The first-time home buyer's guide to a smooth property purchasing
How to buy your first home
Buying your first home is a big life milestone, but it can be overwhelming for first time home buyers. A better understanding of the following end-to-end steps to buying a home and the mortgage process can surely help you through the journey.
The home-buying process begins with evaluating your financial condition and the property you want to buy.
- Stress Test: Passing a stress test is the first step in applying for a mortgage loan for your first home. The Hang Seng Affordable Loan Amount Calculator gives you first time home buyers a reference for your maximum affordable mortgage loan amount, and also an initial idea about whether you can pass a stress test based on your monthly household income
- Property valuation: The mortgage loan amount is deduced from the property transaction price or valuation (whichever is lower), and thus first time home buyers are advised to conduct a valuation before purchase. Hang Seng e-Valuation offers instant property valuation for your initial reference. Bank valuation is normally based on attributes such as property condition and transaction history. Some properties with substandard conditions may cause down valuation. The formal confirmed valuation will be provided upon mortgage application, with reference to the actual transaction price
- Budget reserve: Make sure you have prepared a sufficient budget to cover expenses on top of your down payment, including but not limited to stamp duty, solicitor fees, property agent commission fees, renovation expenses, etc.
Steps to buying a home and the mortgage application process
Once the preliminary evaluations are completed and you've settled on a price for the home, it is time to prepare the financial agreements and apply for a mortgage.
- Provisional Agreement for Sale and Purchase and initial deposit: Upon confirming the deal, you will need to sign the Provisional Agreement for Sale and Purchase and pay the initial deposit, usually 3% - 5% of the property price
- Appoint a solicitor: The solicitor helps you prepare the Sale and Purchase Agreement and Assignment Deed, as well as conduct a land search. Note that your solicitor should be approved by the Bank if you would need to apply for mortgage. Feel free to check out Hang Seng's list of approved list of solicitors with our mortgage consultant or through our mortgage enquiry hotline
- Mortgage application: First-time home buyers may usually look for a mortgage plan with a higher loan ratio, such as the Mortgage Insurance Programme which lets you achieve home-ownership with a lower down payment. The Hang Seng mortgage application process is simple. Just fill in the application and leave us your contact details, and our mortgage consultant will provide a mortgage solution within 24 hours (excluding non-business hours). You can also apply via the Hang Seng Mortgage Centre or any of our Branches with the required supporting document
- Fire insurance: Fire insurance protection is required when applying for a mortgage loan. Some mortgage loan plans may offer a discount on the fire insurance application. Remember to check out the latest mortgage loan offers or ask for details
- Sale and Purchase Agreement and deposit payment: Your appointed solicitor will arrange for the signing of the Sale and Purchase Agreement as well as payment of the deposit (normally equals 10% of the property price together with the initial deposit) and government stamp duty. Visit Inland Revenue Department to understand the stamp duty calculation
- Mortgage approval: Mortgage processing time varies from case to case, depending on the completeness of the submitted application and documents. Upon loan approval, the bank will issue a confirmation letter for your acceptance of the mortgage terms. The solicitor will then arrange for the signing of the Assignment Deed and Mortgage Deed before the deal completion date and subsequently arrange the loan disbursement with the bank
Complete the home buying process and move into your new home
When all the paperwork is done, you can take possession of the home and verify its condition.
- Receiving the property key: The receipt of your house key marks the completion of the home buying process. You are ready to move into your new home
- Property inspection: Inspect the house with the property inspector according to the property inspection checklist. Arrange for renovation if needed
- Flat intake arrangement: As a new home owner, it will be thrilling to move into your new home. Remember to apply for utility services, such as water, electricity and gas. You may also consider applying for home insurance to protect your property from damages
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Mortgage services
- A designated mortgage consultant will follow up from enquires handling to completion of the mortgage application
- An online appointment for free mortgage consultation and initial assessment service
Terms and conditions apply.
Home Care Plus Home Insurance
- Protects against damage to household contents caused by acts of God or other covered accidents
- Covers loss of rent, temporary accommodation and worldwide personal liability
Terms and Conditions apply. The above general insurance plan is underwritten by QBE General Insurance (Hong Kong) Limited.
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- To borrow or not to borrow? Borrow only if you can repay!
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Information provided in this webpage is for reference only. It should not be considered as professional or legal advice. While Hang Seng Bank Limited endeavours to ensure the accuracy and completeness of the information in this webpage, no warranty or representation is given by Hang Seng Bank Limited as to its accuracy and/or completeness. Hang Seng Bank Limited does not assume any liability, in contract or tort, by statute or under common law, for any loss and damages, direct or consequential, to the readers in connection with or howsoever arising from any inaccuracy or incompleteness of the information.