News Hong Kong Property & Finance

buying a second property

ORIGINAL POST
Posted by don don 12 yrs ago
We have just payed off our mortgage on our property in Tin Hau and are thinking of renting it out. so we are looking at buying a second flat. I wonder given that the property is valued at around HK$6.5 million how can we leverage this property to buy a second one? Does it mean that won't have to come up with the usual minimum deposit loan on another HK$4 to 5 million dollar property. Or will they give us a higher mortage or how exactly does it work. thanks.

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COMMENTS
Loyd Grossman is Miss Venezuela 12 yrs ago
The easiest thing to do is to save 30pc for your next flat without remortgaging. If you remortgage a flat which is rented out, any rent received will be assessed at 50pc of the monthly amount. You will also pay a higher mortgage rate and you won't be able to borrow much anyway. From memory, you can only take out 50pc equity for a rental flat. Also, baluations are very low when compated to asking prices for new flats. All you debt payments (including loans and credit cards) will be taken into consideration and your total debt payments can't be more than 50pc of income (I think - after a rise of two percentage points in the mortgage rate). Please check this with bank as I can't remember. However, the beat way is to find 30pc without remortgaging.

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OffThePeak 12 yrs ago
You might consider selling the first before you buy the second, since that will leave you less exposed to an expensive property market.


I think many smart people are downsizing now, and that is one reason that properties about $10 million are stagnating while, those below $5 million continue to rise in price.

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donguan 12 yrs ago
Thanks for you reply actually, we hope to rent out the one and live in the new flat. Looking for an income stream.

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OffThePeak 12 yrs ago
Sorry.

It was a veiled attempt at humor.

Of course you were.

I suggest you pay close attention to what yiled you can get, and also the interest rate exposure on any new property

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