mortgage rates

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Does anyone know how to get a mortgage on a property that you haven't even built.? Are there any special rates out there for first time builders on property.?

Thanks in advance
Jason

Who's doing the building?

Hi Jason;

A crucial distinction needs to be made here: are you talking about a property that is being developed by a big development company such as Sung Hung Kai or Swire, or are you talking about building your very own house?

If it's the former case, it's absolutely no problem at all getting a mortgage in HK. If it's the latter, I really don't know -- most people who can afford their own tract of land here don't need to worry much about mortgages!

Mr Tall

Re:mortgage rates

Well the land is inherited as the usual laws of fathers passing down to sons. But I have family and martgages abroad hence feeling like everyone else Hong Kong is far superior to europe in my opinion.!
This is a problem as finance is spread across in uk, but will have enough for at least 50% for a small house. But still 50% short so I could go down loan route but interest rates are lower in Hk than here at the moment.?
I'm not loaded so hence the mortgage question.?
Jason

Re:mortgage rates

I asked a BBC friend who's been through that, and he suggests two options:

[quote]1) Obtain a normal financial loan from any financial institution and use either another property or 'to be built property' as collateral. Usual evaluation of a building in HK is done via average price of similar properties in the area. In addition, Banks in HK are loaded with cash right now - so there should not be a problem with getting remaining 50% loan.

and the more HK or preferred way is:

2) sell a stake in the 'to be property' for a value (usually 100% of construction cost = 1floor x 700ft flat). This means you get the remaining 2floor x 700ft flat for the price of the piece of land! [/quote]

Hope that helps,

MrB

Re:mortgage rates

Mrb,
Thanks for the advice the loan or mortgage is the route for me as I continuely hear the heritage sell off. The problem people have is the cost of building a house that most people cannot afford, but the catch 22 is that if you do not build after the alloted time the government will take the land away.! Also 33% sacrafice for the rest while a loan would mean bearing the cost until you could sell the top floor and only lose about 20%.
But still does anyone know what typical rates for loans or mortgage are at the moment.?

Re:mortgage rates

Mortage rates in Hong Kong are quoted at "Prime-X%". Prime is currently around 5%, and the best offer I have seen is Prime - 3.2%, http://www.batgung.com/phpBB2/viewtopic.php?t=150

MrB

Re:mortgage rates

The Batpoh also has a few comments to add:

Are you assuming he's going to go for an apartment on each floor setup? If this is going to be the 'family home' in HK then he's better off with the regular mortgage route.

IF [big if] he's from UK and wary about declaring income, assets etc then he won't want the bank option.
Does he only have the one piece of land? You need to find a very good reliable builder though. With the right kind of deal and option to build offer, it is possible to build the family home and the second bunch of apartments for very little outlay.
This second option is the rural landowners preferred option as it follows some sort of medieval/face/dodgy handshake/wealthy village landowner rite of passage. But is it legal?

On that note, why ask me, I'm female?

The last comment is because village land only goes to sons.

MrB