Bank loan

[Werther]

Yesterday, at a friend's house gathering, he wanted to put option money for one property in the east, to buy for investment, after checking with bank, was told the bank has reached limit for investment loan, cannot loan unless for own stay, what's is the rationale?

[FREDDIE]

Yesterday, at a friend's house gathering, he wanted to put option money for one property in the east, to buy for investment, after checking with bank, was told the bank has reached limit for investment loan, cannot loan unless for own stay, what's is the rationale?

go for other bank... So many banks around.

[leesg123]

Tell your fren dont over commit as wat the first bank has hinted.

[Cyberknight]

Go to UOB. Caveat emptor. Top up also very fast.. repossess also very fast.

[mcmlxxvi]

Means ur fren is at risk of overleverage.

Try a few other banks.

If the result is similar, he may wanna consider postponing the purchase.

[Werther]

Thanks for your input.

But this is my friend 1st investment property. The currently home is fully paid up. Moreover, he has fund $$ in this bank, now collecting $1500 interests a month from this bank, I am not sure what is the quantum though.

Now it is the bank that has reached its investment loan quota, meaning many people taking up investment loan now...wonder what's up...

[hopeful]

Thanks for your input.

But this is my friend 1st investment property. The currently home is fully paid up. Moreover, he has fund $$ in this bank, now collecting $1500 interests a month from this bank, I am not sure what is the quantum though.

Now it is the bank that has reached its investment loan quota, meaning many people taking up investment loan now...wonder what's up...

easy to calculate, total interest per year is 18000
if 1%, his money in the bank is 1.8mil
2%, 900k
3%, 600k
4%, 450k.

[Laguna]

This is the first time I heard of this.

As far as I can recall, there are two tiers of capital reserve requirements to be met by the banks under the MAS regulations.

The FD rate offers by the local banks is still very low, whereas, non-local banks are much higher.

So I supposed your friend is approaching a non-local bank.

If need to, u can PM me for assistance.

[Werther]

This is the first time I heard of this.

As far as I can recall, there are two tiers of capital reserve requirements to be met by the banks under the MAS regulations.

The FD rate offers by the local banks is still very low, whereas, non-local banks are much higher.

So I supposed your friend is approaching a non-local bank.

If need to, u can PM me for assistance.

Hi Laguna

Thanks for your analysis. Just spoke to him and yes, it is a non local bank.

[Shanhz]

in the application form, if you tick own-stay, loan will be approved.
if you tick investment, questions many many.
(of course assuming DSR etc is within guidelines)

anecdotal evidence. dun quote me.

[Cyberknight]

Bank Is governed by MAS S35, meaning at any one point in time, not more than 35% of the total loan given out by the banks are for investments in property or property developments.

Just go to the local banks lah whom have a much bigger loan book than e foreign banks... And the cheapest rates are from local banks ...

[Werther]

Thanks all for your input. Cheers.