The SRPA issued a new Practice Note yesterday on financial plans provided by vendors or their appointed finance companies, advising developers to provide prospective buyers with an information paper setting out the financial plan and a reminder to prospective buyers with effect from 17 July next year to enhance transparency and protection for buyers.
The SRPA notes that from time to time, vendors of first-hand residential properties may offer different financial schemes (such as mortgages, charges or loans) on their own or through their appointed finance companies. The Practice Note advises that if a prospective purchaser indicates to the vendor at the sales office that he/she wishes to apply for one or more of the financial schemes listed in the price list to be offered by the vendor or his/her appointed finance company, the vendor should provide the prospective purchaser with an information document setting out the financial schemes and a Reminder to Prospective Purchasers before the parties sign the Provisional Agreement for Sale and Purchase.
The seller should also remind prospective purchasers to check with the seller or his appointed finance company for details of the terms and conditions, approval criteria and application procedures of the financial plan if they have any queries.
The SRPA also advises prospective buyers to read carefully the financial plan information (including terms and conditions, etc.) set out in the relevant price list and other relevant documents, and not to rely on verbal undertakings, which should be confirmed in writing.
Before signing any documents, it is important to read them carefully and seek legal advice if necessary.
He said there is still time to implement the arrangements and there is plenty of time to prepare. He also said that SHKP has always set out the mortgage terms and conditions in its property price list, so he believes the impact will not be significant.
Centaline Mortgage's Managing Director, Ms. Wong Mei Fung, said that nowadays, the price list of new properties will list the mortgage loan information provided by the developer or the designated finance company, if any, but occasionally buyers still have misunderstanding about the mortgage plan, for example, in the past, especially since 2015, the "breathing plan" is popular, since then some buyers in the market misunderstand that the mortgage of the developer's new properties is equivalent to the "breathing plan", some buyers mistakenly think that they will be able to get a mortgage. Some buyers mistakenly thought that they would be granted a mortgage by the developer's designated finance company, but nowadays, most developers' first or second mortgages have specified that the buyer must have sufficient repayment ability and must provide proof of income, or that the final approval of the designated finance company is subject to the approval of the mortgage, rather than a "mortgage package".
The latest guidelines and practices can provide buyers with additional information and reminders on financial plans, further enhancing sales transparency and loan information, and allowing buyers to This will further enhance the transparency of the sale and the information of the loan, so that buyers can be more aware of the considerations of the developer's mortgage plan, thus reducing misunderstandings and protecting buyers' interests.
