Mortgage Calculator

Steps to obtaining a mortgage offer

For the Expat & International investors, Mortgages can be broadly divided into International and Onshore products.

Onshore mortgages can be restrictive and often involve some sort of declaration of intent to use your property as a main residence at some point in the future.

For investment or “Buy to Let” purposes therefore it is often advisable to stick with an International Mortgage product.

The first thing you should consider is “How much can I borrow?” This will allow you to selectively choose from a range of investment properties in your budget range. It is a good idea to work on a 70% loan to value mortgage i.e. putting down 30% deposit. If you can obtain more that’s fine but be aware that, particularly when interest rates rise, as they most certainly will at some stage, you may end up having to supplement your monthly rental income to cover the mortgage costs.

It can be helpful to obtain an Agreement in Principle “AIP” from a lender before you start looking at potential properties as this will not only tell you how much you can borrow, but you also become effectively a “cash buyer” and are thus in a stronger position to negotiate on price! A good mortgage broker is invaluable in this regard as he knows the market and can put you with the most suitable lender.

Bear in mind if buying Off-plan that lenders will not normally issue a mortgage offer more than six months prior to completion of the property. You can however still obtain an AIP which does not lock you in to taking out a mortgage from that lender but does give you peace of mind that, provided your circumstance haven’t changed dramatically, you will be able to obtain an AIP within six months of completion. Again a good mortgage broker is invaluable here.

Having obtained your AIP and chosen your investment property the next step is to value the property. The lender will normally instruct a valuation for mortgage purposes only and will then lend on the valuation or purchase price whichever is the lower. If purchasing an older property it is advisable to instruct your own more in depth valuation report to avoid any possible nasty surprises later!

You need to appoint a good lawyer to handle the conveyancing process and to make sure your interests are protected. Once you have exchanged contracts on your chosen property remember you are effectively the legal owner so consider if any buildings and/or life insurance is required.

Once valuation and all necessary documentation (basically supporting what you have put down on the mortgage application form) have been received by the lender, a mortgage offer can be issued. It is best to allow at least 6 weeks to completion of the mortgage process so don’t leave everything to the last minute!



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