Smart Tips on Mortgage Application


The EAA held a public seminar titled “Smart Tips on Mortgage Application” on 25 March 2017 and attracted a large audience of 460. It has been the fourth large-scale public seminar since we organised the first one in 2015. I am glad to know that the response from the public has been getting better and better. The audience has become more interested in our topics and more eager to ask questions.

At the abovementioned public seminar we were honoured to have distinguished speakers including Dr Andy KWAN, renowned columnist and Director of ACE Centre for Business and Economic Research; Mr Derek CHUNG, Assistant General Manager and Head of Retail Banking of Wing Lung Bank; and Sr Keith SIU, an experienced surveyor and the Board-appointed member of the EAA Licensing Committee. They delivered a lot of useful information about the property market and mortgage applications to the audience, together with our Senior Manager of Complaints Section, Mr CHAN U-keng, who shared a few non-compliant cases of estate agents on the subject.

I was invited to deliver the opening speech at the seminar. I reminded the audience to carefully consider their own financial position and repayment ability before committing to purchase a property. As a matter of fact, purchasing a property is a big investment requiring a large amount of money. Most buyers will therefore apply for a mortgage loan to finance their purchase from a bank. However, there are multiple factors affecting the mortgage application/approval. For instance, the Hong Kong Monetary Authority revises its guidelines on mortgage loans from time to time in light of market conditions. Lending institutions may also consider a number of factors such as the applicant’s income sources and his/her financial condition, when vetting a mortgage loan application. There are also stress-tests and stressed-DSR (Debt-Servicing Ratio) caps for mortgage loans provided by banks, and regardless of passing these tests, the availability of such mortgage loans is still subject to individual banks’ approval.

During the day our speakers explained from different angles the factors that affect mortgage approvals and property valuations. Moreover, complaint cases concerning estate agents in providing mortgage application related information were illustrated.

The EAA has issued a Practice Circular stipulating that estate agents must not make any assurances to prospective buyers on the mortgage terms when they are handling first-hand residential property transactions. In fact, no matter when dealing with whatever kind of properties, estate agents are not allowed to make any misrepresentation on mortgage information to their clients and they must not assure the purchaser that he/she would definitely be able to obtain a certain amount of mortgage loan.

Before the end of the seminar during the “Questions and Answers” session the audience showed a great interest in the topic and asked numerous questions. The video highlights of the seminar will soon be available on this website and I strongly advise every property purchaser to watch it so as to learn more and equip themselves with better knowledge of the subject.

Ruby Hon
Chief Executive Officer
Estate Agents Authority