Since govt has implemented the above, it seems that most of us depends on the BANK's BLACKBOX appraisal whether this buyer has been approved or disapproved.

well if someone can share some basic formulas, that users can punch in and do a mini projections.

Since govt has implemented the above, it seems that most of us depends on the BANK's BLACKBOX appraisal whether this buyer has been approved or disapproved.

well if someone can share some basic formulas, that users can punch in and do a mini projections.

Total Debt Service Ratio, monthly = (annual total debt commitments)/12 then divide by (Total annual net income)/12.

This explains why 'self-employed', usually, hard to get loan approval.

Banks give 'umbrella' in 'sunny days'. No 'umbrella' in 'rainy days'.

Standby 'umbrallassss' in both days.

4 major assets classes for Personal Wealth Management:

- Cash - current, liquid, anytime.

- Stocks/FDs - steady dividend or interest inflows

- Insurance- life, medical, ilp, retirement. For what, you by now should know.

- Property.

Do you have above or in progress?

this formula u get from bank ? Total Debt Service Ratio, monthly = (annual total debt commitments)/12 then divide by (Total annual net income)/12

say I have only house loan of 360000 owing / 12 = 30,000 per month

eg household income is 200k /12 = 16, 666 per month. (exclude property, 0 bonuses, other wealth, etc)

30,000 / 16,666 = 1.8 ==> what does it mean ?

this formula u get from bank ? Total Debt Service Ratio, monthly = (annual total debt commitments)/12 then divide by (Total annual net income)/12

say I have only house loan of 360000 owing / 12 = 30,000 per month

eg household income is 200k /12 = 16, 666 per month. (exclude property, 0 bonuses, other wealth, etc)

30,000 / 16,666 = 1.8 ==> what does it mean ?

TDSR is calculated based on: your (monthly instalment) divided by (monthly gross income).

According to the new guideline, banks will only lend if the TDSR < 60%.

Monthly instalment shd include instalment for housing loan, car loan, personal loan, credit card outstanding etc.

For monthly income, both fixed and variable income will be considered. But for variable income, banks are not considering 100%.

Based on your example, with a monthly instalment at 180% of monthly income, the person's the monthly cashflow is negative. This means this person will not qualify for any new bank loan. Is this what you are asking?

monthly installment refers to HOUSEHOLD (Both husband n wife) or INDIVIDUAL ?

Gross income refers to TOTAL income of both husband n wife ? Or individual ?

monthly installment refers to HOUSEHOLD (Both husband n wife) or INDIVIDUAL ?

Gross income refers to TOTAL income of both husband n wife ? Or individual ?

If husband and wife are joint-borrowers, TDSR will be based on combined instalment and combined income.

say I have only house loan of 360000 owing / 12 = 30,000 per month

eg household income is 200k /12 = 16, 666 per month. (exclude property, 0 bonuses, other wealth, etc)

30,000 / 16,666 = 1.8 ==> what does it mean ?

Cash inflow vs cash outflow concept.

Always subjective.

Many costs(expenses) can don't let banks (lender) know. They have no ways to track.

Show only your 'restaurant', lock your 'kitchen' when they visit you.

You kidding? Outflow 30k pm, inflow only 16.7k pm?

You run out of blood in no time!

Ratio explains the 'relationship' of the variables being compared.

There are many other things not in the picture which affect these variables.

monthly installment refers to HOUSEHOLD (Both husband n wife) or INDIVIDUAL ?

Gross income refers to TOTAL income of both husband n wife ? Or individual ?

Both u attended U yet don't know this?

Cash inflow vs cash outflow concept.

Always subjective.

Many costs(expenses) can don't let banks (lender) know. They have no ways to track.

Show only your 'restaurant', lock your 'kitchen' when they visit you.

You kidding? Outflow 30k pm, inflow only 16.7k pm?

You run out of blood in no time!

Ratio explains the 'relationship' of the variables being compared.

There are many other things not in the picture which affect these variables.

you got it wrong, I am asking for the formula - I divided what I owe by 12 MONTHS..not 12 years ... can you give an example of the right formula ?

Cash inflow vs cash outflow concept.

Always subjective.

Many costs(expenses) can don't let banks (lender) know. They have no ways to track.

Show only your 'restaurant', lock your 'kitchen' when they visit you.

You kidding? Outflow 30k pm, inflow only 16.7k pm?

You run out of blood in no time!

Ratio explains the 'relationship' of the variables being compared.

There are many other things not in the picture which affect these variables.

you got it wrong, I am asking for the formula - I divided what I owe by 12 MONTHS..not 12 years ... can you give an example of the right formula ?

How does the bank interpret the ratio ?

Take it that I do not have car , credit card, only pure loan of 300k owing.

you got it wrong, I am asking for the formula - I divided what I owe by 12 MONTHS..not 12 years ... can you give an example of the right formula ?

How does the bank interpret the ratio ?

Take it that I do not have car , credit card, only pure loan of 300k owing.

Look at formular carefully: it is actually

monthly OUT/monthly IN, but take {'yearly out'/12} / {'yearly in'/12}. It invovles 'commitmments' - very subjective.

According to gov's 'self-explanatory': a ratio of 0.35 to 0.4 is considered 'safe'.

Banks are interested in your evidence of 'INCOME', not so much so on 'outflowsss' - they have no ways to know the true story of your 'outflowsssss'.

Unless you show/prove you have 'reserve' , that is another story.

The ratio is very 'static'. Life is dynamic.