 21:01.

  16. #106
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    Quote Originally Posted by DC33_2008
    My friend, you must learn about leveraging and take calculated risk. Always have fall back plan.
    Yah.... like got rich parents

  17. #107
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    Everyone here seems to grow up in a upper middle income family. Parents all got landed.

  18. #108
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    I stay HDB one leh... Now in biggest debts of my life so far...

  19. #109
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    IMHO, this is borderline financing. I am not sure if these people seriously sat down to do their calculations, I wonder.

    Very little room for error and downturn. There are many chasing the property dream and driving the demand. To me this is not a good sign in terms of market stability.

    Quote Originally Posted by yowetan
    I have colleagues and friends who goes for million valued housing spree with household income of 10k.

    I believe they must have done their calculation.

  20. #110
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    1988 Loan $ 83,000 for 4 room HDB (Kim Keat Ave) First cherry.
    1995 sell $285,000 profit $180,000.
    1996 move into 5 room HDB loan $200,000. (Balam Road) Second Cherry.
    2006 loan $428,000 for 2 Bedroom @ SouthBank.($535,000)
    2011 loan $660,000 from SouthBank.(Cash out)
    2011 loan $750,000 for 3 Bedroom PH @ Terrasse.($1,305,800)

    Total loan about $1,800,000.

    Monthly income $2,400. Rental income $2,400+$4,100=$6,500.

    Mortgage = $2,329.14(660,000)+$1,475.76(428,000)=$3,804.9 cash.

    Buy Low Sell High.

  21. #111
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    Quote Originally Posted by Arcachon
    1988 Loan $ 83,000 for 4 room HDB (Kim Keat Ave) First cherry.
    1995 sell $285,000 profit $180,000.
    1996 move into 5 room HDB loan $200,000. (Balam Road) Second Cherry.
    2006 loan $428,000 for 2 Bedroom @ SouthBank.($535,000)
    2011 loan $660,000 from SouthBank.(Cash out)
    2011 loan $750,000 for 3 Bedroom PH @ Terrasse.($1,305,800)

    Total loan about $1,800,000.

    Monthly income $2,400. Rental income $2,400+$4,100=$6,500.

    Mortgage = $2,329.14(660,000)+$1,475.76(428,000)=$3,804.9 cash.

    Buy Low Sell High.

    Do you guys think I am financially overstretched?

    Existing loan : 2 mil
    Estimated properties' value : 3.6 mil
    Combined gross income : 13k monthly
    Rental income : 7 k monthly
    Monthly instalment est : 6 k monthly
    Cpf used to service instalment : 2 k
    Cash used to service instalment : 4 k

    Any friendly advice on whether I can hold for the long term? Many thanks first!

  22. #112
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    Quote Originally Posted by edwinleeap
    Do you guys think I am financially overstretched?

    Existing loan : 2 mil
    Estimated properties' value : 3.6 mil
    Combined gross income : 13k monthly
    Rental income : 7 k monthly
    Monthly instalment est : 6 k monthly
    Cpf used to service instalment : 2 k
    Cash used to service instalment : 4 k

    Any friendly advice on whether I can hold for the long term? Many thanks first!
    Think you are quite ok but have at least 4 months worth of monthly instalment in cash in case your unit cannot find new tenants during transitions. Your position is actually quite enviable by many... Cheers!

  23. #113
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    Quote Originally Posted by edwinleeap
    Do you guys think I am financially overstretched?

    Existing loan : 2 mil
    Estimated properties' value : 3.6 mil
    Combined gross income : 13k monthly
    Rental income : 7 k monthly
    Monthly instalment est : 6 k monthly
    Cpf used to service instalment : 2 k
    Cash used to service instalment : 4 k

    Any friendly advice on whether I can hold for the long term? Many thanks first!
    If interest rates go up, likely your instalment will be slightly more than rental income (based on my assumption that rental rates either hold or drop due to large supplies). If you can live with that, you are quite safe.

  24. #114
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    Quote Originally Posted by howgozit
    IMHO, this is borderline financing. I am not sure if these people seriously sat down to do their calculations, I wonder.

    Very little room for error and downturn. There are many chasing the property dream and driving the demand. To me this is not a good sign in terms of market stability.
    It is becaue for new launches they only need to put down 20% down-payment. And it's progressive payments. They are hoping that by the time the project has TOP, their financial situation will have improved to be able to service the loan comfortably (or else their MOP for HDB is up and they can rent it out to supplement the loan repayments).

