Can mortgage protection insurance be used for purchasing a haunted property?

Factors affecting valuation and risks of haunted properties

In recent years, Hong Kong's property prices have remained high, prompting some buyers to consider purchasing haunted properties as a cheaper alternative. But can mortgage protection insurance be used for purchasing haunted properties? Let's explore this issue today.

What is mortgage protection insurance?
Mortgage protection insurance is purchased by buyers when obtaining a mortgage to reduce risks. The insurance company takes on some of the risks, such as making repayments if the buyer is unable to do so, to safeguard the interests of both the buyer and the bank.

Can mortgage protection insurance be used for purchasing haunted properties?
Yes, it can. However, the insurance company will reevaluate the property and be more cautious. Therefore, buyers may face lower valuations and approval risks when purchasing haunted properties using mortgage protection insurance. Moreover, if obtaining a mortgage through a large bank, the insurance company typically references the bank's valuation.

Factors affecting the valuation of haunted properties
The valuation and approval of haunted properties depend on four factors: the nature of the crime, the level of public attention, the number of fatalities, and the timing of the incident. Banks consider the severity of the incident when valuing the property, such as a unit where a dismemberment or murder has occurred being valued lower than one where a suicide has occurred.

Furthermore, if the property is considered an "extremely haunted" property, its valuation will affect the valuations of neighboring units, resulting in lower valuations for haunted units on the same floor. Therefore, if buyers only intend to purchase a unit on the same floor, they should consult and apply for mortgages from multiple banks simultaneously to obtain higher valuations. If a bank undervalues the property, buyers may consider using mortgage brokers to obtain fair valuations from banks.

However, it is worth noting that purchasing haunted properties always carries certain risks. Banks may decide whether to approve mortgages based on the situation, and if they cannot assume mortgage risks, buyers face repayment risks. Moreover, if the property's situation is too severe, banks may not even value it. Therefore, buyers should evaluate the risks and their repayment abilities before purchasing haunted properties.

In conclusion, using mortgage protection insurance for purchasing haunted properties is a viable option, but risks and valuation issues need to be taken into account. To obtain higher valuations, buyers should apply for mortgages from multiple banks simultaneously and consider using mortgage brokers to obtain fair valuations. Buyers should evaluate the risks and their repayment abilities before purchasing haunted properties.