If you’re considering investing in an overseas property in Asia, then Hong Kong may be on your property radar. Although Bloomberg reports that the Hong Kong property market is in “freefall,” Hong Kong remains a considerable force.
Deciding what property to buy, which location to zero in on, or what property type to choose are all crucial when making a property investment in Hong Kong. Far more crucial, however, is figuring out how to finance your purchase. For the exceptionally rich, it’s easy to pay in cash. For the rest, however, it usually requires taking out a mortgage.
If you’ve found a condominium you want to invest in but worried about funds, there’s no need to worry as international banks typically have a range of mortgages specifically for foreigners or expatriates. Mortgages are usually granted based on the borrower’s ability to repay. According to Just Landed, “some banks will give a mortgage of around 90% of the property value, others only up to 70%.” It is highly unlikely to encounter a 100% loan-to-value or interest-only mortgages, reports ExpatBriefing.com
One important thing to consider making a Hong Kong property investment–or any other country for that matter–is the currency risk. You have to keep in mind that if you are earning a different currency and paying your mortgage in another currency, the exchange rate movements may affect your payment. This means there’s a possibility of paying more for your mortgage solely because of the exchange rate. Then again, the latter could also work to your favour.
When you’re ready to apply for a mortgage, you will need the following documents.
- Copy of passport or Hong Kong ID Card
- Copy of the sale and purchase agreement
- Bank statements and tax returns
No matter what type of loan you choose when investing in real estate, there is always a risk involved. As such, it is always best to seek professional and legal advice before you pursue your property investment. To find out which mortgage providers are approved, visit www.hkmc.com.hk.
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