I can totally understand where youre coming from Celeste, I was as clueless as you too! But thank goodness today God placed a good real estate agent in my life (finally)! I was visiting the Kent Ridge Hill Residences showflat with my friend and I was just curious so I asked him about it.
Wow, I was impressed, he was so patient and friendly. He took 20 minutes to explain, making sure i understood everything. Even to help me calculate my affordability and financial boundaries. Really thankful today for his explanation...though I was just kaypo! hahah.
He even has a website, which he showed us, you should check it out. First time seeing such a detailed site.
Mortgage servicing ratio (MSR) refers to the portion of a borrower’s gross monthly income that goes towards repaying all property loans, including the loan being applied for.
MSR is capped at 30% of a borrower's gross monthly income.
It applies only to housing loans for the purchase of an HDB flat or an executive condominium bought directly from a developer. Calculating MSR
When calculating MSR, FIs are to take into consideration:
All the borrower’s property loans.
At least 20% of the monthly debt obligation for any property loan where the borrower is a guarantor.
To calculate a borrower’s MSR, use the following formula:
(Monthly repayment instalments for all property loans / Gross monthly Income) x 100% ≤ 30% TDSR Rules
Total debt servicing ratio (TDSR) refers to the portion of a borrower’s gross monthly income that goes towards repaying the monthly debt obligations, including the loan being applied for.
A borrower's TDSR should be less than or equal to 60%
Extracted from MAS website