Analyse the following: (a) Mr Tan, 42, is thinking of upgrading his residence for his family...

 

 

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Analyse the following: (a) Mr Tan, 42, is thinking of upgrading his residence for his family of four. He earns $25,000 monthly as a businessman. There are two properties he is considering; one in prime district valued at $2.5 million and another non-prime unit valued at $1.8 million. Calculate the down- payments and monthly instalments for both the properties under what the two (2) banks offer. Fill in the table below. Prime property Down-payment Monthly instalment Non-prime property Down-payment Monthly instalment SBD Bank $ BOU Bank $ (b) Given that the property market has turned buoyant, a new rule has been imposed on all new mortgage loans. The Total Debt Servicing Ratio (TDSR) shall not exceed 60% on a borrower's monthly income. The rule includes all monthly outstanding. As a businessman, Mr Tan has average credit card debt of $7,500 and a car loan of $2,100 monthly. Based on this new criterion, compute the TDSR based on Mr Tan's options and determine which property and bank loan can he take up? (c) If Mr Tan really aspires to upgrade to a prime property, suggest three (3) ways so that he may qualify for a loan. (d) If Mr Tan chooses to maintain his lifestyle but still aspires to upgrade to a prime property, how much must he minimally top up on his down-payment and with which bank from part (a) to secure his dream home? (e) In business, opportunities may arise that warrant liquidity at short notice. Based on this need, which bank will Mr Tan prefer to borrow from? Please DO NOT consider this point in the previous parts of this question. No calculations are required. Loan Quantum Tenor of loan SBD Bank Premier Home Loan Up to 70% of valuation 65 minus borrower's age Monthly rest Interest rate Owner occupation 2.0% p.a. 2.5% p.a. Rental purpose Early redemption penalty Yes, if redeemed within 1 year BOU Bank Easy Home Loan Up to 80% of valuation 70 minus borrower's age Monthly rest 1.5% p.a. 1.8% p.a. Yes, if redeemed within 3 years Analyse the following: (a) Mr Tan, 42, is thinking of upgrading his residence for his family of four. He earns $25,000 monthly as a businessman. There are two properties he is considering; one in prime district valued at $2.5 million and another non-prime unit valued at $1.8 million. Calculate the down- payments and monthly instalments for both the properties under what the two (2) banks offer. Fill in the table below. Prime property Down-payment Monthly instalment Non-prime property Down-payment Monthly instalment SBD Bank $ BOU Bank $ (b) Given that the property market has turned buoyant, a new rule has been imposed on all new mortgage loans. The Total Debt Servicing Ratio (TDSR) shall not exceed 60% on a borrower's monthly income. The rule includes all monthly outstanding. As a businessman, Mr Tan has average credit card debt of $7,500 and a car loan of $2,100 monthly. Based on this new criterion, compute the TDSR based on Mr Tan's options and determine which property and bank loan can he take up? (c) If Mr Tan really aspires to upgrade to a prime property, suggest three (3) ways so that he may qualify for a loan. (d) If Mr Tan chooses to maintain his lifestyle but still aspires to upgrade to a prime property, how much must he minimally top up on his down-payment and with which bank from part (a) to secure his dream home? (e) In business, opportunities may arise that warrant liquidity at short notice. Based on this need, which bank will Mr Tan prefer to borrow from? Please DO NOT consider this point in the previous parts of this question. No calculations are required. Loan Quantum Tenor of loan SBD Bank Premier Home Loan Up to 70% of valuation 65 minus borrower's age Monthly rest Interest rate Owner occupation 2.0% p.a. 2.5% p.a. Rental purpose Early redemption penalty Yes, if redeemed within 1 year BOU Bank Easy Home Loan Up to 80% of valuation 70 minus borrower's age Monthly rest 1.5% p.a. 1.8% p.a. Yes, if redeemed within 3 years