Credit Card's Effect On Serviceability (1)

July 12, 2015
Yuhann Liu

We all know having credit cards affects our ability to borrow but I quite often get questions on what is the extent of that effect.

The cards on offer these days - especially the gold / platinum and any sort of rewards cards - provides customers with various perks such as bonus frequent flyer points, various insurances (which I perosnally have benefited from and possibly don't want to live without) and typically commands a higher minimum limit. Since you don't get charged interest on most cards so long as you wipe the balance religiously some people tend to go for a higher limit or readily accept invitation to increase the limits. 

However, when it comes to mortgages, not only the number of times you've hit the credit file may have an affect on your ability to borrow, the total limit on the cards play a big part in determining how much you can borrow. In short the ratio is roughly $1 limit for every $4 in borrowing capacity and obviously differs between lenders as don't all manage risks the same way. Here's a brief example:

A particular bank would lend ~$367000 to a customer who's earning a gross income of $60000 who does not have any credit cards.

To the same person with a $2000 credit card limit the serviceability drops to $356000. It drops further to $322400 if the credit card limit is raised to $8000.

Given issuers are promoting gold and platinum cards, people tend to take them up with a reasonably high limit of $8000 or $10000 each without considering they may be buying a house 1 or 2 years down the track.

So what do you do when credit cards appear to be the only thing between you and that new home? Just check with your broker whether dropping the cards or the limit on the cards will help. If it does, then offer that as a condition to the lender. Don't forget the lenders will most certainly want to see proof that you've fulfiled these conditions before they go unconditional or attend settlement. 

Happy tax time & property hunting. 

 

在這裡跟大家分享一下信用卡額度對房貸償還能力的影響.

市面上有不少信用卡給予客戶諸多好處, 像是里程點數, 保險及其他優惠. 這些卡大多數是金卡以上等級且有較高的最低額度.

很多卡民預防未來有需要會選擇高一些的額度, 或者是接受發卡行增加額度的邀請. 反正額度在那邊不用又不用繳利息.

但信用卡的額度會影響房貸的借貸能力. 每家銀行風險控管都不太相同但比例上大致上是一比四, 也就是說每一塊錢的信用卡額度會減少四塊錢的借貸空間. 在這裡舉個例子給大家參考一下:

某家銀行願意借給一位年薪$60000但沒有信用卡的客人$367000房貸. 
信用卡總額度$2000的話借貸能力就降到$356000, 
信用卡總額度$8000的話借貸能力更是降到$322400

現在金卡還是白金卡氾濫的時代很多人擁有數張信用卡, 每張$8000還是$10000以上, 等要申請房貸的時候才發現受到影響貸不到所需要的額度.

這時其實可以跟承辦人員查詢是否將信用卡額度降低會有幫助. 如果會的話可以將額度降低或是把信用卡取消掉即可. 銀行通常也會在Unconditional Approval或者是Settlement前要求出示把卡處理掉的證明.

報稅的季節又到了, 祝大家退稅&買房快樂

Posted in: Tips

Contact us today.


Additional Comments? * :