Buy to let mortgages in HK?

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  1. #1

    Buy to let mortgages in HK?

    Does any one know if these kinds of mortgages exist in HK?

    More specifically, a lender/mortgage product that will take into account the potential rental income of the property (not just the borrower's personal income) when assessing his/her suitability?


  2. #2

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    HSBC appears to include rental income when assessing their "investor mortgages":
    Property Investor Loan: Investment Property Loans for Property Investor – HSBC HK


  3. #3

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    The primary difference is the LTV which a bank is willing to lend you. Currently a bank will lend you 50% LTV for commercial investment (that is 50% of the bank's valuation, not 50% of the sale price). So if the sale price is 3million, the valuation 2.5 million, the max the bank will lend you is 1.25million.


  4. #4

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    Quote Originally Posted by walkup:
    The primary difference is the LTV which a bank is willing to lend you. Currently a bank will lend you 50% LTV for commercial investment (that is 50% of the bank's valuation, not 50% of the sale price). So if the sale price is 3million, the valuation 2.5 million, the max the bank will lend you is 1.25million.
    You are making generalisations walk up. Lending terms are negotiable.

  5. #5

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    Quote Originally Posted by randy1:
    You are making generalisations walk up. Lending terms are negotiable.
    Randy, that LTV cap is not negotiable. the HKMA set the loan-to-value CAP for all properties that are not occupied by owners at 50% back in 2010.

    walkup might demand an apology from you.

    FYI,

    http://www.hkma.gov.hk/media/eng/doc...20101119e1.pdf

  6. #6

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    There are a few little tricks. Eg get an additional portion as a "personal loan", reval of property upon purchase, cash back on drawdown etc, especially with smaller banks if you can build a personal relationship.

    At the other end, big banks like HSBC the loan officers are more like trained robots and have very little discretion.


  7. #7

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    Quote Originally Posted by randy1:
    There are a few little tricks. Eg get an additional portion as a "personal loan", reval of property upon purchase, cash back on drawdown etc, especially with smaller banks if you can build a personal relationship.

    At the other end, big banks like HSBC the loan officers are more like trained robots and have very little discretion.
    Those tricks might enhance funding, but they're not "the actual mortgage." They're also unlikely to compensate the 20% (70% LTV vs. 50% LTV if under $7M).

    What some borrowers do these days is have the seller ask the tenant to move out (if the lease is up), then "claim" the property is intended for self-use so they get to borrow 70% instead of 50%, but as soon as they close and secure the better 70% LTV, they suddenly change their minds and rent out the property instead. LOL The rental market is full of bullshit units like this.

    But I agree 100% that bank officers are trained robots.

  8. #8

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    Quote Originally Posted by zymu:
    Those tricks might enhance funding, but they're not "the actual mortgage." They're also unlikely to compensate the 20% (70% LTV vs. 50% LTV if under $7M).

    What some borrowers do these days is have the seller ask the tenant to move out (if the lease is up), then "claim" the property is intended for self-use so they get to borrow 70% instead of 50%, but as soon as they close and secure the better 70% LTV, they suddenly change their minds and rent out the property instead. LOL The rental market is full of bullshit units like this.

    But I agree 100% that bank officers are trained robots.
    Ha ha. I once used a tactic quite similar to the one you mentioned when I was first getting started

  9. #9

    To add additional point, if your major income is dervied from overseas, the LTV will be 10% lower. At such, you will only be able to obtain a 40% mortgage.