Sean received many emails from buyers in their early 30s who cannot keep up with instalments. Some had qualified for loans through so-called loan restructurers: employers issuing payslips for higher salaries, owners withdrawing their own money and paying it back in as fake rent, or turning card debt into instalment plans to lower their monthly commitments.
Is it worth using these tricks to get a housing loan approved?
“there's a difference between investment and taking a risk like gambling”
No. A rejection means your income cannot carry the commitment for 30 to 35 years. Everyone in the sale earns their cut once you sign, but if the rent doesn't cover the loan, you alone carry the shortfall, and selling may still leave you owing the bank.
Why
The bank's rule exists for a reason
Roughly a third of net income is treated as affordable for a housing loan, because you still need to live, eat and drive. On RM6,000 net, that is about RM2,000 a month, enough for a property of around RM400,000.
Everyone else is paid at signing
Agents, developers and loan arrangers earn when the SPA is signed. If you later can't pay, none of them is obliged to help; nobody forced you to sign.
Selling may not clear the loan
Discounts and rebates mean the SPA price, and your loan, can be well above what the unit fetches after handover. If you must sell below what you owe, you have to find the difference in cash.
Holidays on instalments add up
Car loans, student loans and card debt converted to monthly plans all reduce what you can borrow, and should be cleared honestly rather than hidden.
What to do
- Treat a loan rejection as a sign to cut debts or raise income, not to find a workaround.
- Never submit inflated payslips or manufactured rental deposits.
- Check that rent will cover the instalment before you buy to invest.
- Work out what you would still owe if you had to sell at today's market price.
- Ask yourself whether you need the property now, or only want to be seen owning one.
Editorial Note: Summarised from Sean Tan's full episode. The quoted answer is in his own words; the rest is our paraphrase. Figures reflect the recording date, so check current rates and rules before acting on them.
DON'T CHEAT FOR A BANK LOAN YOU CANNOT AFFORD TO PAY BACK
Sources & Verification Data
Summarised from Sean's full English captions for this April 2020 video. The quoted line is verbatim; everything else is paraphrased. Some figures in his worked example were unclear in the captions and are left out.
