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What is the cash rebate, and any problem with borrowing 95%?
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| posted by RastaMan 190 days ago |
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Sorry dudes and dudettes. I know that this might sound like a very stupid question to most of you, but I wonder
1) what is the cash rebate? I called CCB bank today and they said that their cash rebate is 7% (or was it 0.7%?). I believe BOC has the same.
2) it seems that CCB and BOC have the best mortgage rates: 3.85% right now. BEA for example has 4.25 (a HUGE difference!). Does anybody know of a bank that might have lower interest rates? At that low interest rate, what is the point of NOT borrowing 95% of the value of the building? Why should I borrow only 70%??
Thanks a lot. Sorry for the stupid questions!
Cheers.
I want to die peacefully in my sleep, like my Grandfather.
Not screaming and in terror, like his passengers.
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| The Maintenance Man |
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| posted by ServerGuy 190 days ago |
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I would take a punt its 0.7% cash rebate and basically all they do is give you some money back. I thinkn its ment for things like moving in costs etc.
If you borrow more than 70% the bank will have to fund the remaining amount from a third party. For example HSBC get the remainder from the HKMA, where as Standard Chartered get it from third party companies. You also normally can only borrow more than 70% if your going to use the property as your main residence, you cannot let the place.
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| posted by hongkonger 190 days ago |
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I have one mortgage with BOC, the small (0.7% sounds about right) cash rebate is credited to your mortgage account approximately one month after the completion.
Not recommended - worth a mention. Another option for 95% mortgage is buying direct from a developer, they provide a package deal for 70% mortgage, and 25% top up loan, of course all rates charged and admin fees are fixed.
We will consume 85 million barrels of oil today, what's going to be left for tomorrow?
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| posted by RastaMan 190 days ago (edited 190 days ago) |
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Thanks. I do plan to live in the property. This is the first property I would own, and I only want to buy because 1) I am tired of moving, 2) the mortgage seems to be comparable to the rent in HK, so no point in paying the rent, 3) house prices seem to be going up, and so is the rent.
The problem with buying from a developer is that here (in Ma On Shan, Tai Wai) there are no developers I know of who are selling where I want to buy (near KCR stations).
Why is 95% mortgage not recommended? If I only pay 3.85% interest rate, it would be better to borrow 95% rather than 70% and invest the rest of my savings, won't it?
I want to die peacefully in my sleep, like my Grandfather.
Not screaming and in terror, like his passengers.
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| The Maintenance Man |
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| posted by ServerGuy 190 days ago |
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Go check out Standard Chartered, they have some good deals at the moment including the "One" account (I think thats what its called) which is one of these accounts where they offset the interest of your mortgage aganist any money you may have in the account.
I have never heard of anyone saying 95% is not good, it can just be a little harder to get as it involves a few more bits to get authorised.
If you have got any problems with this site send them to Support@HKExpats.com Thanks
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| posted by RastaMan 190 days ago (edited 190 days ago) |
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Thanks a lot. I just called Standard Chartered, and they have 4 to 4.1% interest rate, as opposed to the Chinese banks that have 3.85%. Though the different might be eliminated through this 'one account'? I wonder if the 'one account' isn't a promotion that will last 3 months and then the benefits will disappear?
Does anybody know the history of interest rates of different banks? Maybe the Chinese happen to be lower right now, but they have been higher until last month??
I want to die peacefully in my sleep, like my Grandfather.
Not screaming and in terror, like his passengers.
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| Regular Member |
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| posted by geraldo 190 days ago |
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I would walk into a bank, not over the phone.
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| posted by spannermonkey 190 days ago |
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With a mortgage over 70% or High Advance as its somethimes called you tend to pay insurance premiums as the bank is taking more of a risk on the property. These premiums are quite steep and you may not get them back if you sell within a certain time period. As Geraldo says, get yourself into a bank and sit-down with somebody. Thats how everyone giving you advice on here got their information.
http://www.marisamiller.com
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| posted by RastaMan 190 days ago |
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G'day mate.
Yes, I did go to the bank (BOC) a couple of days ago, but I thought that asking about the interest rate can be done on the phone as well.
Insurance at the BOC seems to be 28,000 (1 time premium) or 14,000 the first year, to which 4,800 has to be added during every additional year until I reach 70% of the mortgage. At least that was my understanding. Is that all there is? Or did I miss something?
I want to die peacefully in my sleep, like my Grandfather.
Not screaming and in terror, like his passengers.
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| The Maintenance Man |
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| 3018 Posts |
| On the Sofa |
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| posted by ServerGuy 190 days ago |
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That BOC insurance is the same as I have with Standard Chartered and from memory it sounds about the same amounts also.
I just payed the one off fee.
If you have got any problems with this site send them to Support@HKExpats.com Thanks
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| Regular Member |
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| posted by smog 190 days ago |
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FWIW HSBC is ghiving me 3.75% for the fist two years currently, then IIRC 3.87% thereafter. Plus 1% back on my credit card means an effective rate of 2.75% currently, which is ridiculously cheap. Borrow as much money as you can and invest any leftovers - making 2 or 3 % above the mortgage rate is trivial, and at the moment many stock markets are returning 20%+ per year...
___________________________
http://smogsblog.wordpress.com for more of the same
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| The Maintenance Man |
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| posted by ServerGuy 189 days ago |
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Yep, I know a number of people who have just taken out loans from the banks and invested the money, they have made some very good returns.
If you have got any problems with this site send them to Support@HKExpats.com Thanks
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| posted by Load Toad 189 days ago |
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Yes - I remember much the same comments in Singapore just prior to the crash '...borrow lah - buy stock - can not lose...'
You used to speak the truth.
But now you're clever.
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| The Maintenance Man |
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| 3018 Posts |
| On the Sofa |
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| posted by ServerGuy 189 days ago |
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I don't think its a case of cannot lose, its just that if your willing to take the chance, you can make some good money.
If you have got any problems with this site send them to Support@HKExpats.com Thanks
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| posted by Killer Tomato 189 days ago |
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making good money on a chance basis with borrowed money?
hmm sounds to me like the ultimate recipe for disaster, unless off course you can afford it and are well covered with assets
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