Issue 293

Copyright 2011-2016 www.propwise.sg. All Rights Reserved.

CONTENTS
p2

FROM THE

EDITOR

5 Reasons Why You Cant Get a Mortgage

Welcome to the 293th edition of the

Singapore Property Weekly.

Loan and How to Fix Them

Hope you like it!

p8

Resale Property Transactions

Mr. Propwise

(December 27 December 30)

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SINGAPORE PROPERTY WEEKLY Issue 293

5 Reasons Why You Cant Get a Mortgage Loan

and How to Fix Them
By Property Soul (guest contributor)

A blog reader shared with me that he had put

down a deposit to buy a property for
investment. When he applied for a housing
loan, to his big surprise, the bank told him
that he couldnt pass the TDSR (Total Debt
Servicing Ratio) test.

I thought I was financially sound. How could I

possibly fail the stress test?
Another reader was checking with the bank to
refinance his existing mortgage when the 3month Sibor went up sharply in the middle of
November. He had the same fate when he
was informed of his failure to meet the 60
percent TDSR threshold.
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SINGAPORE PROPERTY WEEKLY Issue 293

When I applied for my housing loan four
years ago, it was a breeze to get the bank
approval. So imagine the shock I got when
they couldnt help me to refinance.
To get the answers straight from a mortgage
expert, I talked to Wayne Quek, Director of
mortgage consultancy firm Home Loan Whiz
and founder of online financial comparison
site Easyrates.sg, who sees applicants fail
the TDSR test almost every day!

According to Wayne, you can fail the TDSR

test in five ways:
Reason #1 You have bad credit.
The main reason why loan applicants are
rejected is due to bad credit.
You know what it means. You have that bad
habit of not paying your credit card bills on
time. You tend to default on your payments.
It is payback time now when you go to the
bank to ask for a housing loan.
Solution: Start with a clean slate today
and clean up your act. Banks usually need
one year of clean repayment history to
consider lending you money again.
Reason #2 You have a legal problem.
Banks cant approve your mortgage
application if you have litigation issues.

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SINGAPORE PROPERTY WEEKLY Issue 293

Ask yourself whether you have recently run
into legal troubles or there is any pending
lawsuit against you.

Similarly, your application will definitely be

thrown out if you are still an undischarged
bankrupt.
Solution: Wait till the dust has settled and
apply again. Discharged bankrupts will
have to wait for five years before most
banks are willing to consider approving
their loans.

Reason #3 You have too much liability or

too little income
The TDSR framework is calculated as a ratio
of how much monthly liability you are paying
over how much income you are earning. If
you are a middle-aged white-collar worker
with a sizable car loan and personal loan, you
can fail your TDSR test because you have too
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much liability.
Another common problem is providing banks
with credit card statements. If you are unable
to provide the bank with your latest credit
card statement, they will add a huge chunk of
your credit limit into the TDSR calculation.
You are likely to fail TDSR too if you belong to
the lower income family category and need a
loan to buy an HDB or EC flat. Take note that
the MSR (Mortgage Service Ratio) is twice as
stringent as TDSR which makes it even more
difficult for you to obtain the desired loan
quantum.
Solution: The short loan tenure of car
loans and personal loans means high
monthly repayments. Lower your liability
by paying your outstanding car loan and
personal loan as much as you can or you
will have to settle with a lower loan
quantum.
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SINGAPORE PROPERTY WEEKLY Issue 293

You can also increase the home loan
amount by pledging your liquid assets
such as bank deposits or stocks.
Reason #4 You are self-employed or inbetween jobs
It is hard for the self-employed to pass TDSR,
especially those who are at the stage of
starting their own business. Banks assess
TDSR only based on your latest IRAS Notice
of Assessment. For instance, if you set up
your company in January 2017, your first tax
assessment will only arrive in May 2018. You
will fail TDSR in between because banks
cannot recognise any income you made.
Some business owners tend to declare very
low income to maximize their tax savings
which affects the results of their TDSR test.
If you are in between jobs, or on sabbatical
with no income, you are also likely to fail the
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TDSR test.
Solution: Consider buying or refinancing
your property before you leave a job.
Similarly, buy or refinance your property
before you venture out on your own.
Always declare all the income generated
from your business and pay the
corresponding taxes.
Reason #5 You are a first-time or
multiple-property investor
If you are a first-time investor with an existing
mortgage buying a second property, you are
only looking at a maximum of 50 percent
loan-to-value. Also, your existing housing loan
instalments will be added to liabilities in the
TDSR calculation.
If you own multiple properties, banks
recognize only 70 percent of your rental
income (after a 30 percent haircut).
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SINGAPORE PROPERTY WEEKLY Issue 293

