Many people depend on dual income to calculate the affordability of their property purchase. This is highly risky as any one party may lose the income, causing financial difficulty. Read this article.
Tip: when you use dual income to calculate affordability, you should apply a discounting factor for the dual income. I suggest a discount of 30%. You should take only 70% of the dual income to calculate the amount of the property that you can afford to buy.
Tip: when you use dual income to calculate affordability, you should apply a discounting factor for the dual income. I suggest a discount of 30%. You should take only 70% of the dual income to calculate the amount of the property that you can afford to buy.
3 comments:
I certainly agree with this advice...better still just use "single" salary as the yardstick; this is due to over-leveraging on expensive properties these days on long mortgages and uncertain economic conditions and job opportunities...not forgetting income stagnation even if you are a PMET.
In Aug 2010, I posted in my blog this piece on "The Property Bubble & Investment Trap Part III - Certainty of Employment ?" just before PM Lee first talked about revising the income ceiling for BTO flats in his N Day Rally. It took the PAP Govt 1 year to implement the change.
I had explained to some who emailed to me why I wrote about the problem and just using the "$10K" salary as a check following THOMAS FRIEDMAN's article.
It is worth a re-visit.
Link :- http://de-leviathan.blogspot.com/2010/08/property-bubble-investment-trap-part.html
These young people want big big condo even they can't afford. They stretch to maximum. They hope to impress.
There is no urgency to get a new home
You already have a home.
You are not homeless.
You just got married and want your own home... be patient.
Dont buy a car, just because you had no choice and had to buy a home far away from town or your workplace.
Buy a home near Ang Moh Kio
Buy a home near Toa Payoh
Buy a home near Queenstown
Yes, its expensive. but you save on transport, travel time and
the value of your home does not drop so quickly or steeply. And you dont need a car.
The price of a home far away is usually cheaper, but you end up travelling long distances, get fed up and grumble and evetually buy a car.. that makes you in debt in 2 areas... both of which drops in value.
Think about it.
Post a Comment