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Check out these useful tips for each stage of buying your home.

Borrow mortgagetips

Check out these useful tips for each stage of buying your home.

Mortgage Tips

Find out what to look out for at each stage of buying your home.

What to consider before purchasing your property
  • Work out how much you can afford to spend on the property
  • Check the district and location of the property
  • Check out the property surroundings, including the local transportation network, public amenities, and nearby schools. Also check any development plans that may affect the neighbourhood in the future
  • Compare different developers, property management service providers, and security service providers
  • Investigate the prices and resale values of second-hand properties in the neighbourhood

Collecting property information

Before acquiring your property, remember to collect as much information as you can about it, including:

  • The title of the property and any subsisting encumbrances (including mortgages or charges, building orders and court orders)
  • The current owner’s title to the property
  • Any restrictions on the purpose and use of the property
  • The lease term (including any remaining term, and limitations on renewal)
  • The current state of the property (owner-occupied or leased)
  • The government lease term
  • The owner’s description of the property (e.g. any modifications made to the unit, any forthcoming maintenance works on the building, and owners’ liability for the costs involved)

Before completing the transaction, verify with the owner that all outstanding rates, land rent, property maintenance and management fees have been settled, otherwise as the new owner you may become liable for these. Also, remember to check with the estate agent or owner whether the property has any unauthorised building works, or is subject to a repair order. If yes, check whether the bank will accept the property for mortgage.

Things to note when viewing a property:
You should make the following requests to your estate agent before making any decisions:

  • Sign an estate agency agreement before inspecting the property (the so-called “Viewing Paper”)
  • Ask the estate agent to arrange viewings at different times of the day so you can gain a better understanding of things such as the outlook, local pedestrian traffic, and potential noise issues
  • Avoid engaging different estate agents to view the same property, as this may result in you paying duplicated commission should you decide to buy
  • Obtain a valuation of the property (you can request a verbal valuation from your agent, or use our interactive Breeze Home mobile app or our online valuation programme for an instant valuation)

Six steps for purchasing your property
Step 1: Find out about current mortgage policies
Step 2: Check what you can afford
Step 3: Search for properties
Step 4: Sign Sale and Purchase Agreement
Step 5: Choose the right mortgage
Step 6: Complete the home-buying process
  • Gain an understanding of the current policies that affect the property market
  • Consult a bank and estimate the monthly repayment amount you can afford, and the maximum loan amount you can borrow
1.Choose your preferred property

2.Obtain a valuation of your property through a bank or estate agent

1.Sign the Provisional Sale and Purchase Agreement and pay the initial deposit

2.Engage the services of a solicitor

  • Consult a bank and apply for a mortgage plan that suits your needs
1.Sign the Formal Sale and Purchase Agreement

2.Pay the full deposit and stamp duty through your solicitor

3.Complete all mortgage formalities with the bank once the mortgage application is approved

4.Apply or re-register for utilities such as water, electricity and gas, and telephone and internet connections

5.Conduct a final inspection of the property before completing the transaction

6.On the transaction day:

• The Purchaser and the Vendor sign the title deed and mortgage deed

• When all the documents have been signed, your solicitor will notify the bank to transfer the mortgage loan amount to the Seller through their solicitor

• Take possession of the keys and complete the home buying process by taking over your new property

Documents required for mortgage application

The mortgage application process is very simple. Simply contact one of our Standard Chartered Mortgage Masters, who will arrange everything for you. Please get the following documents ready in advance:

Basic documents

  1. A copy of a Hong Kong Permanent Identity Card or a valid passport
  2. A copy of the Provisional or Formal Agreement for Sale and Purchase
  3. A completed Mortgage Application form that has been signed by all applicants
  4. Proof of personal income (please refer to details below)
Occupation Type
Documents required for a 60% or under mortgage loan application
Regular Salary Earner A bank passbook/monthly statement showing salary records for the last 2 months
Non-regular Salary Earner
  1. A bank passbook/monthly statement showing salary records for the last 6 months
  2. The latest tax return, or pay slips (bearing the name of the employer) for the last 3 months; or Proof of employment showing the job title and monthly salary of the applicant
Self-employed
(state ownership %)
  1. A copy of a valid business registration, and
  2. A bank passbook/monthly statement of the applicant and the company showing deposits and withdrawals for the last four months, and
  3. The latest annual tax return or audited financial report of the company, and
  4. Proof of shares allocation or state on the mortgage application your % of ownership in the company
Rental Income Earner A valid lease agreement with a residual term of 6 or more months
Budgeting for your purchase
Fee and charges
Details
Down Payment
  • Usually at least 40% of the purchase price
    (depending on the property purchased)
Legal Fees
  • Including the legal fees for the Agreement for Sale and Purchase, the Mortgage Deed and other miscellaneous expenses
Stamp Duty,
Buyer’s Stamp Duty,
Special Stamp Duty
Insurance
  • Including household insurance (the cost depends on the value of the property, insurance coverage, premium and term), fire insurance and mortgage loan life assurance. The insured amount may vary depending on individual circumstances.
Agency Commission
  • Purchasers of a secondhand property through a real estate agent will usually need to pay the agent a commission, which is an agreed amount dependent on the purchase price, usually about 1% of the price.
Miscellaneous Fees and Charges
  • Including the cost of removal, account transfer fees for water, electricity and gas supply, deposits, rates and management fees etc.
Smart tips for inspecting a property

Having purchased a property, many owners find themselves plagued by problems such as cracks in marble surfaces, whether bathroom floors should be sloped, and water leaks. Mr. Tsim Chai-Nam, a renowned Hong Kong flat inspector, offers some handy tips on these topics.

