Country A has the following countercyclical measures for all self-use residential properties: The maximum loan-to-value (LTV) ratio is 75% The maximum debt-servicing ratio (DSR) is 60%, and its corresponding stressed-DSR is 70% (assuming an increase of the mortgage rate by 220 basis points) Hadrian, aged 30, intends to purchase a two-bedroom flat in Country A for self-use. Hadrian's monthly gross income is $36,000. His monthly MPF contribution is $1,500. Since he does not have abundant cash for down payment, he plans to borrow as much as possible from bank. His other debt to be paid monthly is $3,500. The mortgage plan provided by Tiger Bank is H+1.7%, repayable in 30 years. The current HIBOR and Prime rates are l .12% and 5.06%, respectively. Hadrian is further advised by the real estate agent that the stamp duty for this two-bedroom flat is about $80,000, the property insurance is $4,800 a year, the monthly property management fee is S1,650, and the moving expense is $2,000. (a) List any TWQ possible main sources of money for a down payment. (4 marks) (b) Calculate Hadrian's maximum mortgage amounts using debt-servicing ratio (DSR) and stressed-DSR respectively. Evaluate whether these two mortgage amounts pass or fail the DSR and stressed-DSR requirements. marks (c) Based on your answer in (b), determine the amount of mortgage that Hadrian can borrow and calculate his total amount of interest. (6 marks) (d) Other than the mortgage monthly repayment, what is the total ongoing monthly housing expenses Hadrian is expected to spend on this two-bedroom flat, as a home-owner? Show all workings. (4 marks) Country A has the following countercyclical measures for all self-use residential properties: The maximum loan-to-value (LTV) ratio is 75% The maximum debt-servicing ratio (DSR) is 60%, and its corresponding stressed-DSR is 70% (assuming an increase of the mortgage rate by 220 basis points) Hadrian, aged 30, intends to purchase a two-bedroom flat in Country A for self-use. Hadrian's monthly gross income is $36,000. His monthly MPF contribution is $1,500. Since he does not have abundant cash for down payment, he plans to borrow as much as possible from bank. His other debt to be paid monthly is $3,500. The mortgage plan provided by Tiger Bank is H+1.7%, repayable in 30 years. The current HIBOR and Prime rates are l .12% and 5.06%, respectively. Hadrian is further advised by the real estate agent that the stamp duty for this two-bedroom flat is about $80,000, the property insurance is $4,800 a year, the monthly property management fee is S1,650, and the moving expense is $2,000. (a) List any TWQ possible main sources of money for a down payment. (4 marks) (b) Calculate Hadrian's maximum mortgage amounts using debt-servicing ratio (DSR) and stressed-DSR respectively. Evaluate whether these two mortgage amounts pass or fail the DSR and stressed-DSR requirements. marks (c) Based on your answer in (b), determine the amount of mortgage that Hadrian can borrow and calculate his total amount of interest. (6 marks) (d) Other than the mortgage monthly repayment, what is the total ongoing monthly housing expenses Hadrian is expected to spend on this two-bedroom flat, as a home-owner? Show all workings. (4 marks)
