You are going to, if you haven’t already, come across the term ‘debt service ratio’ (DSR) if you are on the path to getting a home loan from a bank.

It takes time to apply for a loan and it can be quite a tedious task so before you find your dream property, it is best to settle this step first. Your DSR is an important factor for loan officers to decide how much you can qualify for a loan.

So what is debt service ratio and how can you get your loan approved?

What is Debt Service Ratio?

This ratio is calculated by the bank to check whether you can repay a loan. It is usually compared to the bank’s maximum allowable DSR limit. The lower your DSR is, the higher the chances are of getting approved.

You should try to maintain a DSR range of 30% - 40%.

How is DSR calculated?

Total Monthly Commitments / Total Monthly Income X 100% = Debt Service Ratio

You will need these documents to calculate your DSR:

• Monthly commitments



• Monthly income



• Payslip



• Property rental yields



• Personal loan instalment



• Car loan instalment



• Housing loan instalment



• PRS Withdrawals (for retirees)



• Credit card statements

Making sure you have the right documentation and calculating your DSR correctly can be a daunting process.

IQI is offering free DSR consultancy services so that you can have a professional personally work with you to check your quota. They will also even help narrow your search for properties that fit your DSR quota.

Get your free consultant today here - https://bit.ly/2Xh4TKq