    I think govt need to do something about cooling down the new launches by increasing the down-payment. Or else the new launch market will be a bubble and the resale market is dead. That is not good for the health of the property market in Singapore.

  25. #115
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    Quote Originally Posted by edwinleeap
    Do you guys think I am financially overstretched?

    Existing loan : 2 mil
    Estimated properties' value : 3.6 mil
    Combined gross income : 13k monthly
    Rental income : 7 k monthly
    Monthly instalment est : 6 k monthly
    Cpf used to service instalment : 2 k
    Cash used to service instalment : 4 k

    Any friendly advice on whether I can hold for the long term? Many thanks first!
    Should be OK unless you have 2 incomes to service the loan and one gets retrenched or wants to take time off for personal reasons. Then it will be tight.

    Is that a 30 year loan? You will be a slave to your loan for most of your working life and better hope that you are able to keep your job.

  26. #116
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    Not sure how much cash or other investment that you have. Can consider partial repayment when interest rates goes up or requires to top up if really properties drop substantially like what Mr B is predicting. You should work out the nett monthly income (i.e. monthly rental income - monthly maintenance - monthly mortgage - monthly property tax, other miscellaneous fee.)
    Quote Originally Posted by edwinleeap
    Do you guys think I am financially overstretched?

    Existing loan : 2 mil
    Estimated properties' value : 3.6 mil
    Combined gross income : 13k monthly
    Rental income : 7 k monthly
    Monthly instalment est : 6 k monthly
    Cpf used to service instalment : 2 k
    Cash used to service instalment : 4 k

    Any friendly advice on whether I can hold for the long term? Many thanks first!

  27. #117
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    Quote Originally Posted by edwinleeap
    Do you guys think I am financially overstretched?

    Existing loan : 2 mil
    Estimated properties' value : 3.6 mil
    Combined gross income : 13k monthly
    Rental income : 7 k monthly
    Monthly instalment est : 6 k monthly
    Cpf used to service instalment : 2 k
    Cash used to service instalment : 4 k

    Any friendly advice on whether I can hold for the long term? Many thanks first!
    you are doing good...
    but if you want good karma do a bit for the less fortunate like charity work or donate....that way you will have ALL round protection....

  28. #118
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    TE=DC33_2008]Not sure how much cash or other investment that you have. Can consider partial repayment when interest rates goes up or requires to top up if really properties drop substantially like what Mr B is predicting. You should work out the nett monthly income (i.e. monthly rental income - monthly maintenance - monthly mortgage - monthly property tax, other miscellaneous fee.)[/QUOTE]

    Agree. There are certainly downside risks such as

    1. Lack of tenants
    2. Drop in valuation
    3. Interest rate hike
    4. Lose of job

    Selling one property during good times to reduce total loan quantum is a possibility. (Sure and stable, but not making use of leveraging)

    Continue to hold all properties, using rental income to reduce loan quantum and save up for new investments and make use of leveraging. (Risky but greater rewards)

    Sigh... decisions decisions!

  29. #119
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    [QUOTE=radha08]you are doing good...
    but if you want good karma do a bit for the less fortunate like charity work or donate....that way you will have ALL round protection....[/QUOTE

    Roger!

  30. #120
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    Quote Originally Posted by edwinleeap
    TE=DC33_2008]Not sure how much cash or other investment that you have. Can consider partial repayment when interest rates goes up or requires to top up if really properties drop substantially like what Mr B is predicting. You should work out the nett monthly income (i.e. monthly rental income - monthly maintenance - monthly mortgage - monthly property tax, other miscellaneous fee.)
    Agree. There are certainly downside risks such as

    1. Lack of tenants
    2. Drop in valuation
    3. Interest rate hike
    4. Lose of job

    Selling one property during good times to reduce total loan quantum is a possibility. (Sure and stable, but not making use of leveraging)

    Continue to hold all properties, using rental income to reduce loan quantum and save up for new investments and make use of leveraging. (Risky but greater rewards)

    Sigh... decisions decisions![/quote]

    but just to add unfortunately biggest threat to property investors in singapore is our good govt...they are the ones pulling the strings....who knows what they may or may not do next ur guess as good as mine...

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