Tax season loan/s for mortgage down payment?

hk.main · 14-02-2023, 06:35 PM

Can you use a tax loan for a mortgage down payment in HK?

Does anyone have experience with this?

shri · 14-02-2023, 06:42 PM

Talk to a mortgage broker - no clue how the tax loan impacts the stress tests that the banks do as the tax loan will show on your credit report and will have an impact on your fixed outgoings / ability to repay.

calmathetic9 · 14-02-2023, 06:48 PM

Pls delete

bdw · 14-02-2023, 09:37 PM

When you apply for a mortgage in HK, lets say for example you put down 30% and want to borrow 70%, then the bank will usually ask what was the source of that 30% and you may need some evidence to show where it came from. If you say it came from a tax loan, I would guess that would not really be acceptable. They want to see its your money and not borrowed from somewhere else.

If you dont have enough for a down payment, then consider borrowing a larger mortgage, for example 90%. But then be aware you have to pay the extra MIP (mortgage insurance program).

aw451 · 14-02-2023, 10:01 PM

Dollars are fungible.

Tax loan is just extra leverage. Can you pay it off?

hk.main · 15-02-2023, 11:03 AM

Thanks for the responses. Will read up on the mortgage insurance program now as well.

I was thinking of using the tax loan as part of a deposit, or for other costs such as renovation, redecoration, furnishing etc. I believe we can manage both the tax loan and mortgage repayments.

shri · 15-02-2023, 11:07 AM

Originally Posted by hk.main:

Thanks for the responses. Will read up on the mortgage insurance program now as well.

I was thinking of using the tax loan as part of a deposit, or for other costs such as renovation, redecoration, furnishing etc. I believe we can manage both the tax loan and mortgage repayments.

Start talking to a mortgage broker as soon as possible. MReferral and CentaMortgage are two that come to mind. They should be able to suggest a path forward.

It is better to get an idea of what the banks can offer you with a view of your current financial situation and see if you can get some sort of approval in principle with your primary bank - do not go with the "I believe" mantra. It is more important for the bank to believe.

hk.main · 15-02-2023, 11:22 AM

Originally Posted by shri:

Start talking to a mortgage broker as soon as possible. MReferral and CentaMortgage are two that come to mind. They should be able to suggest a path forward.

It is better to get an idea of what the banks can offer you with a view of your current financial situation and see if you can get some sort of approval in principle with your primary bank - do not go with the "I believe" mantra. It is more important for the bank to believe.

Ok, will do, and thanks again.