Beware Public Housing Residents! Hidden Risks Lurk After Cashing Out

The Consequences of Cashing Out Your Public Housing: Don't Take it Lightly!

In recent years, with the soaring property prices in Hong Kong, many residents have chosen to cash out their public housing to alleviate their financial burdens. However, cashing out your public housing may have adverse effects on your mortgage, increasing your repayment burden. This article, from the perspective of a school teacher, will explain the potential impacts of cashing out your public housing.

Firstly, after cashing out your public housing, you will lose the government's guarantee. Under the original terms, the government provided a guarantee for your public housing purchase, making it easier for you to obtain bank loans and enjoy lower mortgage interest rates. However, if you cash out, your public housing will no longer have the government's guarantee, and the bank will raise your mortgage interest rates accordingly. Typically, the adjusted interest rate will reach at least 4 cents, significantly increasing your repayment burden.

Secondly, after cashing out your public housing, you will face higher repayment pressure. The bank will reassess your loan terms based on your repayment ability, such as increasing monthly payments or shortening the repayment period. If your repayment ability is insufficient, your repayment burden will become heavier, and you may even face problems such as insufficient repayment and debt collection.

Lastly, after cashing out your public housing, you will have to bear higher risks. Cashing out your public housing is a type of pledging loan, where you pledge your property to the bank in exchange for a loan. If you cannot repay the loan on time, the bank has the right to auction your property to repay the debt. This risk is a significant challenge for those with unstable income or job situations.

In summary, after cashing out your public housing, you will have to bear higher mortgage interest rates, repayment pressure, and risks. Therefore, before considering cashing out your public housing, you should carefully consider your financial and risk-bearing capacity. If you need funds to alleviate your financial pressures, you can consider other loan options, such as personal loans or credit card loans. Although the interest rates for these loans are higher, the corresponding risks are lower.

Finally, we would like to remind everyone that cashing out your public housing is not the best solution to financial problems, as it involves multiple factors such as finance and risks. If you are facing financial difficulties, you can seek professional financial advice to choose the best solution.

In life, we often encounter various financial problems. Finding effective solutions to these problems is a challenge that everyone must face. We hope that this article can help you better understand the risks and impacts of cashing out your public housing and choose the most suitable solution for yourself.