Concrete Analysis | Hong Kong property agent finds the hard way why it is important to stay on top of mortgage loan rules
- Property agents should never hastily assure clients on the terms of a loan but instead advise them to consult directly with banks or other professionals
- Customers should protect their interests by thoroughly reviewing their own financial situation and repayment ability to avoid forfeiting deposits
Getting a sufficient amount of mortgage loan is one of the many crucial factors that affects the decision of an individual, for both residential and non-residential properties.
When handling property transactions, property agents are required to provide accurate information on mortgage loans to clients. Many potential purchasers, particularly those who are not from Hong Kong, are not familiar with the guidelines and regulations of the government or the HKMA on mortgage loans. Therefore, estate agents should never hastily assure their clients of the terms of a loan but instead advise them to consult directly with banks, finance companies or other professionals for the most up to date mortgage information.
I would like to take this opportunity to share a non-compliant case of an agent making a misrepresentation on mortgage information regarding a non-residential property.
An agent arranged for a prospective buyer to inspect an industrial property. The client, who is not a Hong Kong resident, asked the broker if she could get a mortgage loan from a bank in Hong Kong.
The estate agent said she could obtain a mortgage loan of 80 per cent of the property price. Before entering into the provisional agreement for sale and purchase, the agent even reconfirmed with the client regarding the interest rate, the 20 per cent down payment and the loan amount she could get.