You will also need to show at least 6 months
remaining lease in the tenancy agreement.
Solution: For first-time investors, consider
decoupling if your current property is
owned by more than one person. This will
free you from liability of your existing
mortgage, avoid payment of Additional
Buyer Stamp Duty, and you will be able to
borrow 80 percent loan-to-value for the
investment property. For multiple-property
investors, declare other forms of liquid
assets and pledge them with the banks to
increase your income. Renew the tenancy
agreement with your tenants well in
advance before it expires.
Other useful tips to pass the TDSR test
Mortgage expert Wayne Quek was generous
enough to reveal some little-known tips to
help us tackle the TDSR restrictions.
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1. Although existing home owners are

exempted from TDSR when refinancing from
September 1 2016, it doesnt help to increase
your chances of getting approval. Most banks
still have their internal guidelines which
mirrors the MAS TDSR closely. Finding a
good banker makes all the difference. His/her
ability to put up the case to internal credit can
result in a much higher chance of approval.
2. Paying off your personal loan and car loan
can help to increase the amount of your
housing loan significantly. Avoid spending on
multiple credit cards as this will also affect
your TDSR. Speak to a mortgage consultant
or a banker to get some advice.
3. Even if you fail the TDSR test, your loan
can still be approved. You just have to settle
for a loan amount lower than what you asked
for. Consider pledging or showing assets to
the bank to increase the loan amount.
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SINGAPORE PROPERTY WEEKLY Issue 293

4. You will fail the TDSR test again if you
apply to multiple banks without knowing your
issue. A good mortgage consultant can help
you to assess your situation and work out a
strategy for you to get the loan approved.
By guest contributor Property Soul, a
successful property investor, blogger, and
author of the No B.S. Guide to Property
Investment.

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SINGAPORE PROPERTY WEEKLY Issue 293

Non-Landed Residential Resale Property Transactions for the Week of Dec 27 Dec 30

Postal
District
1
4
4
5
9
9
9
9
9
9
9
9
9
10
10
10
10
11
11
12
12
14
15
15

Project Name
ONE SHENTON
SEASCAPE
HARBOURLIGHTS
DOVER PARKVIEW
OUE TWIN PEAKS
OUE TWIN PEAKS
OUE TWIN PEAKS
OUE TWIN PEAKS
RIVERGATE
SOPHIA RESIDENCE
THE PIER AT ROBERTSON
LUCKY PLAZA
PACIFIC MANSION
TOMLINSON HEIGHTS
GRAMERCY PARK
TANGLIN RESIDENCES
GALLOP GABLES
L'VIV
AMARYLLIS VILLE
THE TIER
RIVERSIDE MELODIES
VACANZA @ EAST
THE SEA VIEW
HAIG COURT

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Area
(sqft)
1,604
2,174
829
936
1,604
1,055
1,399
549
1,550
614
1,023
1,550
1,528
4,047
2,207
2,486
2,766
614
1,238
538
1,076
484
1,216
1,550

Transacted
Price ($)
2,502,000
4,250,000
1,300,000
1,028,000
4,830,000
2,858,000
3,775,200
1,390,000
3,000,000
1,157,000
1,708,000
2,230,000
1,818,000
11,100,000
5,912,920
4,300,000
4,400,000
1,150,000
1,580,000
728,000
1,366,000
630,000
1,840,000
1,820,000

Price
Tenure
($ psf)
1,560
99
1,955
99
1,568 FH
1,098
99
3,012
99
2,709
99
2,698
99
2,532
99
1,935 FH
1,886 FH
1,670 FH
1,439 FH
1,189 FH
2,743 FH
2,680 FH
1,729 FH
1,591 FH
1,874 FH
1,276
99
1,353 FH
1,269 FH
1,301 FH
1,513 FH
1,174 FH

Postal
District
15
15
15
15
16
16
18
18
18
19
20
22
23
23

Area
(sqft)
COSTA RHU
2,056
HAIG 162
861
SPRING @ LANGSAT
1,141
MANDARIN GARDEN CONDOMINIUM 1,528
THE BAYCOURT
1,238
BAYSHORE PARK
1,173
WATERVIEW
786
SEASTRAND
883
LIVIA
1,539
PIN MANSIONS
1,249
THOMSON VIEW CONDOMINIUM
1,313
PARK VIEW MANSION
1,313
THE WARREN
1,259
MI CASA
1,238
Project Name

Transacted
Price ($)
2,245,000
930,000
1,100,000
1,350,000
1,220,000
1,030,000
800,000
799,888
1,160,000
1,240,000
1,200,000
790,000
1,025,000
1,000,000

Price
Tenure
($ psf)
1,092
99
1,080
FH
964
FH
883
99
986
FH
878
99
1,018
99
906
99
754
99
993
FH
914
99
602
99
814
99
808
99

NOTE: This data only covers non-landed residential resale property

transactions with caveats lodged with the Singapore Land Authority.
Typically, caveats are lodged at least 2-3 weeks after a purchaser
signs an OTP, hence the lagged nature of the data.

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