I do feel sorry for him, however he had stretch the financing ratio to 90% (70% bank borrowing + 20% mortgage corp insurance) which is right on the maximum level even during normal time, even if he can pass for the repayment ability / interest rate stress test, he fails on the financing leverage ratio as he has no buffer in there. It is a sad case, I do hope that he can get some reduction from seller as well as borrowed the short fall from family and relatives. Good luck.
He said he could pass the interest rate hike stress test, so let's give him benefit of doubt. You are quite correct to point that with little spare cushions in savings, it would be difficult for him to survive the next economic slump. God bless him! He is going to need it!
90% mortgage with low level of savings is indeed really like walking on hell fire! Unless one has a well off family to fall back on during time of difficulties, there is no safety margin left at all whatsoever!
You made it sound like a rap song..... maybe we can all rap along....
Oh com'on.We don't only love bricks,
but we also love babes and gorgeous chicks,
stepping on the throttle burning rubber like how they were made,
with the hot gadgets and that is how we track our dates
flashes and cameras to make sure we got the names right with the babes,
while we pump the hifi and smoking cigars and talk about the crazy chicks,
we love watches and we love $$$$$ but we only follow the mind of our dicks......
