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Old 22-02-2015, 09:41 AM
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Not sure if an economic crisis happens, we are all brave enough to buy. You and wife may both lose your jobs. The last thing on your mind is to buy a new car or a new home. You will not even have banks willing to give you any loan. Your priority would be to have enough funds to buy food. Be careful what you wish for.

My advice to those who are over leveraged (defined as an LTV (loan to value) ratio of more than 30%, in my opinion) to delever. Sell away any excess investment properties you have and pay down the mortgage of your own home, the place you are living in. So, even if property prices crash by 60%, you are still above water. So if your home is worth $1m now, even if price drop by 60% to $400k, you still have a home equity of $100k since your mortgage is $300k. You are still ok provided you and wife still have jobs to service your mortgage. Best is to be debt free now. Clear your home loan now so that you don't worry about a place to stay if you both lose your jobs. Also you need to have lots of cash to buy food if you both lose your jobs.
30% LTV??? U are v kiasi...
Even our gov stopped at 50% LTV for second housing loan, and in the old days it was 80%LTV no matter how many properties an individual buys.
In general, banks will allow us to keep the property as long as we can still service the monthly loan, it does not matter to the bank by how much the property value crashes as long as the individual can still service the loan.
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