Buying old flat - Advice?

Hi,


My husband and I are looking to buy an apartment in Happy Valley and we came across this unit in a around 60-year old, low rise building. The unit is spacious and comes with a terrace. The questions are :


1. Since the building is old (and without a lift), most banks are not willing to give the mortgage. The only small bank who is willing to grant the mortgage, only gives us a 15-yr mortgage so the monthly installment is quite high. How can we get a 20 yrs + mortgage.


2. Since the building is so old already it will probably be hard to find a buyer later on, unless someone is willing to pay cash. Any idea what should be our exit strategy, or would we be pretty much be stuck with this unit? Also I read that government will deem an building unsafe if it gets too old. What will happen in that situation?


3. The reason that we like the unit is because of its high efficiency and the rooftop. However we are concerned about maintenance too. Anything else that we should be mindful about old building ?


Thanks!

I was looking for something similar myself a short while ago ... the problems nowadays are :

1) For an old building no lift, both HSBC & Standard Chartared Bank WILL NOT PROVIDE A MORTGAGE so check it with the bank first.

2) If the building is 60 years old, you'll be lucky if you'll get 10 years of repayments as usually buildings old then 30 years, e.g 35 years gets only 25 years mortgage, 45 years old building, only 15 years ... and 50 years old building only 10 years ... so 60 years old is a problem.

3) If the building is too old and considered dengerous, the goverment can reposses the property by paying you the market price so I heard, double check it with another source ...


Look for a younger building, that's my advice !

Recent legislation empowers the Building Authority (BA) to issue a statutory notice to owners which require them to carry out prescribed inspections and prescribed repairs of their buildings and windows every 10 and 5 years respectively. Also, under the Mandatory Building Inspection Scheme (MBIS), owners of buildings aged 30 years or more (except domestic buildings not exceeding 3 storeys) are required to appoint a Registered Inspector (RI) to carry out the inspections and to supervise any repair works found necessary.


Therefore, the older the building, the higher the chance that substantial maintenance and repair costs will be incurred or ordered by government authorities. These costs will ultimately be borne by the owners.


For older buildings, it is accurate that banks are more reluctant to lend and will often shorten the loan in term together with increasing the cost of financing. You may wish to continue to try and ask some of the smaller banks or private lenders.


You should also be aware that older buildings are more likely to have illegal or unauthorized structures, you may wish to make further enquiries before moving forward. Your exit strategy is restricted to a smaller portion of the market; you may however be rewarded with a higher development potential and pricing.


Weir & Associates

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16th Floor Tak Shing House

20 Des Voeux Road Central

Central

Hong Kong

Tel: 2526-1767

Fax: 2868-3568

Email: weirlaw@weirandassociates.com

www.weirandassociates.com

How cheap is it ?

Since you've mention something about buying a property for you and your family, I'd like to share with you what I read from an article. It says there that in recent years, the rate of homes bought for cash has grown.