Oh…so the Mortgage Service Ratio (MSR) curb did not materialize today.
Will it be next week? Your guess is as good as mine.
How will it affect a potential buyer if it actually materialize…
Assume a buyer is earning $10K a month.
Assume current interest rate at 1.5%.
Assume current MSR is 40%.
Assume downpayment of 20% and loan of 80%.
At $4K month for installment, the loan amount is around $1.15mil which will translates to a property price of around $1.43mil.
If MSR drop to 30% and all variables being the same.
At $3K a month for installment, the loan amount is around $860K which will translates to a property price of around $1.07mil.
Hmm, from being able to afford a 3 bedder in a more central location to a 2 bedder in a more outlying location…
Ouch.
And let’s not go into the scenario of interest increasing…
And my buyers still say: Let’s wait for the price to drop before I commit to a purchase.
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