How to smoothly apply for and complete a property refinancing?

A detailed explanation of the refinancing procedures and process

Are you considering refinancing your property? If so, it is essential to thoroughly understand the relevant procedures and processes to avoid unnecessary difficulties and problems. Here is a detailed introduction to the refinancing procedures and process, which we hope will be helpful to you.

When considering refinancing, it is important to shop around and carefully choose the mortgage plan that best suits you. Different banks offer various preferential rates and cashback promotions, so you need to compare and evaluate thoroughly. In addition, the refinancing process takes about 1 to 3 months, and you need to be prepared to wait patiently.

 

The specific process of refinancing

Step 1: Submitting the refinancing application

When you decide to refinance, you can submit your application when the penalty period is about to end. The documents you need to prepare include:

• Proof of address
• Proof of income
• Original mortgage repayment records
• Mortgage notice of the original mortgage
• Employment certificate from the company
• Latest three months' payslips
• Monthly statements of the payroll account for the latest three months
• Tax returns

If any documents are missing, the refinancing application will be significantly delayed, so applicants should try to avoid this situation.

If you own a self-occupied residence (such as Green Form Subsidised Home Ownership Scheme), you need to refer to the bank list of the Housing Authority and select the bank for refinancing. After contacting the new bank, you need to pay an administrative fee (currently HKD 1,950), submit a refinancing application form to the Mortgage Corporation Limited, and sign the refinancing agreement. Then, you can submit the agreement to the new bank for signing the new mortgage contract and submit the refinancing agreement to the original bank to release the old mortgage.

 

Step 2: Hiring a lawyer and retrieving the property deed

When you apply for a mortgage with the new bank, you need to hire a lawyer to handle the refinancing procedures for you. The lawyer will retrieve the property deed from the original bank, which usually takes about 21 days. When the lawyer retrieves the property deed, you can sign the loan agreement with the new bank. After receiving the loan instructions from the new bank, the lawyer will be responsible for handling all relevant documents. In addition, the lawyer needs to inquire with the original bank about when and how much you need to repay. When the new bank disburses the funds to the lawyer, the lawyer will confirm with the original bank that the repayment has been received. This is important for the Lands Department to record the refinancing. Finally, the lawyer will submit the property deed to the new bank.

Hiring a lawyer is one of the most significant costs in the refinancing process. Generally, the lawyer's fee is about HKD 5,000. If the refinancing case is more complicated, the lawyer may charge additional fees. Although the lawyer's fee is not low, hiring a lawyer can ensure that your refinancing process is correct and avoid any problems. This is crucial for property refinancing.

 

Step 3: Signing the refinancing documents and completing the refinancing process

In this step, homeowners only need to sign the new mortgage terms to complete the refinancing process. However, they should still take note of the following:

Firstly, since different banks will check the credit records of applicants with TU Credit Information Center when applying for mortgages, applying for mortgages from multiple banks at the same time will affect their credit records. Secondly, depending on the age of the property, banks may need to conduct an inspection to ensure that there are no issues with the property. If an inspection is required, homeowners should contact the bank as soon as possible to avoid delaying the refinancing process.

Finally, after all the procedures have been completed, the bank will transfer the mortgage loan and cash to the lawyer's office, who will then transfer it to the homeowner. The refinancing process is completed at this stage.

 

Although the refinancing process may be complicated, following the procedures will ensure a smooth process. Homeowners should read the relevant documents carefully before refinancing and consult with professionals if there are any issues.