I haven't been looking at properties for some time but i had a pleasant surprise when a friend told me that I could actually use my equity portfolio to 'increase' my gross monthly income so that i can borrow more for a property loan based on Total Debt Servicing Ratio (TDSR)
Examples of some eligible financial assets to 'increase' ones gross monthly income
Gold, unit trusts, structured deposits, stocks, debentures
If i pledge these financial assets to the bank, i could use 70% of its value to 'increase' my gross monthly income. However, if these are not pledged, i could only use 30% of its value.
Gross monthly income from eligible financial assets = (70% or 30% X eligible financial assets) divided by 48
Say for example, SGdividends happens to have $1 million worth of eligible financial assets.
Pledge to the bank
70% X $1 million = $700,000
'Increased' gross monthly income = $700,000/48 = $14,583.33
Do not pledge to the bank
30% X $1 million = $300,000
'Increased' gross monthly income = $300,000/48 = $6,250
Now, that's a lot of 'additional' gross monthly income. However, this is what the MAS guideline (MAS notice 645) allows and i have not verified how much more stringent the banks will be.
