As reported on Telegraph, A Briton had won a £1M (S$2,031,767) lottery in Euromillions, akin to winning a S$2M Toto in Singapore. A dream that everyone wished for in their entire lifetime. Matt Myles is living the dream.
He left his job and went on a bar hopping world tour to countries such as Indonesia and Thailand to Spain, Ibiza and America together with his brother and a few friends.
He splurged on booze and partying costing him up to £72,000, £45,000 on a Porsche and £9,000 on an Omega watch during a seven month stint. Add these up and multiply by 2 and you will get the total amount in Singapore Dollar equivalent – S$252,000 or a quarter of a million dollar spent, without taking into account of hotel and other expenses.
His plan of getting a few houses and earn passive income from rental by leveraging on mortgages came to a naught when mortgage lenders turn him away. Without a job with regular income coupled with poor credit rating amassed from his use of credit during his world tour, he is unable to get financing for his investment in properties.
Without financing options available, he ended up paying for a £150,000 house outright in full.
In Singapore, if you have that amount of credit without a regular income you don’t meet the 60% of Total Debt Servicing Ratio (TDSR) framework. That also mean that you can’t leverage on the low interest rate from your housing loan and end up paying in full, an opportunity cost that you could have generate better returns from other investments.
If you fall in the same category and is in the same boat as Matt’s, you should aim to repair your credit score by paying up your credit before reapplying again. Also consider talking to a mortgage specialist to see if there are other options for you.
And perhaps it’s time for you to get on the payroll?