Pockets of Opportunity

Understanding financial prudence will ensure a successful transaction in private properties. Since the introduction of the new cooling measures of Mortgage Service Ratio (MSR) and Total Debt to Service Ratio (TDSR), there has never been more important than now to know how much a buyer can loan from local financial institutions. A buyer must be able to identify how much he can loan based on his salary so that he can know how much he can afford to ensure a successful property transaction.
The latest round of cooling measures introduced by the Monetary Authority of Singapore involves around the MSR and the TDSR. The very first step is to check the MSR. If MSR fails, then there is no need to even check for the TDSR. However, the ratio of Singaporean buyers who have failed the MSR is very little as banks have their own MSR ratio even before the cooling measures were announced.
With the new TDSR and MSR in place, the obvious selection for opportunity in the real estate market seems to be the Executive Condominium (EC). ECs are a hybrid between private condos and HDB built by private developers. They are open only to Singaporeans and Permanent Residents.
ECs seems to be very popular nowadays as TDSR does not apply to ECs. In another words, a buyer who has a HDB property loan and subsequently purchase a EC will have his TDSR calculated based on the EC. The HDB loan is not taken into consideration as the government assumes that the buyer will sell of the HDB flat upon completion of the EC.
The Hillford Condo maybe able to present an opportunity to own a HDB and a private property as the price of The Hillford Condo is very affordable due to its 60 years old tenure nature. Therefore, a buyer with an average income might be able to pay his HDB loan as well as The Hillford mortgage loan and still fall within range of the TDSR. This opportunity awaits the buyer.

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