  • More than 20 years’ inspection experience. Inspected over 7,000 homes.
  • Inspection expert for the “House-owners New Experience” segment of Hong Kong Cable TV’s Housing Market programme
  • Published around 20 articles in the Hong Kong Economic Times, and a series of reference books on flat inspection

1. What issues should I look out for with marble surfaces?

The greatest difficulty when inspecting natural stone is to distinguish whether a crack is natural or artificial. Here are some tips for checking cracks:

  • The physical properties of polished stone should be such that reflections are shown clearly on the finished glossy surfaces;
  • Natural cracks are consistent with the patterns of the stone, but artificial ones are not;
  • Natural cracks feel smoother than artificial ones.

Unlike artificial stone, natural stone is often inconsistent in colour, and may be handled as follows:

  • Observed from a distance of 1500mm under normal indoor lighting, if there is no significant difference in colour, then it can be considered as acceptable quality.
  • Very small defects in marble, whether naturally occurring or man-made, can be repaired on site.

Our responsibility to preserve Earth’s limited resources should be kept in mind. If every stone with a tiny defect was replaced, we could not meet the demand even if we had hundreds more quarries; not to mention the big increases in carbon emissions and in the consumption of precious water resources that would follow.

2. How can I check if the slope of the kitchen and toilet floors is acceptable?

Disputes often arise between flat owners and developers over the levelling of kitchen and toilet floors. In recent years, many flat owners have favoured level flooring in their kitchens and toilets. Several reasons for this have been put forward. Some say that it resembles hotel-style designs. Some believe that marble is unsuitable for a sloping floor. And some believe that the upkeep of level floors is easier.

Among the multitude of opinions, I find the comments of two overseas professionals most convincing. They note that toilets and kitchens are prone to serious water damage, which can affect the durability of the structure and the decoration. They suggest that a level floor design, using easy to clean materials, is a suitable option for reducing the risk of water damage.

In recent years, there have been fewer cases of toilet and kitchen ceiling leaks in new flats as a result of this style of design.

3. How can I check for hollow plastering (hollow ceilings or walls)?

Hollow plastering should be checked by tapping on the ceiling or wall with a pen or rubber mallet. The acceptable size of a hollow is shown in the following diagram.

Even when individual hollows do not exceed 300mm x 300mm, if the maximum length and width of the hollows equate to 300mm, the hollows should be repaired as a larger 300mm x 300mm hollow.

outlines of a defect area

Hollows that are less than 300mm can be ignored.

Hollows that are less than 300mm can be ignored.
outlines of a defect area

Hollows that are less than 300mm can be ignored.

Hollows that are less than 300mm can be ignored.
outlines of a defect area

Hollows of less than 500mm can be ignored, but hollows larger than 500mm must be repaired.

Hollows of less than 100mm can be ignored.
4. How can I locate hollow areas behind tiles?

Wall or floor tiles should be checked by tapping them with a pen or rubber mallet. The guidelines for hollows behind tiles are as follows:

outlines of a defect area

For tiles less than 300mm X 300mm in size

There should not be more than 3 separate hollows. outlines of a defect area

For tiles less than 300mm X 300mm in size

Any continuous hollow should not exceed 10% of the tile area. If there is more than one continuous hollow area, the total hollow area should be calculated; it should not exceed 10% of the total tile area.
outlines of a defect area

For tiles less than 300mm X 300mm in size

There should not be more than 5 separate hollows. outlines of a defect area

For tiles less than 300mm X 300mm in size

Any continuous hollow should not exceed 10% of the tile area. If there is more than one continuous hollow area, the total hollow area should be calculated; it should not exceed 10% of the total tile area.
5. How do I check for signs of water leakage?

Property owners hate finding signs of water leakage in their flats. Leaks usually occur in or near windows, exterior walls, ceilings, the water supply system, drainage pipes, and areas near air conditioners. Check carefully for the following when taking possession of a property:

  • water stains and crystallisation on structural ceilings in the kitchen and toilet;
  • water stains around windows, or damaged, missing or bubbly glass silicon sealant and waterproof mastic on the outside of windows;
  • water stains or leaks in and around the water supply and drainage systems;
  • water stains on air conditioners, proper insulation of coolant pipes, and gaps between coolant pipes and exterior walls
  • water stains on any exterior walls

Other areas should also be checked carefully for signs of water damage.

6. How can I avoid damage from vibration and shocks during renovation?

Too much vibration can harm the structure of a property. According to British Standard BS8110, which is applicable in Hong Kong, structures should not be subject to excessive vibrations and shocks:

explanation of 3.2.3 Excessive Vibration with notes below
Source: British Standard BS8110/BS8110 Structural Use of Concrete

During renovations, property owners should follow these rules of thumb:

  • Do not use overly large power tools;
  • Do not drill overly deep holes;
  • Do not use chisels or drill rods that are not sharp enough;
  • Do not drill holes that damage the main structures or fireproof structures;
  • Engage a professional surveyor to survey your property if necessary; and
  • Make sure no cracks are evident around drilled holes.

7. How do I prepare a defect repair order?

After carrying out a property inspection, a repair order needs to be prepared. An ideal repair order should include the following:

  • a brief itemized description of defects;
  • the property owner’s views which can easily be understood by contractors;
  • an accurate statement of any problems found;
  • a clear description of the locations of any defects;
  • a list of the type(s) of repair work required; and
  • a site notice consistent with the repair order, to be displayed securely in the flat.
  • the repair order should be drafted without using offensive, abusive or abstract words, and
  • personal opinions should be kept to a minimum, so that contractors have the scope to exercise their professional judgement.

To borrow or not to borrow? Borrow only if you can repay!

Remarks

The above information and tips are for general reference only. There may be differences in individual cases. Standard Chartered Bank (Hong Kong) Limited (“The Bank”) assumes no liability in conjunction with the use of the above information, which is subject to change without further notice.