When you have chosen your preferred property, you can apply for mortgage loan from a bank after you have signed the Provisional Sales and Purchase Agreement. The application procedure is listed as follow:
(1) You require to fill up the mortgage application form and provide relevant certifying documents (Please refer to question 2).
(2) Banks will process property valuation after receiving the mortgage application, and base on valuation and applicants¡¦ repayment ability to approve the mortgage loans.
(3) The processing time usually takes a few days or even a few months in variety. If your mortgage loan has received approval, the bank will arrange a letter of Mortgage Loan Offer to applicants for signature and inform lawyers to prepare Mortgage Assignment.
(4) Lawyer will inform the bank after client have signed up all the assignments. The mortgage loan will be given to the lawyer afterwards, and the lawyer will do the loan arrangement for the seller in order to finish the deal.
(5) Repayment procedure form will send out from the bank, informing client about the monthly contribution capital, rate and remaining balance etc.
You will normally need to provide the following documents when you submit your mortgage application.
For applications under individual name(s):
For applications under the name of a shell company:
Based on the first-hand property mortgage loan, there are usually two categories:
The mortgage annual interest rate calculation normally is based on HKD Prime Rate or Hong Kong Interbank Offered Rate (HIBOR). For example:
The interest rate provided by the bank is P ¡V 2.5 interest rate (%).
When P is 5% interest rate, it means the actual interest rate equal to 5 ¡V 2.5 interest rate (%) = 2.5%. To be aware of, P is variable that can increase or decrease.
Hong Kong Interbank Offered Rate (HIBOR) means the interest rate benchmark gauging the cost of borrowing in the Hong Kong interbank market. Since the fluctuation and frequency of Hong Kong Interbank Offered Rate (HIBOR) are larger than Prime rate, using Hong Kong Interbank Offered Rate (HKIBOR) in the mortgage scheme require to be aware of the tendency of the economy and current market.
The mortgage you do at the first time is defined as first-mortgage.
Second-mortgage means the owner process another mortgage after the first-mortgage.
If the owner hope to do the mortgage with 85%, he may require to do the mortgage with 60% first and the remaining will start in the second-mortgage.
Client normally can borrow 60% of the property under the home mortgage scheme.
Owner have to apply for mortgage insurance if they would like to apply a mortgage with 60% or above.
Banks normally will put the property condition and applicants¡¦ repayment ability in their consideration.
Property condition is including property age, district and coordinates. The applicants¡¦ repayment condition is including applicants¡¦ occupation, salary, asset, past credit card payments and loans records. These conditions are utilized to define mortgage interest rate, loan tenor and loan amount.
We advise the buyer choose the chamber by himself or seek the chamber through the banks. Banks normally will provide two to three chambers for client selection.
Intermediate chamber must need to receive certification from the banks before representing the bank to handle the mortgage procedure.