The impact of property market fluctuations on mortgage loans
Property prices have fallen sharply in the past year, causing a sharp increase in the number of negative equity cases. A negative equity mortgage refers to a situation where the mortgage customer owes more than the market value of the mortgaged property. For example, a borrower owes the bank 5 million yuan, but the collateral is only worth 4 million yuan. This situation is called "negative equity."
The impact of negative equity
- Negative equity may result in the bank requiring early repayment (call loan) or repossession of collateral.
- Borrowers may be facing financial stress and need to resolve negative equity issues as quickly as possible.
How to deal with a negative equity situation
Faced with negative equity, borrowers may consider negotiating with the bank to reassess the value of the collateral or reschedule the repayment plan. Dealing with negative equity issues promptly can help reduce financial stress.
Traditional Chinese and Hong Kong mortgages
As a professional SEO focused blogger, I deeply understand Chinese traditions and Hong Kong mortgages. Here's what I re-wrote:
Chinese traditional mortgage
- Traditional Chinese mortgage refers to a form of mortgage loan, usually used to purchase a house or other real estate.
- Mortgage loan interest rates and terms are usually provided by a bank or financial institution.
- Traditional mortgages in China usually require borrowers to provide collateral to ensure the security of the loan.
Hong Kong mortgage
- Hong Kong mortgage refers to the mortgage loan used when purchasing a house in Hong Kong.
- Hong Kong's mortgage market is highly competitive, and borrowers can choose the most suitable loan product based on their needs.
- Hong Kong mortgage loan interest rates and conditions depend on the borrower's credit history and financial situation.
The above is some basic information about traditional Chinese and Hong Kong mortgages. Hopefully this information will help you better understand these two mortgage forms.
Bank’s review standards for call loans
In fact, banks do not have certain guidelines for call loans. First of all, when the external economic environment deteriorates, the lending risks faced by banks will increase significantly. If property prices plummet and a large amount of negative equity occurs, banks will then review the severity of the "insolvency" of the relevant negative equity properties. . For example, whether the "mortgage debt to property valuation ratio" is close to 130%, if it is close to 130%, the bank will start to pay attention to the financial status of the borrower of the property. If it believes that there is a relatively large risk, it may require the borrower to repay early.
The situation in which the bank exercises the right to call loan
However, even if there is no negative equity, it does not mean that the bank will not exercise the right to call the loan. Assuming that the borrower's economic conditions change (such as unemployment), resulting in a cessation of payment, non-payment of management fees or rates, etc., the bank will pursue the debt. In addition, there are some special circumstances, such as the borrower's bank account making multiple large withdrawals and deposits in a short period of time. The bank may suspect that someone is laundering money. At that time, the account will be frozen and all loans will be recovered.
In addition, if the condition of the mortgaged property changes, such as violating the contract use, turning the owner-occupied unit into a rental or commercial use, or changing the rental unit into a sublet or subdivided room, etc., the borrower may be required to repay the loan early. In addition, the borrower uses the property as collateral to borrow a second mortgage from the finance company. Once the bank finds out, the bank will require the customer to repay the second mortgage. If the borrower fails to repay the second mortgage within the time limit, the bank will require the customer to repay the second mortgage. Return it with a click.
Before entering the market, you should act within your capabilities
As for the entire process, the bank will first issue a lawyer's letter. If the owner still fails to make the payment after several legal procedures, the bank will take back the property. After repossession, the bank will auction the property, and the proceeds from the sale will be used to repay the owner's previous loans and legal fees. This is the "silver master offer." Generally speaking, it takes 4 to 12 months from the time the borrower starts to cut off payments until the mortgaged property becomes a banker and is sold on the market. The key lies in whether the borrower is willing to take the initiative to return the property to the mortgage bank for processing. In order to save the court’s procedures and time for property repossession, during this period, the negative equity situation in the mortgage market has not improved, or even continued to worsen, and it is possible to become a “silver master”.
The Importance of Building Mortgages
The author believes that the whole process takes almost a year. If the borrower is unable to make payments due to unemployment, he actually has enough time to find a new job. If the borrower has stopped making payments due to other financial problems, he may wish to seek help from professionals. Solve problems. Readers have seen that most properties with negative equity in 1997 have successfully turned around in recent years, so as long as they can survive, there will often be "a bright future".
The long-term nature of building mortgages
Finally, in fact, a property mortgage is a long-term loan. Unless the property price only rises but does not fall during the repayment period; otherwise, as long as the property price fluctuates normally, there is a chance of negative equity. Therefore, the author recommends that you do your best before entering the market, pay a larger down payment as much as possible, borrow a mortgage with a lower percentage from the bank, and make monthly payments on time. Even if you are unfortunate enough to become a negative asset, there is no need to worry too much. .
Traditional Chinese and Hong Kong mortgages
In traditional Chinese culture, a house has always been regarded as an important property of the family. In Hong Kong, mortgage is one of the common ways to buy a house. Here is some important information about traditional Chinese and Hong Kong mortgages:
Chinese tradition
- The house is regarded as a symbol of family in traditional Chinese culture.
- The owner of a home is often considered the primary provider for the family.
- Houses have traditionally been an important part of a family's wealth.
Hong Kong mortgage
- In Hong Kong, mortgage is one of the main ways to buy a house.
- Mortgages usually require interest payments.
- Mortgage loans often have longer repayment terms.