Bigger discounts for cash payment option

Staged payments are generally provided in new properties, but mortgage payment installments can also start immediately. The advantage of opting for immediate mortgage installment payment is the buyer can enjoy a higher discount from the developer, but the former needs to start repaying the mortgage loan even before the property is ready for occupation.

If the buyer’s mortgage for an existing flat is not yet fully paid, or if he/she is currently renting a flat, the buyer’s expenses on housing will be doubled. If this is the situation, the buyer’s cash flow may be pressured and even adversely affected.

Staged payment schemes can defer start of payment of a mortgage loan 

Buyers can choose “staged payment plans” offered by developers, and this allows the former to arrange a mortgage loan until construction of the project is completed. In general, flats in most projects are offered for sale two years before completion of their construction, which means buyers have a longer time to arrange home financing.

In the event of declines in home prices, banks will also revise downward their valuation of new flats. Buyers need to prepare adequate funds for the down payment and mortgage installment payments.

Read the sales brochure carefully

Since buyers are unable to view actual flats offered during pre-sales, it is vitally important for them to scrutinise the sales brochures. It is not simply not enough to look merely at basic information, such as the saleable area, floor plan, height of the ceiling of the flat and which party is responsible for slope maintenance.

Details, such as public facilities and public open spaces in brochures, are also set out and buyers should pay very close attention to them before entering the market.

Personal Visit to a Project Site 

More often than not, different types of facilities near and around a new project, such as construction sites, schools, landfills, and garbage dumps, are not set out in the sales brochures. Buyers who wish to know the development plans and existing facilities near a new housing estate are best advised to gather for free relevant pieces of information from the Lands Department or the Planning Department, and even conduct a visit and inspection of the project site. Alternatively, a real estate agent can be asked to arrange a visit to existing buildings in nearby areas for the purpose of getting reference and gaining full understanding of the immediate environment of a new project and available support facilities in the area.