When you find a suitable property, after signing a temporary sale and purchase agreement, you can apply for a mortgage loan from the bank according to the following procedures:

• Complete the mortgage application form and submit relevant supporting documents (see Question 2).
• After receiving the mortgage application, the bank will first arrange a valuation for the building, and then approve the mortgage loan based on the valuation and the applicant’s ability to repay.
• If the loan application is approved, the bank will:
  – Arrange for lenders to sign letter of loan conditions.
  – Letter to inform lawyer to prepare mortgage deed.
• After the client signs all the deeds, the law firm will notify the bank, and the bank will deliver the loan to the law firm to arrange for the seller to complete the transaction.
• The bank sends a repayment process form to inform customers of the details of the principal, interest and balance paid each month.

Customers are required to submit copies of the following documents to the bank for mortgage application:

Apply as an individual:

• Borrower and Guarantor (if applicable) Hong Kong Identity Card or Passport
• Temporary Sale and Purchase Contract (New Mortgage) / Most Recent Repayment Schedule and Mortgage Payment Records for the Last Three Months
• Bank passbook or monthly statement showing salary records for the last three months
• Most recent tax bill / most recent tax return / employer certification letter

Application in the name of a shell company registered in Hong Kong:

• Hong Kong identity card or passport of the shareholder providing the personal guarantee
• Temporary Sale and Purchase Contract (New Mortgage) / Most Recent Repayment Schedule and Mortgage Payment Records for the Last Three Months
• Valid Business Registration Certificate / Company Registration Certificate
• List of directors / share transfer
• Certificate of share allocation
• Guarantor’s most recent tax bill
• Guarantor’s bank passbook or monthly statement showing salary records for the last three months

There are two general types of uncompleted mortgages.

• The sales agent (developer) has negotiated with the relevant banks about the mortgage terms. Due to the large number of new disks, it will generally be more favorable than the market. In addition, before developers start selling real estate, they will first seek valuations from major banks to avoid undervaluation when the owners attend the meeting. Therefore, prospective owners can directly negotiate specific mortgage terms with the relevant banks.
  
• Prospective owners can also apply for uncompleted mortgages with banks in the market. And the bank will approve according to the general mortgage procedures.

The annual mortgage rate is generally based on the Hong Kong dollar Prime Rate or Hong Kong Interbank Offered Rate (HIBOR).

Example:
The offer offered by the bank is P-2.5%.
At that time, P was 5% (%). That is, the actual interest rate you pay every year is 5-2.5% = 2.5 (%)%.
But note that P is subject to change, plus or minus.

Note:
Interbank interest rates refer to the interest rates offered by banks in Hong Kong to each other in the Hong Kong dollar market. Because the fluctuation and frequency of interbank rates are greater than the best available rates, mortgage plans based on interbank rates should pay attention to economic and market trends.

The first mortgage with a bank is one-mort.
The two-mort refers to the second mortgage made by the owner in addition to the first mortgage.

If the owner wants to make a 95% mortgage, he may need to make a general 70% mortgage first, and the remaining 25% will have a second mortgage.

The general mortgage plan loan amount is 70% of the property valuation.
However, many banks now provide 90% of mortgage plans for customers to choose from.
And according to more than 70% of loans to apply for additional mortgage insurance.

Banks generally consider their own property conditions and the applicant’s ability to repay.

Property conditions include factors such as building age, area, and orientation.
The lender’s repayment conditions include his occupation, salary, assets, past credit card or loan repayment records and other information used by the bank to determine the mortgage interest rate, term and loan amount.

It is recommended buyers choose their own law firm, or a bank-referred law firm can be used. Generally, banks will provide 2 to 3 law firms for customers to choose from.

The law firm that handles the mortgage must be a bank-approved law firm before it can handle the bank’s mortgage procedures on behalf of the relevant bank.