- Property Valuation
Bank will usually arrange the property valuation during the mortgage application, the maximum loan amount will be set by reference to the lower of the appraised value or transaction price of the property. Bank valuation for property is usually free of charge except commercial property, customer may have to pay for the valuation report.
- Loan Tenor
The loan tenor for mortgage is usually 30 years the longest. Customers should choose the suitable loan tenor according to the affordability on first installment and future debt-to-income ratio (DTI).
- Early Prepayment Penalty
Terms and conditions about early prepayment are usually stipulated in the loan agreement. Bank will usually charge the mortgagor a penalty fee on condition that the mortgaged property is fully or partially redeemed in an early period (normally set as the first one to three years)
- The sum of age of borrower and loan tenor
During the mortgage loan approval process, bank will specify that the sum of age of borrower and loan tenor should not exceed 65 to 80 years (Different bank has policies), while loan tenor should not exceed 30 years. Borrower should seek for more information on these issues during mortgage application as it may affect the approval result.
- The sum of property age and loan tenor
During the mortgage loan approval process, bank will also specify that the sum of property age and loan tenor should not exceed 60 to 80years (Different bank has policies), while loan tenor should not exceed 30 years. Borrower should seek for more information on these issues during mortgage application as it may affect the approval result.
- Debt-servicing-ratio (DSR)
Further to the letter of 27 February 2015 on “Prudential Measures for Property Mortgage Loans”, for properties with a maximum permissible loan-to-value ratio (LTV) of 60%, the normal debt-servicing-ratio (DSR) cap is 50% and a stressed-DSR cap is 60%. In another example, where the mortgage applicants should have been subject to a DSR cap of 40% and a stressed DSR cap of 50% (e.g. non-self-use properties), the caps should be further knocked down to 35% and 45% respectively if Additional Financing results in total mortgage finance amounting to 20 percentage points over the normal permissible LTV.